The Shaken Status of the 'National Drink' Soju
In the first half of this year, both of Korea's leading soju companies saw a decline in soju sales. Changes in drinking culture, such as the diversification of alcoholic beverages and a decrease in overall alcohol consumption, have contributed to reduced domestic soju consumption. Although targeting overseas markets has become even more important for the continued growth of soju, which is Korea's representative alcoholic beverage, even exports have slowed down this year.
Soju Also Tastes 'Bitter' Amid Economic Downturn
According to the Financial Supervisory Service's electronic disclosure system on August 28, Hite Jinro's soju sales in the first half of this year totaled 772.1 billion won, down 0.5% from 776.0 billion won in the same period last year. During the same period, Lotte Chilsung Beverage's soju sales also fell 3.4% to 212.0 billion won from 219.4 billion won a year earlier. This is attributed to a decrease in overall demand for alcoholic beverages, including soju, as the restaurant and dining-out sector contracted due to the economic downturn. In particular, soju is more sensitive to economic conditions than beer, as it accounts for a larger share of the nightlife market.
In addition, the possibility of a product price increase ahead of the 21st presidential election in June led to preemptive buying in the first quarter, which contributed to the sales decline in the second quarter. Earlier, in May, Hite Jinro raised the shipment prices of major beer products by an average of 2.7%. The company then considered raising soju prices as well but postponed the increase for price stability. However, due to the impact of preemptive buying, domestic soju sales in the first half fell 2.8% year-on-year, outpacing the overall decline in soju sales.
Company Dinners? I'd Rather Drink at Home
The recent decline in soju sales is largely due to changes in drinking culture, such as the reduction in company dinners, which have accelerated since the COVID-19 pandemic. According to Korea Credit Data's "Q2 2025 Small Business Trends" report, the average sales per small business in the second quarter of this year was about 45.07 million won, down 0.8% from the same period last year. While most segments of the restaurant industry saw shrinking sales, bars were hit the hardest, with a 9.2% drop.
As drinking habits shift from group gatherings such as company dinners to more diverse forms like drinking at home or alone, the preference for soju and beer is declining, while demand for whiskey, wine, and traditional liquors is relatively increasing. Furthermore, growing health consciousness, especially among younger generations, is leading to a decrease in the overall population consuming alcohol, which is reinforcing this trend.
Prices Are Rising, Alcohol Content Is Falling
Some point out that the identity of soju is becoming increasingly ambiguous, which is another reason for market stagnation. As the trend toward lower-alcohol beverages spreads in the liquor industry, soju, once synonymous with strong spirits, has been gradually lowering its alcohol content. Last month, Lotte Chilsung Beverage announced it would lower the alcohol content of "Chumchurum" from 16.5% to 16%. Previously, Hite Jinro reduced the alcohol content of "Jinro Is Back" in 2023 and "Chamisul Fresh" last year from 16.5% to 16%.
Lowering the alcohol content of soju has the advantage of appealing to those who prefer a smoother taste and can expand the consumer base, but it also weakens its differentiation from competing beverages. In fact, as soju's alcohol content, which once exceeded 20%, has dropped to around 15%, it has become similar to fermented beverages like wine and sake. Above all, while prices continue to rise each year, the lower alcohol content means soju is losing its "cost-effectiveness," which was once its greatest competitive edge. This could lead to the departure of loyal customers.
Soju Intoxicated by the K-Content Craze, Momentum Slows
With soju companies facing a worsening business environment, expanding overseas sales is now a necessity rather than a choice. Han Yoojeong, a researcher at Hanwha Investment & Securities, stated, "In the past, food and beverage manufacturing was dominated by a few major companies, but recently, the number of companies responding to diverse demands has increased rapidly. In an environment of oversupply, it is no longer reasonable to expect a premium simply because a product was considered premium in the past." She added, "If companies remain focused only on the domestic market, it will be difficult for sales to grow faster than the inflation rate, and profitability is likely to decline over time."
However, soju exports have slowed somewhat this year. According to Korea Customs Service trade statistics, soju exports have steadily increased in recent years thanks to the K-content boom, surpassing 100 million dollars for the first time in 2023 at 101.41 million dollars, and continuing this growth last year with 104.09 million dollars, marking two consecutive years of over 100 million dollars in exports. However, as of July this year, exports stood at 53.76 million dollars (about 75 billion won), a 7.3% decrease compared to 57.66 million dollars in the same period last year.
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Reporter gooeunmo@asiae.co.kr
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Edit Lee Seonju sjlee109@asiae.co.kr
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