Craft Beer in Crisis... Seeking a Way Out with 'Highball'

Craft Beer Growth Slows Amid Trend Changes
Diversifying Profits with High-Margin 'Highball'

With the transition of COVID-19 to an endemic (periodic outbreak of infectious diseases), demand in the home market is decreasing, and craft beer companies, which have fallen into growth stagnation due to an indiscriminate flood of collaborative products, are seeking new opportunities through highballs.

According to the liquor industry on the 9th, craft beer company Kabrew recently launched a highball brand called ‘Easy Highball’ in the ready-to-drink (RTD) format, releasing ‘Easy Blue Hawaii Highball’ as its first product. Kabrew plans to introduce 2 to 3 more types of highballs within the year, including the second lineup ‘Easy Pina Colada Highball’ at the end of this month.

Amazing Brewing Company also completed trademark applications last month with the Korean Intellectual Property Office for ‘Amazing Andong Highball’ and ‘Amazing Myeongju Highball’ and is preparing for their release. Sevenbrau is also weighing the launch of ‘Korea Highball’ and ‘K-Highball’.

The reason craft beer companies are launching highballs instead of beer is that the recent growth of craft beer has slowed down. During the pandemic, craft beer rapidly grew by promoting various collaborative products mainly through convenience stores, but the flood of indiscriminate collaborations has accumulated consumer fatigue. Jeju Beer, which succeeded in becoming the first craft beer company to be listed on KOSDAQ in 2021, reported sales of 19.2 billion KRW in the third quarter of last year, down 8.7% from 21 billion KRW in the same period the previous year. Operating losses during the same period remained at a similar level of 7 billion KRW compared to 7.1 billion KRW a year earlier, failing to improve profitability.

A Kabrew official explained, "It is true that practical considerations reflecting the recent trend in the home market toward highballs played a role, but internally we have been continuously conducting research and development (R&D) on radlers and cocktails," adding, "We decided to expand in order to provide a variety of alcoholic beverage experiences."

However, since the launch of highballs is ultimately an expansion of supplementary product lines, there are also opinions that various attempts are needed to regain previous vitality in order to strengthen competitiveness in the core business. A representative from the Korea Craft Beer Association said, "Craft beer attracted consumer responses because there were many elements that could arouse interest, such as fresh products and catchy marketing," and added, "To overcome the recent difficult situation, multifaceted efforts such as developing new beers through collaboration between breweries are necessary."