Ups and downs in the beer business

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Ups and downs in the beer business

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Lee Seung-hoon, a 33-year-old office worker, finds joy these days when he visits a large discount store near his home in Mokdong, western Seoul, after work. He heads for the aisle shelving domestic and imported beer.

“When I was a university student, there weren’t this many types of beer,” Lee said. “Most of them were Korean brands, but now there are dozens of imported brands to choose from.”

With the popularity of beer growing in Korea, foreign brands are offering a greater variety of choices at lower prices, while domestic brands are expanding to higher-cost premium beers.

According to Lotte Mart yesterday, 60.9 percent of imported beer sold in 2010 cost at least 2,000 won ($1.95) for a 335-milliliter (11-ounce) can.

By 2012, that figure was 42.8 percent and this year through Friday it was 20.7 percent.

Instead, the percentage of imported beer priced 1,000 won or more per can increased from 13.1 percent in 2010 to 14.1 percent in 2012. And this year, that figure stands at 35 percent.

Lotte Mart’s study also showed high-priced beer accounted for an increasing share of sales. In 2010, 26 percent of imported beer sales were cans priced 3,000 won and higher, while in 2012, 43.1 percent of them were in that price range. This year, the figure is 44.3 percent.

“Based on sales, our study shows that many consumers who previously drank mainly local beer have switched to imported beer,” said Lee Young-eun, a merchandiser of alcohol beverages at Lotte Mart. “Consumers who have been drinkers of imported beer are buying more expensive beer as they seek new tastes.”

Meanwhile, the price of cans of local beer over the same period surged. Of total domestic beer sales at Lotte Mart in 2010, 93.2 percent were 1,500 won or less for a 335-milliliter can. In 2012, it was 92.6 percent and this year, 87.7 percent.

On the other hand, cans of beer priced 1,500 won or more constituted 6.8 percent of domestic sales in 2010, 7.4 percent in 2012 and 12.3 percent this year through Friday.

Lee noted that with the growing popularity of imported beer, local breweries are differentiating their products by launching pricier, high-quality beers.

This year, Oriental Brewery came out with Alestone and Hite-Jinro introduced Queen’s Ale. The new products were launched ahead of Lotte Beverage bringing out its Kloud premium beer.

The retailer’s study also showed cans of beer have gotten bigger. In 2010, less than 20 percent of total sales of imported beer were 500-milliliter cans, but this year the percentage jumped to 65.2 percent.

The share of domestic sales attributed to 500-milliliter cans jumped 5.3 percent to 11.3 percent over the same period.

“In the past, when imported beers were not that popular, most domestic beer cans were 355 milliliters in volume,” said an official from Lotte. “But with more competition, this has changed, and the paradigm has become imported beer cans that are normally 500 milliliters.”

BY lee eun-joo [angie@joongang.co.kr]





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