Lotte Chilsung Led by 'Saero'... Joins the '3 Trillion Club' (Comprehensive)

Sales of 3.2247 Trillion Won... Up 13.5% YoY
Soju 'Saero' and Zero-Calorie Carbonated Drinks Perform Well... Beer Remains Weak

Lotte Chilsung Beverage has entered the 3 trillion won sales club as its zero-calorie carbonated drinks and soju business showed strong performance.

Lotte Chilsung Beverage announced on the 5th through a disclosure that its consolidated operating profit last year was tentatively estimated at 210.7 billion won, down 5.5% from the previous year. During the same period, sales increased by 13.5% to 3.2247 trillion won compared to the previous year, and net profit rose 27% to 166.5 billion won. Operating profit in the fourth quarter of last year was 8 billion won, down 67.3% year-on-year, while sales and net profit for the same period were 918.4 billion won and 35.3 billion won, respectively.

Looking at each business division, the beverage division recorded sales of 1.9534 trillion won, up 4.6% from 1.8678 trillion won a year earlier, but operating profit decreased by 2.3% to 162 billion won. The “Healthy Pleasure” trend continued, with zero-calorie and health drinks maintaining growth, but persistent inflation and ongoing global supply chain instability acted as negative factors.

Carbonated drinks led growth, increasing sales by 6.2% (52.5 billion won) to 896.8 billion won compared to the previous year. Energy drinks also recorded high growth of 31.9% with sales of 79 billion won, and sports drinks supported growth with an 11.8% increase to 61.1 billion won. On the other hand, sales in the coffee, bottled water, and juice categories slightly declined. Domestic sales grew 3.8% to 1.825 trillion won, while exports, although relatively smaller in scale, grew 21.0% year-on-year to 116 billion won.

The liquor division also continued its top-line growth, recording sales of 803.9 billion won, up 3.8% from 774.5 billion won the previous year. However, operating profit during the same period fell 9.0% to 33.6 billion won. Persistent inflation and changes in alcohol consumption trends, such as fewer company dinners and year-end parties, had an impact. The burden from rising prices of key raw materials like ethanol and malt, as well as increased business expenses, also continued.

The liquor division’s growth was again driven by soju. Soju sales last year rose 22.4% year-on-year to 338.7 billion won, maintaining an upward trend. In contrast, beer and wine underperformed. Beer sales amounted to 80.7 billion won, down 18.0% from a year earlier, and wine sales also declined 14.7% to 84.9 billion won due to decreased demand.

Lotte Chilsung plans to aggressively respond to the zero-calorie carbonated drink market this year and take the lead. Zero-calorie carbonated drink sales were only 89 billion won in 2021 but grew more than threefold in two years to ▲188.5 billion won in 2022 and ▲273 billion won in 2023. Lotte Chilsung expects related sales to grow by more than 10% this year compared to last year, reaching a scale of 300 billion won.

To this end, the company plans to actively launch new products. Starting next month with 'Milkis Zero Strawberry & Banana,' it will continue releasing new products such as 'Pepsi Zero Decaf,' 'Chilsung Cider Zero Green Plum,' and 'Pepsi Zero Pineapple.' Additionally, a renewed product featuring the new Pepsi logo will be introduced in the first quarter of this year, and the Chilsung Cider and Cantata brands will be renewed within the year.

The liquor business will also continue its offensive by strengthening the soju lineup. First, it plans to add new flavors to ‘Saero,’ launched in September 2022, raising annual sales to around 370 billion won, and to renew the soju brand 'Cheoeumcheoreom' in the first quarter. Furthermore, along with the recently launched distilled soju ‘Yeoul,’ a premium cheongju brand of the pure rice wine type will be introduced in the second half of the year, expanding the premium lineup.

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