Wine bubble bursts in S.Korea as whisky frenzy grows

The South Korean fever for wine has cooled, with its imports down in the first half for a second straight year as the popularity of whisky among young generations has rapidly grown and with more people dining out in the abating COVID-19 era.

Local wine importers are increasing sales of premium products and diversified markets to actively deal with the shrinking sector.

Wine imports fell 10.8% to 31,300 tons in the first half from a year earlier with values of overseas purchases down 7.9% to $274 million, according to customs data on Wednesday. The import volume of the alcohol made from fermented grapes skidded 13.2% in the January-June 2022 period from a half-year record of 40,400 tons logged in the same period of 2021.

Wine imports have been falling since 2021 when they hit an all-time high of 76,575 tons.

On the other hand, the domestic whisky market has been growing thanks to rising demand from younger millennials and Gen Zers.

Whisky imports surged by 50.9% to a record high of 16,900 tons in the first half of 2023 from a year earlier when overseas purchases of the spirit jumped 63.8%.

“A rise in demand for a certain liquor such as whisky often results in a drop in consumption of other types of alcohol as customers in the local market are limited,” said a source in the local beverage import industry.

BUBBLE BURST

The country’s wine market enjoyed strong growth when COVID-19 restrictions led people to drink at home. The alcoholic drink became more accessible to the budget-conscious and even more popular with customers willing to pay more.

But the trend has been quickly changing as more people went out for drinks with the lifting of pandemic restrictions, where they opted for less-expensive beer or soju, a clear and colorless distilled alcoholic beverage.

“The wine bubble has burst after imports soared during the pandemic period,” said a beverage industry source.

Local wine importers are diversifying their markets and products to improve the weakening sector.

They have introduced more premium wine to lure young customers, who seek unique alcoholic beverages, while shifting their target customers to those drinking at restaurants and bars from individuals imbibing at home, on which the industry had focused for the last three years.

Write to Young Chan Song at 0full@hankyung.com
 

Jongwoo Cheon edited this article.