Domestic brands challenge rise of imported beer

Domestic beer brands are challenging the dominance of imported beer in the Korean market with new products featuring low prices and light, clean tastes that they hope will stand out against global top brands.

Such moves are proving effective, with domestic beer gaining a majority of beer sales in June, at above 50 percent, up from an average of 47.8 percent for the first five months of 2017, according to discount chain E-mart, citing its stores’ statistics.

Standing in the lead are domestic powerhouses Hite Jinro and Lotte Liquor, who respectively released the new brands FiLite and Fitz ahead of the peak season for beer sales.

Launched in April, FiLite sold over 1.2 million cans in just two months, as it created buzz on social media for its low prices and crisp finish. The sparkling liquor is made with 100 percent aroma hops and Korean barley, offering a carbonated alternative to beer. 

Fitz, meanwhile, sold 15 million bottles in its first month, approximately six bottles per second, according to Lotte. It is a light lager beer made with a so-called “super yeast” that increases fermentation to reduce lingering aftertaste.

Unlike Fitz, which is sold in restaurants and bars, FiLite has been marketed solely for home consumption.

FiLite costs less than 900 won (80 cents) per can -- a “40 percent reduction vis-a-vis other beers,” according to Hite Jinro, while Fitz was designed for the low-priced beer market as an alternative to Lotte’s flagship premium Kloud beer.

The rapid sales of these products are boosting domestic brands’ footing in a market that has been dominated by imported beers.

The combination of steep discounts, particularly in convenience stores, and Korean consumers’ preferences for imported beer, had cut into the market share of homegrown brands.

Still, it is too early to say whether the two new products will see stable demand, according to industry watchers.

Hite Jinro is finding it difficult to keep supply in pace with demand, while Fitz is still trying to break into a standard beer market that has long been divided between Hite Jinro’s Hite and Oriental Brewery’s Cass beers.

“We are still in the early stage, so we will focus on expanding distribution of Fitz to maximize our brand exposure,” said a spokesman for Lotte Liquor. 

By Won Ho-jung (hjwon@heraldcorp.com)