No Blockbuster Products That Make People Say "This One, Please"... Korea's National Drink Struggles as Heavy Drinkers Vanish [Non-liquor Era] ①

Outlook for the Liquor Market in 2026
Domestic Soju Market Contracted Last Year
Less Dining Out and a Moderate Drinking Trend
Soju Exports Take a Breather After Surpassing 100 Million Dollars
Profitability Management Becomes a Key Task in 2026

#HiteJinro, the largest liquor company in Korea, saw its annual sales last year fall by more than 100 billion won (3.9%) from a year earlier. The liquor division of Lotte Chilsung Beverage posted an 8.6% decline in annual sales, as domestic sales fell across all types of alcoholic beverages. In particular, the fact that both HiteJinro and Lotte Chilsung, which together account for an overwhelming share of the domestic soju market, recorded negative growth is a sign that the Korean liquor market has entered a "quagmire of stagnation." As company dinners and social gatherings that disappeared during the COVID-19 pandemic have taken root as a "new normal," the "sober life" trend of drinking less, led by Millennials & Gen Z, has spread. Sober life is a newly coined term that combines "sober" and "life," referring to a lifestyle of minimizing alcohol intake and enjoying only small amounts of drinks with an alcohol strength appropriate for oneself. On top of this, the prolonged period of high inflation has squeezed household budgets and sharply reduced dining-out, and this has coincided with a declining population. As a result, the liquor market has had to abandon its growth formula, and profitability management has become the core management task.

According to the Financial Supervisory Service's electronic disclosure system on the 10th, HiteJinro's domestic soju sales last year stood at 974.5 billion won on a cumulative basis through the third quarter, up 0.4% from 971 billion won in the same period a year earlier. On the surface, this is a slight increase, but considering the effects of inflation and price adjustments, it is effectively close to flat. The fact that the performance of HiteJinro, which holds an absolute share of the domestic soju market, has stalled clearly shows that domestic soju sales are no longer at a stage where further growth is possible.

Domestic soju market where growth has stopped

The performance of Lotte Chilsung Beverage makes this trend even clearer. Lotte Chilsung's domestic soju sales in 2025 were 351.1 billion won, a 2.69% contraction from 360.8 billion won a year earlier. The company strengthened its brand competitiveness with the zero-sugar soju "Saero," but it was unable to overcome the overall decline in market demand.

Given that both the No. 1 and No. 2 players in the industry showed stagnant results, the recent slump in the domestic soju market can be seen as being driven not by individual corporate strategies but by structural changes in the market. Spending on dining-out and nightlife has recovered less than the industry had hoped, and the reduction in company dinners and the decline in second- and third-round drinking are solidifying not as temporary cyclical factors but as a fundamental shift in consumption behavior. At the same time, the spread of preferences for low-alcohol and non-alcoholic drinks is overlapping with this, shifting the consumption structure in a direction where not only the "frequency of drinking" but the "amount consumed" itself is decreasing.

Soju is relatively resilient compared with other types of alcoholic beverages because it is affordable and has a high share of at-home consumption. In fact, this contrasts with the steeper declines seen in some other categories such as beer and wine over the same period. However, this resilience only serves to cushion the downside and does not function as a driver to expand the size of the domestic market again.

Changes in the nature of the market are also evident in product strategies. After zero-sugar soju became the default, companies shifted their strategies from creating new demand to slowing the departure of existing consumers. Although they have continued to expand flavors, adjust alcohol strength, and renew packaging, these moves have been closer to competition in widening brand choices than to expanding the overall market size. In fact, no new hit products emerged in the domestic soju market last year, and the strong performance of specific brands did not translate into growth for the market as a whole.

Soju exports see first decline...Entering an adjustment phase

Soju exports also entered an adjustment phase last year. According to export-import trade statistics from the Korea Customs Service, soju exports last year amounted to 96.52 million dollars (about 139 billion won), down 7.3% from 104.09 million dollars in 2024. The record of more than 100 million dollars in exports, which had continued for two consecutive years since 2023, was broken after two years, turning into a decline. Over the same period, export volume also fell 7.3%, from 70,054 tons to 64,975 tons.

However, it is difficult to conclude from this alone that the "K-soju boom" has come to an end. It is more natural to see it as a signal that, after spreading rapidly over the past three to four years, soju exports have entered a stage in which the growth slope in major markets is bound to flatten. In fact, the growth rate of soju export value slowed from 13.2% in 2022 to 8.7% in 2023 and 2.6% in 2024, before turning negative last year.

The most direct background to last year's decline in soju export volume is the maturation of core markets. In the early stages of overseas expansion, simply entering new countries or channels can quickly increase volume. However, as consumers become more familiar with soju, it becomes difficult to increase volume solely by expanding distribution networks, and the market has entered a stage where soju must compete within existing markets.

HiteJinro's export-only Gwaileiseul series. [Photo by HiteJinro]

In addition, intensifying category competition is acting as an important factor in slowing export growth. As in Korea, competition in overseas liquor markets is rapidly expanding around base spirits such as RTD (ready-to-drink), highball, vodka, and gin. In this process, soju's position as a "light, low-alcohol distilled spirit" is inevitably shaken to some extent. Even if demand for soju itself does not decline sharply, if the trendy liquor consumption that had accounted for a significant part of its growth is dispersed into other categories, the increase in exports will structurally be limited.

Era of management...Management strategy standards are changing

This year, the soju market is likely to be a year in which structural stability is examined first, both in domestic sales and exports, rather than the possibility of a rebound. As long as the structural contraction of spending on company dinners and nightlife continues, along with the spread of preferences for low-alcohol and non-alcoholic drinks, it will be difficult for the domestic market to deviate significantly from last year's pattern. The key variable determining performance will likely be not whether consumption volume increases again, but how stably the current level can be maintained.

The focus of competition is also expected to shift. Rather than generating results through volume expansion or market share battles as in the past, it is becoming more important to realign price positioning and the roles of distribution channels. In channels for at-home consumption such as convenience stores and hypermarkets, promotional competition will be unavoidable, but at the same time, there is a strong possibility that companies will intensify efforts to segment their channel strategies in ways that minimize damage to profitability.

The direction of exports is even clearer. Instead of expanding scale by pioneering new markets, the emerging issue is "how to get consumers to drink soju" in markets where it has already entered. The key will be how widely it is used in nightlife channels, whether it can become established as a cocktail base, and whether it can build a brand story that leads local consumers to recognize it as a "Korean-style distilled spirit." The center of gravity is shifting from short-term competition over volume fluctuations to competition over securing context and positioning.

In particular, premium and distilled soju products are highly likely to become a test bed for gauging the quality of soju exports this year. If they can establish themselves as a "Korean-style spirit" even in some markets, they will be able to defend both unit prices and demand. Conversely, if competition in RTD products and highballs intensifies further, it cannot be ruled out that soju will be consumed merely as one of many low-alcohol distilled spirits, further weakening its growth momentum.

An industry insider said, "For soju, we are now at a stage where performance is determined less by how much you sell and more by how you manage the existing market structure," adding, "In 2026, rather than competition premised on expansion, the sophistication of strategies in both domestic sales and exports will be what makes the difference in results."