Lotte Liquor Co., Ltd. (www.lotteliquor.com) is known to have made sizable inroads into the overseas market while steadfastly increasing its domestic market share last year. Continuing the winning streak, Lotte Liquor (CEO Lee Jae-hyuk) is said to be leading a ‘Hallyu Drive in Korean Liquor’ this year.
Lotte Liquor is exported a wide variety of liquor to a total of over 70 different countries of the world, including Gyeongwol Soju (exclusively exported to Japan) and other variety of beverage such as Chum Churum (Soju), Seoljungmae (fruit wine), Insamju (ginseng wine) and Chungha (rice wine).
According to the Korea International Trade Association, Lotte Liquor exported last year a total of 4,330,000 crates of Soju (each containing 12 bottles of 700ml each), which accounts for about one half of the total export market of Soju from Korea.
Unlike music and fashions, it requires a considerable cost and time for Korean alcoholic beverage to establish its market overseas. In spite of such limitations, Lotte Liquor attained an exceptionally remarkable result. How did the company do it? It was due to ‘localization strategy.’
In the case of Japan, Lotte Liquor emphasized that Gyeongwol was made with natural water from the Seorak Mountains, and used luxurious square bottles to impress the consumers that it was a premium brand Soju. Thus, Gyeongwol firmly established the position of Korea’s Number 1 Soju in Japan.
Gyeongwol, which Lotte Liquor started exporting to Japan in 1995, was Soju that was literally ‘custom-made’ to meet the sentiment of the Japanese consumers. Gyeongwol means ‘A Moon Reflected in the Mirror’ which derives from a famous Korean poem composed on the theme of moon by a noble classical scholar who drank Soju with his sweetheart at the Gyeongpo Lake Pavilion in Gangneung on the East Coast of Korea. The classic poet sang the moon reciting some romantic phrases such as “Moon Reflected in the Sky,” “Moon Reflected in the Lake,” “Moon Reflected in Sea,” “Moon Reflected in the Glass of Soju”--and “Moon Reflected in the Apple of the Woman’s Eye.”
Many Japanese people have a penchant for metaphoric expressions and the name, Gyeogwol (Moon Reflected in the Moon), obviously paid off in view of such traits of the local people. Lotte Soju which was exported to Japan in that name, gained a great popularity among the local consumers.
In particular, a luxurious green square bottle was used for Gyeongwol to emphasize the nature- friendliness of the product. Gyeongwol is also mild in taste and this made another category of Soju which won a good response from the local consumers and which ultimately made itself the representative Soju of Korea in Japan.
There is a general trend among consumes in Japan where the people mind their health when they drink. To meet this consumer trend, Lotte Liquor used distilled barley water instead of sweetening material, and produced a unique, fine taste. Thanks to the marketing effort to advertise the good effect of drinking Soju mixed with various health drinks and the recognition of the Japanese consumers of the simple-yet-sublime taste of Gyeongwol coming the use of the natural water of Korea, Lotte Liquor won over 70% of brand image in spite of the fact that Gyeongwol was more than 20% higher in price than Japanese Shochu.
In the Chinese-speaking countries, the name was spelt in Chinese characters 初飮初樂 (Chuyinchule) which has the same meaning as the original meaning of the Korean phrase. In the English- speaking countries, Cheoeumcheoreom was re-named ‘Chum-churum’ for euphonic reasons as well as for better understanding among the local consumers.
In the Southeast Asian region, Lotte Liquor played a leading role in the promotion of the local peoples’ awareness of the good quality of Koran liquor in cooperation with small- and medium-sized liquor companies in those countries in a win-win partnership, which also contributed to the improvement of the image of the small-medium companies of Korea and expanding the market for the Korean products.
Early this year, Lotte Liquor concluded an agreement with Seounsan Bokbunjaju Heungjin, a small-medium liquor company in Gochang of Jeollabuk-do Province, to export the company’s raspberry wine to the overseas market--with the result that Lotte Liquor started exporting the traditional Korean raspberry wine to various countries of Southeast Asia and Africa, including China, Australia and African countries.
The Seounsan Raspberry Wine has 16 degrees of alcohol and comes in a 375ml bottle and was used as the official dinner wine at major international events such as the 2000 ASEM Summit Meeting and the 2006 ILO Asia-Pacific Congress.
This is a win-win partnership designed to find the excellent product of the small-medium liquor companies and explore the possibilities of their export to overseas markets. Under the agreement of the two companies, Seounsan Bokbunjaju Heungjin produces the raspberry wine and Lotte Liquor provides the former with R&D support and performs overseas marketing.
The National Tax Service and other competent organizations have eased restrictions on the production and sale of traditional alcoholic beverages by the soju and beer companies to promote the production and sale of traditional Korean alcoholic beverage. This allows Lotte Liquor to sell the raspberry win in the domestic market.
However, Lotte Liquor decided not to distribute the raspberry wine in the domestic market but limited its sale to the overseas markets out of consideration for the small and medium distribution companies.
Lotte Liquor plans to export Cloud to the United States beginning its sales in Los Angeles in mid-October.
Initially, Lotte Liquor plans to some 20,000 bottles of Kloud Beer valued at 99 billion won. The US is considered the largest liquor market in the world.
Devaluation of the Japanese Yen by more than 10% is anticipated in 2015, but Lotte Liquor has set its overseas sales target at 94 billion won and to further expand its markets in Asia, Europe, America, Middle East and Africa.kGyeongwol Soju (?oon Reflected in the Mirror? used a Korean classic poet who sang the moon reciting some romantic phrases such as “Moon Reflected in the Sky,” “Moon Reflected in the Lake,” “Moon Reflected in Sea,” “Moon Reflected in the Glass of Soju”--and “Moon Reflected in the Apple of the Woman’s Eye.” This ultimately won the heart of Japanese consumers who had a penchant to sentimental poems.
In the backdrop is Gyeongpodae, literally ?irror Lake Pavilion?in Gangneung on the East Coast, where a classic poet recited ?oon Reflected in the Mirror?which became the name of Lotte Liquor? Gyeongwol ( 鏡月) Soju. See Chinese-character sign at the bottom left corner.