Jeju Beer Expands Lineup, Will It Write a Plot Twist?

‘Jeju Lager’ Followed by Non-Alcoholic ‘Jeju Nubo 0.5’ Launch Ahead
Interest Grows in Expanding Consumer Base and Turning Profits
Challenging to Increase Market Share in Entertainment Sector Dominated by Large Companies
Plans for Differentiated Marketing Through Selection and Focus
Beer Portfolio to Be Further Diversified

[Asia Economy Reporter Koo Eun-mo] Craft beer company Jeju Beer recently introduced a popular lager product and is now preparing to launch a non-alcoholic beer. With consecutive new product releases aimed at expanding its consumer base and sales, attention is focused on whether Jeju Beer can escape the deficit trap and successfully establish itself in the mass beer market.

According to industry sources on the 9th, Jeju Beer plans to release a non-alcoholic beer called ‘Jeju Nuvo 0.5’ this month. Recently, the domestic beer industry has seen a growing trend of enjoying lighter alcoholic beverages, leading to a series of non-alcoholic product launches. Jeju Beer intends to expand its consumer base by responding to the diverse demands of drinkers through the release of non-alcoholic beer. Additionally, as the product will be available for online sales, the company expects new business opportunities.

Earlier, Jeju Beer launched its first lager product, ‘Jeju Lager Project 001,’ last month. Jeju Lager is a 100% all-malt authentic lager made using the four main ingredients of beer?water, barley malt, hops, and yeast?applying the German Beer Purity Law principle. Recently, to mark the 5th anniversary of its flagship product ‘Jeju Wit Ale,’ the company enhanced the product by adding fresh Jeju tangerine peel as an ingredient.

Behind Jeju Beer’s recent proactive moves lies the challenge of turning a profit. Jeju Beer was the first craft beer company to be listed on the KOSDAQ market in May last year, but it has accumulated losses totaling 32.5 billion KRW over the past five years, with the deficit widening since its listing. Since it was listed under the Tesla requirements (special listing for companies without profits), continued losses could lead to designation as a management item and delisting, making a turnaround to profitability by 2024 urgent.

Jeju Beer’s representative strategy for turning a profit is entering the lager market, led by Jeju Lager. Since the domestic beer market is lager-centered and expanding sales requires broadening distribution channels into the entertainment market, which accounts for half of the market, this move is necessary. However, industry consensus is that it will not be easy for Jeju Beer to secure market share, given that large companies like OB Beer and Hite Jinro control over 90% of the market and Jeju Beer cannot afford large-scale marketing expenses.

An industry insider said, “It is difficult to achieve significant differentiation from existing products with lager beer, and without aggressive marketing spending, it is hard for Jeju Lager to secure limited retail refrigerator space.” They added, “The absence of 500ml bottle products, which account for 80% of the entertainment market, is also a weakness.”

In response, Jeju Beer stated that it is difficult to replicate previous cases of expanding entertainment market share through massive advertising and marketing expenses. Jeju Beer spent 3.45529 billion KRW on advertising last year, more than double the 1.57978 billion KRW spent in 2020, but the actual effect was minimal. A Jeju Beer representative said, “To achieve maximum efficiency within a limited budget, selection and concentration are necessary. Since its launch, Jeju Beer has continuously offered opportunities to experience the beer gourmet culture it pursues.” Recently, Jeju Beer launched the ‘I Will Commute to Jeju’ campaign to commemorate the release of Jeju Lager, supporting Jeju travel, and is preparing marketing strategies to enhance drinking experiences in the future.

Jeju Beer plans to diversify its portfolio further by dividing its beers into three categories: Original, Casual, and Next. The Original line consists of products that uphold the brand identity, such as Jeju Wit Ale, ‘Jeju Pelong Ale,’ and ‘Jeju Geomeong Ale.’ Original line products currently account for more than 70% of Jeju Beer’s sales. The Casual line reflects contemporary trends. A Jeju Beer representative said, “We will continue collaborations with contemporary cultural icons to read trends and will keep conducting Jeju Beer-style collaborations so that beer can be consumed as a cultural content.” The Next line features experimental beers differentiated from existing ones. Within this year, Jeju Beer plans to introduce ▲‘Barrel F,’ made by aging ingredients like chocolate and salt in oak barrels ▲‘Fruityze,’ a sparkling fruit ale targeting wine entry users ▲and the ‘Brave Kitchen Project,’ an experimental series using small-scale breweries in Jeju.

Jeju Beer also aims to strengthen its overseas market development. Currently, Jeju Beer exports products to 12 countries, including the United States, China, Japan, and Australia. Although overseas exports are still at an early stage and sales volume is not large, exports grew 250% year-on-year last year, showing a growth trend. Jeju Beer has so far responded to overseas markets at a test level due to production capacity and the COVID-19 pandemic but plans to gradually consider various strategic approaches beyond simple product exports in the future.

This content was produced with the assistance of AI translation services.