First Half Sales of 78.5 Billion KRW in the US and Other Countries... 20% Increase YoY
Overseas Sales Growth Led by Soju and Fruit Liqueurs
Entered 17 Costco Stores in the US... Plans to Expand Store Presence
Jinro Exports to Japan Fully Improved for the First Time in 43 Years
[Asia Economy Reporter Koo Eun-mo] HiteJinro is accelerating the globalization of soju day by day. Recently, HiteJinro has placed soju products such as fruit liqueurs in Costco stores in the United States, and in the Japanese market, it has completely improved the quality of Jinro soju, intensifying its efforts to target overseas markets through expanding distribution channels and improving product quality.
According to the Financial Supervisory Service's electronic disclosure system on the 18th, HiteJinro's sales in other countries (including the United States, China, Russia, etc.) in the first half of this year amounted to 78.5 billion KRW, showing a 20.3% growth compared to the same period last year. HiteJinro's sales in other countries in the first half of the year were only about 28.1 billion KRW in 2018, but jumped to 45.8 billion KRW in 2020, then 65.3 billion KRW last year, and 78.5 billion KRW this year, increasing by nearly 180% over four years. HiteJinro classifies overseas performance into Japan and other countries for aggregation.
The growth in HiteJinro's overseas sales is driven by soju and other alcoholic beverages such as fruit liqueurs. Soju export volume, which was 13.9 billion KRW in 2018, steadily increased to 14.5 billion KRW in 2019, 15.2 billion KRW in 2020, and 16.4 billion KRW in 2021. This year, as of the first half, soju exports to the U.S. market increased by 107.4% compared to the same period last year, reaching 20.5 billion KRW and sailing smoothly.
The growth of the fruit liqueur series represented by "Aseul" such as Grapefruit Aseul, Green Grape Aseul, and Plum Aseul is even more vigorous. The export volume of other alcoholic beverages was only about 4.3 billion KRW in 2018 but nearly doubled to 8.3 billion KRW the following year, then grew sharply to 12.6 billion KRW in 2020, 36.8 billion KRW in 2021, and 30.1 billion KRW this year, increasing by more than 600% in four years.
A HiteJinro official explained, "We believe that fruit liqueurs are gaining high demand mainly among young people, thanks to various fruit flavors and the recent trend of low-alcohol beverages."
Soju is also increasing its recognition as a traditional original liquor representing Korea, and increased accessibility through active placement in large supermarkets and country-specific customized marketing has led to sales expansion. In Vietnam, where the young population is large, HiteJinro's soju ranked first in the spirits market last year, helped by the influence of Korean popular culture. HiteJinro's exports to Vietnam have shown an average annual growth rate of 10% from 2017 to last year.
As the growth of soju continues, HiteJinro is accelerating its overseas market penetration by expanding its distribution network to Costco in the U.S. Starting with the Costco New York store in May this year, HiteJinro has placed four types of fruit liqueurs in 17 stores this month in Minnesota, Wisconsin, Illinois, Kentucky, and others. It is expected that approval for placement in five stores in San Diego, California will be granted within the year, and plans to expand to stores in Texas and other locations in the future.
Japan Jinro products fully renewed for the first time in 43 years.
HiteJinro is also putting renewed effort into targeting the Japanese market, which was its main export country. Sales in Japan reached 63.9 billion KRW in the first half of 2018 but sharply declined to 38.9 billion KRW the following year. Sales recovered to the 40 billion KRW range on a half-year basis with 45.3 billion KRW in 2020, but slightly stagnated at 49.0 billion KRW in 2020 and 47.6 billion KRW this year. However, soju sales by the Japanese subsidiary in the first half of this year increased by about 37% compared to the first half of 2019, before COVID-19.
Based on this, HiteJinro plans to strengthen localization strategies to expand sales. Last month, for the first time since starting exports to Japan in 1979, Jinro's soju quality was completely improved. The company explained that the amount of activated bamboo charcoal used in the filtration process was increased by 1.5 times to enhance a clean taste. In addition to quality improvement, HiteJinro plans to produce some products locally and expand advertising.
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