HiteJinro is expanding its portfolio beyond its core soju and beer under the Jang In-seop (장인섭) leadership, moving into flavored soju and non-alcohol products. HiteJinro appointed Vice President Jang as its new CEO at the end of last year, changing the top post for the first time in 14 years.

At the end of last month, HiteJinro launched "Ddujjongku Hyang Aisul". It reflects the Ddujjongku (Dubai chewy cookie) trend in its fruit-flavored soju "Aisul" series.

It also applied for the "Terra Zero" trademark. As the designated categories include non-alcohol beer and non-alcoholic beverages, speculation is emerging that HiteJinro is considering extending its Terra beer brand into non-alcohol products.

It also refreshed the soju "Jinro", known as the "blue bottle". Jinro has sold about 2.5 billion bottles since its 2019 launch and lowered its alcohol content to 15.7 degrees from 16 degrees to reflect the low-alcohol trend. The change marks the first refresh in 3 years, since 2023.

HiteJinro's moves are seen as targeting both consumer trends and the non-alcohol market, even within a business structure centered on soju and beer.

Soju-centered stable growth, 고민 in an era of drinking less

This ties to recent structural change in the liquor market. In the global liquor market, "sober life (enjoying rather than getting drunk)" is rising, led by the MZ generation, with low-alcohol and non-alcohol products becoming alternatives to the existing drinking culture.

According to the industry, the global non-alcohol beverage market has posted a high average annual growth rate of about 23 percent over the past 5 to 6 years. Major liquor companies are therefore strengthening strategies to expand low-alcohol products or broaden into the non-alcohol beverage market. South Korea is on a similar track, and HiteJinro has also expanded its lineup with non-alcohol beer and low-alcohol products.

Looking only at HiteJinro's performance, it is not easy to see an immediate crisis. The company is maintaining stable sales centered on soju.

According to the Financial Supervisory Service's electronic disclosure system, HiteJinro posted consolidated sales of 2.5 trillion won and operating profit of 172.1 billion won last year. That was negative growth, down 3.9 percent and 17.3 percent, respectively, from a year earlier. Even so, HiteJinro has steadily expanded its top line.

HiteJinro's annual sales were 2.26 trillion won in 2020, 2.2 trillion won in 2021, 2.5 trillion won in 2022, 2.52 trillion won in 2023 and 2.6 trillion won in 2024, continuing to grow in scale. Operating profit was 198.5 billion won in 2020, 174.1 billion won in 2021, 190.6 billion won in 2022, 123.9 billion won in 2023 and 208.1 billion won in 2024.

Even so, the steady expansion of business strategy reflects a response to long-term changes in the market environment. The domestic liquor market is seen as having limits for growth focused on domestic demand amid a mood of stagnation such as declining drinking. Expanding overseas markets and opening up new drinking markets have emerged as tasks.

Declaration of a global comprehensive liquor company, Jang seeks change under his CEO system

In fact, in June 2024 HiteJinro presented "a global comprehensive liquor company" as its new corporate vision. The plan, marking its 100th anniversary, includes the globalisation and popularisation of Jinro soju by 2030. The keywords in the new vision are global, comprehensive liquor and Jinro.

HiteJinro has the highest dependence on soju for sales. According to HiteJinro's business report, of total 2024 sales of 2.6 trillion won, soju sales were 1.55 trillion won, meaning 59.6 percent of total sales came from soju. Beer, at 823.6 billion won, accounted for 31.7 percent, followed by bottled water at 153.1 billion won, or 5.9 percent, and other segments at 74.5 billion won, or 2.9 percent.

Soju's dependence on the domestic market is even higher. Last year, 95.2 percent of HiteJinro's soju sales were domestic, while global markets contributed 65.0 billion won, or about 4.8 percent. When it announced its global vision, the company set a target for overseas soju sales of 500.0 billion won.

The pillars of the company's overseas strategy are strengthening products, expanding distribution and expanding communication. In that context, the popularisation of Jinro is seen as including not only greater exports of soju but also an expanded lineup that reflects trends such as fruit flavours and sugar-free products.

The Jang leadership is also interpreted as the execution phase of that strategy. Jang drew attention beyond the meaning of a new CEO, as the CEO change was the first in 14 years. It is seen as the start of structural change at HiteJinro reflecting an environment of growth stagnation.

Former CEO Kim In-kyu (김인규), who led HiteJinro for 14 years, established a two-track portfolio of soju and beer at the company formed through the 2011 merger of HiteJinro and Jinro Soju. He produced results in areas including sparkling liquor, fruit-flavoured soju and pioneering the non-alcohol market. Kim worked across sales, marketing and planning.

By contrast, Jang worked at HiteJinro across the management strategy office and other functions, including the strategy planning team and the ethics audit team, as well as the legal team, external cooperation team, logistics team and overseeing the communications team. Jang is assessed as having strengths in setting strategy, design and planning, and is seen as the right person to lead HiteJinro after its growth phase.

Under Jang, HiteJinro is expected to internally focus on system maintenance such as organisational reshuffles and operational efficiency, and rework its financial structure. Externally, it is expected to consider ways to grow in overseas markets based on soju. It also has a role in making existing strategies more concrete and strengthening execution.

Against that backdrop, whether HiteJinro's strategy to become a global comprehensive liquor company can translate into actual growth is cited as a key task under Jang.