04 Sep Diageo eyes whisky resurgence in Korea

FUKUOKA, Japan — South Korea’s whisky market is facing a dark age, in light of sluggish demand for strong liquors and pricey bars serving high-end foreign liquors,

Major whisky brands are seeking ways to revitalize Korea’s lackluster whisky sales, which fell by 38 percent from 2008 to 2015. However, Diageo, the world’s largest distiller and producer of major whisky brands including Johnny Walker and Windsor, said it can help ease the problem by looking to the nearby market Japan.

“For the Korean whisky market to progress, we must benchmark what has happened in Japan, home to Asia’s most mature whisky drinking culture,” Cho Kil-soo, CEO of Diageo Korea and managing director of Diageo Northeast Asia, said during a press conference here last Friday.

The bumpy road that the Japanese whisky market has weathered over the past few decades offers a glimpse of the direction that Diageo should take in Korea, according to the executive.

Like Korea, Japan’s whisky market once experienced a prolonged slump, as an economic downturn coupled with new trends prioritizing health and lighter drinks driving local customers away from strong liquors such as whisky.

However, efforts to reposition whisky as a casual drink not only for the older generation but also for those in their 20s and 30s — such as Suntory’s revival of the Highball, whisky mixed with soda and ice – led to Japan’s whisky consumption picking up and growing by 8.1 percent annually since 2011.

“Massan,” a popular Japanese television drama on NHK involving a woman’s attempt to begin a new whisky company, is also said to have played a major role in making whisky appear more accessible to the public.

And similar efforts, when successfully implemented, can likewise revitalize Korea’s whisky market, albeit with appropriate cultural adaptations and considerations, Cho stressed.

The key is successfully delivering three key values — spreading “awareness” about whiskey as a common drink option, finding “relevancy” between everyday life and whiskey consumption as well as promoting “knowledge” of the heritage and history of high-end whiskey brands, Cho said.

Diageo Korea plans to actively devise new and more innovative ways of enjoying whisky to capture new consumers, particularly the so-called millennials who are shaping the country’s future alcohol consumption patterns.

“Millennials approach drinking in an entirely different way from the older generations, and Diageo is currently working to gauge their demands and characteristics (to develop fitting products and marketing strategies),” Cho said.

Diageo also plans to encourage more home whisky consumption in Korea by launching smaller-sized whiskey products, lighter whiskey varieties and making more investments into expanding its supermarket channels, the Diageo Korea CEO said.

Retail channels including supermarkets account for around 20 percent of Korea’s total whisky sales, but the portion of whisky sales that target homes is much higher in Japan, at 50 percent.

“As is the case with Japan, we hope to reposition whisky as a drink that the broader public can enjoy, rather than one available at selected, shady locations (such as hostess bars),” he said.

“There is no shortcut to achieving such reforms, but only continued innovation is key.”

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