[Report] Hwayo Crafted in Onggi Jars... Leveraging 22 Years of Competitiveness for Another 100 Billion Won Sales Challenge

On-site at the Hwayo Factory in Yeoju, Gyeonggi Province
Aiming for 100 Billion Won in Sales Again by 2026
Setting Sights on Expansion with Exports to 30 Countries

On December 1, at the Hwayo factory located in Ganam-eup, Yeoju-si, Gyeonggi-do, the air in the production building was filled with a subtle blend of cooked rice aroma and alcohol. The facility featured intricate piping, stainless steel equipment, and a dense array of sensors-elements not commonly found in typical distilleries. Throughout the entire process, including rice steaming, saccharification, fermentation, distillation, and aging, an automated reaction control system and artificial intelligence (AI)-based analysis equipment were employed, enabling real-time management of key variables in this smart factory.

The manufacturing identity of Hwayo was most evident in its aging room. Including the Onggi jars first introduced during the initial product launch in 2004, over 350 Onggi jars were systematically arranged, each crafted by artisans and varying in size and thickness. Due to the "breathing vessel" characteristic, minute oxygen exchange occurs, serving as a crucial factor in determining the aroma, texture, and oxidative stability of the base spirit. The method of integrating traditional Onggi aging atop an automated process has been a consistent manufacturing principle for Hwayo since its humble beginnings with just two tanks 22 years ago. The combination of technology and tradition forms the backbone of Hwayo's competitiveness in the premium distilled spirits market.

A view of the Onggi aging room at the Hwayo factory located in Ganam-eup, Yeoju-si, Gyeonggi-do on the 1st. Hwayo

A view of the bottling process at the Hwayo factory located in Ganam-eup, Yeoju-si, Gyeonggi-do on the 1st. Hwayo

Hwayo has maintained its identity as a distilled soju brand based on a lengthy production process. Since it takes at least four months to produce a single bottle-from preparing the base spirit to fermentation-it took a long time for the brand to secure a foothold in the market. Especially in the domestic liquor market, which was dominated by diluted soju, the high-cost structure of distilled products put Hwayo at a disadvantage in competition.

In fact, Hwayo struggled with losses for 12 years after its establishment. However, since 2020, as trends such as home drinking and premium consumption have become established, the market environment has begun to change. Hwayo's sales grew more than threefold, from 12.8 billion won in 2020 to 39.7 billion won last year. Operating profit also reached 9.5 billion won, resulting in an operating margin in the 20% range.

Celebrating its 22nd anniversary, Hwayo has set the expansion of its global market as a core pillar and is planning to make another attempt to achieve 100 billion won in sales by 2026. The company views next year as a turning point for renewed growth, with a strategy to broaden the scope of the "K-distilled spirits" market. Cho Heekyung, CEO of Hwayo, emphasized that the essence of the 100 billion won goal is not "the speed of growth" but "the value the brand must achieve." She stated, "100 billion won is not merely a sales target, but the point Hwayo's brand identity must reach," adding, "By 2026, we must achieve 100 billion won in sales."

Hwayo is seeking new growth drivers in the global market. The brand currently exports to more than 30 countries, including the United States, United Kingdom, Japan, Australia, and Canada, and is refining its product portfolio and distribution strategies to suit the consumption characteristics of each country. Core product lines such as "Hwayo 25, 41, 53" and "X.Premium" are positioned as premium distilled spirits in local markets. CEO Cho explained, "Our commitment to the 41% ABV product stems from the belief that 'the most Korean is the most global.' While K-content has become a solid brand in the global market, Korean alcohol culture has yet to be introduced. We intend to address this through cultural marketing."

The most urgent task for expanding global influence is cited as a reform of the liquor tax system. Korea still maintains an ad valorem tax structure, making it difficult for distilled soju made with high-quality ingredients to secure price competitiveness. Park Junseong, Head of Production at Hwayo, noted, "If the ex-factory price is 10,000 won, about half goes to taxes," adding, "If Korea switches to a specific tax system like most OECD countries, price competitiveness would increase by at least 30%." Hwayo has submitted petitions for liquor tax reform 38 times to date.

Jo Heekyung, CEO of Hwayo, is holding a press conference at the Hwayo factory located in Ganam-eup, Yeoju-si, Gyeonggi-do on the 1st. Hwayo

Starting next year, Hwayo plans to build a new portfolio that includes RTD (Ready to Drink) and low-alcohol products, as well as canned packaging. The company is also working on a comprehensive overhaul of its sales structure, including region-specific products that account for regulatory differences by country and strengthening online distribution channels.

Cho Taekwon, Chairman of Hwayo Group, stated, "While inheriting tradition, Hwayo will continue to grow as a cultural and industrial platform that leads the future of Korean distilled spirits through a quality system and institutional improvements that meet global standards." He emphasized, "For our distilled spirits to be properly evaluated in the global market, not only must the brand make efforts, but there must also be changes throughout the entire industry structure."

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