South Korea: Spending on alcoholic drinks expected to grow by 8.3% this year
Spending on alcoholic drinks in South Korea is expected to grow by 8.3% in 2021, after rising by 2.3% in 2020, The Dinks Business reported on July 12.
Alcohol spending in South Korea is expected to jump by KRW0.5 billion (US$1.4 bln) from 2020 to 2021
The statistics comes from a new report from data and research firm Fitch Solutions, which credited the rise in alcohol spending to an increase in off-trade sales as consumers drank more at home because of the pandemic.
Between 2020 and 2021, Fitch Solutions expects alcohol spending to jump by KRW0.5 billion (US$1.4 bln), from KRW6.4 trillion (US$5.4 bln) in 2020 to KRW6.9 trn (US$6.8 bln) in 2021.
Between 2022 and 2025, Fitch Solutions expects a deceleration in off-trade sales growth, with the anticipation of Covid-19 restrictions being removed. During this period, alcohol spending is predicted to grow by an annual average of 4.3% year on year, returning to ‘lowered but stable growth’ as hospitality opens up again.
By 2025, spirits consumption is expected to account for 44.1% of South Korea’s total alcohol consumed in the year. Beer is forecast to retain a higher stake of total alcohol consumption at 53.7%, making it the most consumed alcoholic beverage in South Korea.
Meanwhile, wine consumption from 2021 to 2025 will see an annual average increase of 3%, outpacing beer and spirits consumption of 1% and 1.2% respectively during the four years, but from a much lower consumption base.
The report also noted that consumption of Japanese beer plummeted by 85.7% in 2020, following the boycott of Japanese products by South Korean consumers in protest of Japan’s export restrictions on some key industrial materials to South Korea.
Meanwhile, fruit wine imports increased by 30.4% in 2020, surging during special occasions such as Christmas, and owed to younger South Korean consumers ‘drinking alcohol alone at home’ while the on-trade was shut.
Earlier this year, Fitch Solutions released a report on the alcohol sector in Singapore expecting to bounce back from the pandemic this year, with consumption predicted to grow by 4.8%.
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