Premium liquor in Korea mostly referred to Scotch whisky. But this is no longer the case, as the market’s key players have moved on to low-alcohol spirits.
This new trend, according to top distillers, reflects the change of the market and the needs of young consumers, while retaining the values of whiskey.
Spearheading the low-alcohol spirit sector was Golden Blue, a local whiskey brand launched in 2009 by a medium-sized local distiller in Busan.
Differentiating itself from leading Scotch whisky brands such as Diageo’s Windsor, Pernod Ricard’s Imperial and Lotte Liquor’s Scotch Blue, Golden Blue came up with an alcohol by volume level of 36.5 percent.
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| W Ice by Windsor |
This initially sparked critical responses as the concept of Scotch whisky as defined by the Scotch Whisky Association refers to distilled beverages made from water and malted barley and that contains an ABV level of 40 percent or more.
This was also why Golden Blue adopted the label “Super Premium Whisky,” instead of “Scotch.” Even the word “whisky” remained controversial as the product deviated from the conventional standards.
Despite the debate, the rookie item soon picked up momentum and became the market’s No. 3 product. Golden Blue sold 61,474 boxes in the first quarter this year, up 65 percent from the same period last year, according to the Korea Alcohol & Liquor Industry Association.
The leap is all the more conspicuous, considering that conventional Scotch whisky sales in Korea last year fell 12 percent on-year.
“Over recent years, Korean consumers have shown a visible preference for mild taste, not just for whiskey but also for tobacco and coffee,” said an official of Golden Blue.
“They are breaking away from the heavy drinking practices and starting to care more about their health.”
Spurred by the fast rise of the “water-diluted” Golden Blue, top-ranking distillers fell in line with this new trend.
In March this year, market champion Diageo launched W Ice by Windsor, a premium spirit drink with an ABV level of 35 percent.
“We take pride in the fact that our product was blended with 99.85 percent Scotch whisky and that it offers a smoother taste without losing the unique Scotch flavor,” said CEO Cho Kil-soo.
Rival company Pernod Ricard, on the other hand, decided to stick to its long-time hard liquor business for the time being ― and is paying for the consequences.
The sales of its flagship whiskey brand Imperial was 375,466 boxes, down 17.5 percent from the previous year, showing the steepest downtrend among key whiskey-makers.
The France-based global company also was handed down a fine of 20 billion won ($18 million) for under-reporting its operating profits.
To make things worse, its labor union is currently on strike, demanding that CEO Jean-Manuel Spriet take responsibility for the wage negotiation failure and step down.
“We are planning to launch a new product, possibly within the year, but it will not be a low-alcohol spirit,” said company spokesperson Yoo Ho-sung.
By Bae Hyun-jung (tellme@heraldcorp.com)
