Lotte Chilsung, who recently hit big with 'Saero', also sees a leap in its wine business

Last Year's Wine Business Sales Near 100 Billion KRW... 20% Increase YoY
Attention on Whether Chairman Shin Dong-bin's Return as Inside Director Will Boost Momentum

Last year, Lotte Chilsung Beverage, which led the zero-sugar soju craze by launching ‘Cheoeumcheoreom Saero,’ is strengthening its position as a comprehensive liquor company by generating nearly 100 billion KRW in sales from its wine business as well.

Lotte Chilsung Beverage 'Obinomio' Cheongdam Branch.

According to the Financial Supervisory Service's electronic disclosure system (DART) on the 24th, Lotte Chilsung Beverage's wine business sales last year amounted to 99.628 billion KRW. This represents a 19.8% increase compared to 2021 and is close to the beer business sales of 101.491 billion KRW.

Wine sales, which were around 58.595 billion KRW in 2019, increased to 61.894 billion KRW the following year, and in 2021 rose by 34.4% year-on-year to 83.141 billion KRW, growing more than 70% over three years until last year. As the wine business showed strong performance alongside Cheoeumcheoreom Saero, which sparked the zero-sugar soju craze, Lotte Chilsung’s liquor division sales also recorded an all-time high of 774.5 billion KRW, a 15.2% increase from the previous year.

Lotte Chilsung is continuing its growth by improving the overall process in the wine sector, strengthening sourcing capabilities, securing and nurturing key core brands, and diversifying sales channels. The increase in wine business sales last year was significantly influenced by the growth of the domestic wine market and the introduction of new brands such as ‘1887,’ produced under an original equipment manufacturer (OEM) agreement with Chilean winery ‘Vi?a Maola,’ and ‘Bread and Butter’ from California, USA. Additionally, growth in the entertainment market and road shop channels contributed to the division’s expansion.

As the wine business played a key role in reversing the mood of the liquor division, Lotte Chilsung plans to continue its growth this year by strengthening the introduction of new brands. In particular, it plans to expand imports of white wine and sparkling wine, which have recently shown high growth rates. A Lotte Chilsung official explained, “We are continuously exploring wine trends in each region to strengthen sourcing capabilities,” adding, “Through communication with local partners, we are searching for famous wines not yet imported to Korea.”

Sales channels are also expected to expand further. It is reported that Lotte Chilsung is negotiating to enter various platforms such as Kakao to expand ‘Smart Pick,’ a service that allows customers to pick up online orders at Lotte offline stores. Additionally, the directly operated wine retail store ‘Obinomio,’ launched in March last year, will continue to expand. However, given the increasing uncertainty due to the recent economic downturn, the expansion will focus on areas densely populated by people in their 20s and 30s that match the brand concept.

Moreover, the return of Shin Dong-bin, Chairman of Lotte Group, as an inside director after three years is expected to further empower Lotte Chilsung’s new liquor businesses, including wine and whiskey. Industry insiders anticipate that Chairman Shin will actively engage in investments and mergers & acquisitions (M&A) related to new businesses by personally overseeing management. However, since the domestic wine market has grown very rapidly over the past two to three years, and considering the recent economic downturn along with external factors such as price increases in major wine-producing countries like France and the United States and exchange rates, there are also expectations that consumption may decline, leading to a possible adjustment in growth pace.

Lotte, the pioneer of the domestic wine business, has accumulated know-how by producing ‘Majuang,’ the longest-running domestic wine launched in 1977, and is strengthening its competitiveness in the wine business centered on Lotte Chilsung and Lotte Shopping. Lotte Mart established a dedicated wine team called ‘Project W’ in 2021 and opened the wine specialty store ‘Bottle Bunker,’ while Lotte Chilsung is reviewing acquisitions of multiple overseas wineries.