'NO Hoeshik' Spread, Native Whiskey Fails to Bring Smiles... Only Owner Dividends Grow Substantially

Last year, while the whiskey market performed well, Golden Blue, the country's top local company, received a disappointing report card. The shift in alcohol consumption culture, which led to a decrease in company dinners, was analyzed as an obstacle to Golden Blue's growth, as its sales channels were concentrated in the entertainment market. The growth trend in the whiskey market is expected to continue for the time being, making the diversification of Golden Blue's portfolio the key to a rebound in performance this year.

According to the Financial Supervisory Service's electronic disclosure system on the 10th, Golden Blue's operating profit last year was 49.85681 billion KRW, down 2.8% from 51.29836 billion KRW a year earlier. During the same period, sales also decreased by 3.5% to 224.15686 billion KRW from 232.29952 billion KRW the previous year, and net profit fell 20.9% from 39.7018 billion KRW to 31.41264 billion KRW.

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Although performance declined, dividends were increased. At the recent regular shareholders' meeting, Golden Blue decided on a dividend of 120 KRW per common share. This is a 30% increase from last year's 90 KRW, raising the total dividend amount from about 4.9 billion KRW to approximately 6.5 billion KRW. Most of the benefits from this dividend increase go to Chairman Park Yong-su and his family. Currently, Park holds 18.41% of Golden Blue's shares, his wife Kim Hye-ja holds 18.45%, and their eldest daughter Park Dong-young and second daughter Park So-young, the CEO of Golden Blue, each hold 22.40%. The Park family’s total stake amounts to 81.66%, entitling them to receive 5.3 billion KRW out of the total 6.5 billion KRW in dividends.

Although the domestic whiskey market grew last year, the reason for Golden Blue's sluggish performance is attributed to changes in alcohol consumption culture. Local whiskey has traditionally been distributed mainly through the entertainment market, but even after the COVID-19 endemic, the rapid reduction in company dinner culture negatively impacted the local whiskey industry, which relies heavily on the entertainment market. Golden Blue has tried to address the problem of sales channels being concentrated in the entertainment market by expanding its presence in supermarkets and convenience stores to increase the share of the home market, but the ratio of entertainment to home market sales is still known to be about 8 to 2.

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The surge in whiskey popularity domestically has also led foreign companies to intensify their offensive, which has become a burden for Golden Blue. Authentic whiskey-producing countries such as Scotland are actively targeting the domestic market by offering a wide range of options from low-priced blended whiskeys for highballs to high-priced single malt whiskeys. This means the position of local whiskeys, which lack heritage, is gradually shrinking.

Golden Blue has responded by continuously strengthening its imported whiskey lineup, but the share of imported products in total sales still falls far short of its own whiskey. In fact, last year, Golden Blue's own whiskey product sales were 198 billion KRW, down 4.4% from 207.1 billion KRW a year earlier, while sales of imported foreign brand whiskey products increased by 193.6% from 3 billion KRW to 8.8 billion KRW during the same period, showing growth.

As the operating environment for local whiskey worsens, there is an analysis that Golden Blue's performance rebound depends on portfolio diversification. Golden Blue plans to strengthen marketing for its flagship imported whiskey brand Kavalan this year. Expecting the single malt whiskey craze to continue for the time being, it will focus on activities that expand consumer choices, such as releasing limited edition packages and strengthening new lineups. It also plans to put more effort into expanding sales channels through duty-free shops.

'Golden Blue The Great Journey Port Cask'

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Additionally, Golden Blue is strategizing to secure the title of a leading 'K-whiskey' company by reintroducing its own aged whiskey. Last month, Golden Blue launched ‘Golden Blue The Great Journey Port Cask,’ aged in Busan’s Gijang. This is the second product following the sherry cask product released in August last year. However, since the whiskey’s base spirit is not distilled domestically but only aged in Korea, most evaluations consider it difficult to regard this product as a true K-whiskey in the genuine sense.

Meanwhile, in February, Golden Blue took its first step toward second-generation management by appointing Park So-young, the second daughter of Chairman Park Yong-su, as co-CEO. Park, who joined Golden Blue in 2018, also serves as CEO of Golden Blue International, a subsidiary responsible for the import and distribution of alcoholic beverages. An industry insider said, “Since the owner family holds more than 80% of the shares, the new CEO Park is likely to vigorously push forward projects such as investments and new businesses.”

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