Wine Importer Continuing 'Bulk-up' Strategy... Growth Momentum 'Slows Down'

Shinsegae L&B, Sales Reach 200 Billion Won... Growth Slows
Geumyang, Ayoung, Nara Also Achieve Sales in 100 Billion Won Range
Wine Market Expected to Polarize into High-End and Low-End Segments This Year

Domestic wine importers continued to expand their scale last year. However, as the COVID-19 boom has somewhat subsided, the explosive growth seen over the past 2-3 years appears to be entering a stabilization phase.

According to the Financial Supervisory Service's electronic disclosure system (DART) on the 11th, Shinsegae L&B recorded sales of 206.36773 billion KRW last year. Shinsegae L&B was the only domestic wine importer to surpass 200 billion KRW in sales. Shinsegae L&B's sales, which were around 51.7 billion KRW in 2016, more than doubled to 107.2 billion KRW in 2019, and then nearly doubled again within two years to approach 200 billion KRW in 2021. However, last year, sales increased by only 3.2% compared to the previous year (199.95697 billion KRW), showing a slight slowdown in growth.

Besides Shinsegae L&B, three major domestic wine importers?Geumyang International, Ayang FBC, and Nara Sella?also surpassed 100 billion KRW in sales, driven by growth in on-premise channels such as hotels, bars, and restaurants. Geumyang International, famous for ‘1865’, and Ayang FBC, importer of ‘Casillero del Diablo’, recorded sales of 141.41951 billion KRW and 124.18072 billion KRW respectively, marking two consecutive years of over 100 billion KRW in sales. Nara Sella, which is preparing for an initial public offering (IPO) aiming to list on the KOSDAQ market next month, recorded sales of 107.1625 billion KRW last year, a 21.2% increase from the previous year, surpassing 100 billion KRW for the first time.

Most companies within the top 10 also expanded their scale. Lotte Chilsung Beverage, buoyed by the introduction of new brands such as Chile’s ‘1887’ and the U.S.’s ‘Bread and Butter’, recorded 99.628 billion KRW, a 19.8% increase from 2021, aiming to surpass 100 billion KRW this year. Le Vin de Mail also exceeded 50 billion KRW with 53.65931 billion KRW. Additionally, Hite Jinro (44.17031 billion KRW) and Enoteca Korea (42.13567 billion KRW) continued to achieve double-digit growth rates.

The wine boom driven by the home drinking culture that spread after COVID-19 continued last year, boosting importers’ performance. According to the Korea Customs Service, wine import value last year was 581.26 million USD (approximately 767.4 billion KRW), a 3.8% increase from 559.81 million USD in 2021. Domestic wine imports first exceeded the 200 million USD mark in 2017, surpassed 300 million USD in 2020 after the pandemic began, and showed explosive growth of nearly 70% in 2021 compared to the previous year, breaking the 500 million USD barrier. Despite the high growth in the previous year, last year’s import value continued to grow, confirming the recent wine craze.

However, compared to the high growth rates of 30-50% seen in 2021 by individual importers, the market appears to have somewhat plateaued. The steep growth over the past 2-3 years, combined with concerns over economic recession, price increases from major wine-producing countries such as France and the U.S., and exchange rate fluctuations, have affected consumption. An industry insider explained, “The rise in wine import prices has impacted both the cost of goods sold and selling prices, leading to a slowdown in sales growth and a decline in operating profit margins.” Additionally, the resumption of promotional activities such as in-store tasting events and offline events, which were halted due to COVID-19, is also posing a burden on importers.

This year, the domestic wine market is expected to show consumption levels similar to last year due to reduced spending amid economic recession, with a growing polarization in consumption. An industry insider said, “With younger generations entering as new consumers, mid- to long-term growth is expected to continue,” adding, “The market is anticipated to grow at both ends with premium wines and ultra-low-priced wines.”

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