Diageo Korea muscles into Japanese beverage market

TOKYO ― Diageo Korea, the Korean branch of the world’s largest distiller, is poised to enter the neighboring Japanese ready-to-drink market, leveraging its production line in Icheon, Gyeonggi Province.

“Riding on the fast-growing demand for bottled alcoholic beverages in Japan, we debuted Smirnoff Ice Green Apple, produced on the Icheon production line, in Japan last week,” Diageo Korea CEO Cho Kil-soo said in a press meeting held in Tokyo on Thursday.

“We expect to rake in about $15 million in sales in 2015, a fivefold jump from sales estimate this year.”

Bottled and canned alcoholic beverages have been rapidly replacing vodka consumption in Japan, with their sales seeing a 10.8 percent jump from those last year, according to data from Diageo Korea.

“Our exceptional craftsmanship and product quality is appealing to the sophisticated Japanese consumers,” Cho said. “We’ll further tap into other overseas markets, using our experience in Japan as a stepping stone,” Cho said.

Last year, the British drinks giant injected about 5 billion won ($4.9 million) to add production lines in Korea and to increase the export volume.

Products manufactured at the Icheon plant, one of Diageo’s three plants in the Asia-Pacific region, are currently exported to Japan, China, Hong Kong, Taiwan and the Philippines. Previously, Smirnoff Ice bottles in Japan had been made by a Japanese OEM supplier.

As to plans for new product releases in the second half of this year, Cho said Diageo will launch a single grain whiskey product dubbed Haig Club in October across the globe.

Haig Club will be the first single grain whisky to be sold in Korea and the company believes it will make a breakthrough amid a downturn in the domestic whiskey market.

Besides Smirnoff, Diageo owns such global beverage brands as Winsor, Johnnie Walker, Guinness and Baileys.

By Suk Gee-hyun, The Korea Herald correspondent
(monicasuk@heraldcorp.com)