Hwayo Lowers Its Price... Aims to Capture the Soju Market with "19Geum"

Hwayo Launches First New Product in 10 Years: Hwayo19Geum
Leading the Popularization of Distilled Soju with Affordable Pricing Around 10,000 Won
Securing a Stable Domestic Market Base... Future Export Performance in Focus

The distilled soju brand Hwayo is drawing attention as it embarks on the "popularization of distilled soju" by launching a new product priced under 10,000 won. The company aims to strengthen its price competitiveness, which has been cited as a factor limiting the growth of the premium distilled soju market, and there is growing market interest in whether Hwayo can further increase its presence in the domestic market. Hwayo plans to use the popularization of domestic distilled soju as a foundation to expand exports and become a central player in the K-liquor industry.

According to the liquor industry on July 24, Hwayo, the liquor-specialized subsidiary of Gwangjuyo Group, recently launched a new distilled soju called "Hwayo19Geum." Hwayo19Geum is Hwayo's first new product in 10 years. It is a 19% ABV distilled soju made by blending oak-aged base spirit with base spirit aged in traditional Korean earthenware jars, using 100% domestically grown rice.

A New Weapon to Lead the Popularization of Distilled Soju: Hwayo19Geum

Hoikyung Cho, CEO of Hwayo

At a recent media event for the new product launch, Hoikyung Cho, CEO of Hwayo, stated, "Hwayo aimed to create a premium Korean distilled spirit by combining traditional and modern techniques," and introduced Hwayo19Geum as "a product that is smoother and has a deeper aroma than traditional soju." She added, "Hwayo19Geum embodies Hwayo's essential philosophy of enjoying good liquor in moderation, and was launched to propose the proper drinking culture of Korea in the global K-food scene."

This new Hwayo19Geum stands out as it was launched with the explicit goal of "popularizing distilled soju." Since entering the liquor market in 2003, Hwayo has focused on premiumization, centering on its flagship product "Hwayo25" and expanding its lineup with "Hwayo41," "Hwayo53," and "HwayoX.Premium." The strategy was to prove that Korean distilled soju can match the quality of premium foreign spirits such as whiskey, and to lead the growth of the distilled soju market through high-quality products.

In fact, Hwayo's strategy of positioning itself as a premium liquor brand has yielded significant results. Last year, Hwayo's sales reached 39.7 billion won, an increase of over 10% compared to the previous year, and operating profit was 9.5 billion won, with an operating margin in the 20% range. Notably, compared to 2020, when the COVID-19 pandemic began in earnest (12.8 billion won), sales have more than tripled over four years.

The domestic distilled soju market has continued to grow steadily, but there have also been clear limitations. According to the National Tax Service, the domestic shipment volume of distilled soju peaked in 2022 and has remained flat for the past two years.

Hwayo identifies two main reasons for the stagnation in the growth of the distilled soju market: a consumer culture accustomed to diluted soju, and the relatively high price point of distilled soju. The market for diluted soju, which is relatively inexpensive, is dominant, while the higher price of distilled soju has become a barrier, limiting opportunities for consumers to try it.

For this reason, Hwayo has set the price of Hwayo19Geum at around 10,000 won in major supermarkets. While this is higher than diluted soju, it is relatively affordable compared to other competing distilled spirits.

Hwayo maintains that the growth potential of the distilled soju market remains strong. This is because demand for distilled soju continues to expand, driven by trends such as pairing with gourmet food and increased interest in healthy drinking culture. A Hwayo representative explained, "There is an ongoing trend toward premiumized consumption, which could be called the 'wine-ification' of soju, and a shift toward individuality and quality-centered consumption, especially among the MZ generation. Furthermore, a drinking culture focused on food pairing is creating an environment that is even more suitable for distilled soju. In this context, Hwayo plans to lead the market with a strategy centered on product diversification and brand experience."

Hwayo's new distilled soju 'Hwayo19Geum'

Aiming to Become the Center of Global K-Liquor... The Key Is Securing a Stable Domestic Base

Hwayo plans to use Hwayo19Geum as a stepping stone for the popularization of distilled soju in Korea, with the ultimate goal of expanding into overseas markets. Hwayo currently exports to 27 countries, including the United States, Japan, and China, and is positioning itself as a premium soju brand mainly in high-end restaurants and bars. Going forward, the company aims to secure leadership in the "K-distilled spirit" category by expanding country-specific portfolios and linking branding with K-content.

A Hwayo representative said, "Korean distilled soju, including Hwayo, is a product that combines tradition and premium quality, making it highly competitive in the global market. As Korean cuisine becomes more globalized, interest in 'Korean liquor' is also increasing. Distilled soju, with its unique story and quality derived from ingredients such as rice and traditional earthenware aging, has the potential to establish itself as a culturally significant beverage, like wine or whiskey."

Hwayo's flagship product 'Hwayo25'

However, there are many hurdles that distilled soju brands like Hwayo must overcome to establish themselves in overseas markets. These include differences in liquor distribution structures and regulations in each country, as well as the relatively low awareness of distilled soju itself. A Hwayo representative commented, "In many cases, soju is known only as diluted soju, so it is necessary for premium distilled spirits like Hwayo to establish their own unique positioning. To this end, we plan to strengthen collaboration with local partners and continuously conduct brand campaigns to communicate to global consumers that Hwayo is not just soju, but a premium distilled spirit that connects Korean tradition and modernity."

For the growth and export expansion of distilled soju brands like Hwayo, establishing a solid position in the domestic market is expected to be the top priority. Currently, distilled soju accounts for less than 5% of the domestic distilled spirits market. The current tax system, which is based on a specific tax, is also cited as a factor hindering the active expansion of the domestic distilled spirits industry, as well as the enhancement of quality and awareness of distilled soju.

Meanwhile, distilled soju is a spirit made by fermenting grains such as rice or barley to produce a base liquor, which is then refined and heated to collect the resulting alcohol. When the base liquor is heated, the boiling point of alcohol (78°C) is lower than that of water (100°C), so the alcohol evaporates first. By collecting and cooling this vapor, it condenses back into a liquid, resulting in a spirit with a higher alcohol concentration than the original base liquor. This process is called distillation, and soju made through this process is referred to as distilled soju.

Distilled soju is characterized by the distinct aroma of its grain ingredients, and due to the nature of the production process, it contains very few impurities, resulting in relatively mild hangovers. In contrast, diluted soju is made by mixing water with pure ethanol, which is produced through continuous distillation and contains none of the original flavor or aroma, and then adding sweeteners to lower the alcohol content. While diluted soju is inexpensive due to mass production, if not served at the proper temperature, the alcohol aroma can be quite strong.

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