Soju advertisements have always captured public attention by featuring celebrities that represent the times. Since soju is a national drink enjoyed by a wide range of age groups, the selection of advertising models is directly linked to brand image. Daesun Distilling, LOTTE Chilsung Beverage, and other nationwide brands have employed strategies that emphasize familiarity by choosing local celebrities or well-known figures.
Recently, Daesun Distilling, a leading liquor company in Busan, has launched an advertising campaign that stands apart from the usual approach. On the 9th, according to the industry, Daesun Distilling unveiled a poster prominently displaying the slogan 'Preventing regional decline, through Daesun.' While Daesun Distilling has previously used celebrities such as actress Han Ye-seul, cheerleader Park Gi-ryang, and the girl group Mamamoo, this time, it opted for a direct message warning about regional disappearance instead of using a celebrity. This has been assessed as a bold attempt that clearly reflects the desperate reality of the local soju industry.
Last year, Daesun Distilling's revenue was 51.9 billion won, and its operating profit was 2.4 billion won, representing declines of 7.8% and 57.1%, respectively, compared to the previous year. This follows several years of downturn since recording revenue of 81.2 billion won and an operating profit of 10.4 billion won in 2018.
The difficulties faced by local soju are not limited to Daesun Distilling. Hanla Mountain, established by merging six small soju companies in Jeju Island, reported revenue of 21.6 billion won last year, a decrease of 2.3% from the previous year. Its operating loss was 400 million won, larger than the previous year's loss of 300 million won.
Bohae Brewery in Jeollanam-do recorded revenue of 87.6 billion won and operating profit of 2.5 billion won last year. Although it returned to profitability, revenue dropped by 5.9% compared to the previous year. In the first quarter of this year, both revenue and operating profit were 20.5 billion won and 1 billion won, respectively, down by 7.2% and 9.1% from the same period last year.
Bohae Brewery is currently at a crossroads as its third-generation owner siblings have stepped down from management. The company stated that former CEO Lim Ji-seon and former director Lim Se-min left for personal reasons, but the industry views this as a desperate measure to escape poor performance.
According to the Korea Agro-Fisheries & Food Trade Corporation (aT), HiteJinro and LOTTE Chilsung Beverage together hold an 80% share of the domestic retail soju market. The remaining 10% or so of the market is shared among regional soju companies like Daesun Distilling, Bohae Brewery, Hanla Mountain, Muhak (Gyeongnam), Geumbokju (Daegu and Gyeongbuk), and Seonyang (Daejeon and Chungnam).
An industry insider noted, 'Local soju companies are increasingly losing their footing under the capital and distribution networks of nationwide brands, coupled with aggressive marketing.'
In fact, last year, the annual advertising expenses for HiteJinro and LOTTE Chilsung Beverage were 184 billion won and 126.5 billion won, respectively, exceeding the annual sales of local soju manufacturers. The industry analysis indicates that the sales power of large liquor companies has expanded into local areas, leading local soju to struggle.
An industry representative remarked, 'The investment capacity for local soju is limited, and Daesun Distilling's current advertisement seems to stem from the belief that focusing on large models in marketing would lead to a vicious cycle that worsens profitability.'
Moreover, the overall consumption of soju is declining, and the phenomenon of younger generations moving away from soju is accelerating. Major brands are not only operating pop-up stores but also launching various products in line with trends like low-alcohol and zero-sugar. In contrast, local soju companies lack the resources to invest in new product development or brand renewal to respond adequately. They are at a disadvantage in competing against the aggressive marketing of large corporations.
The outflow of regional populations is also one of the reasons making it difficult for local soju companies. According to the Census Bureau's '2024 domestic population mobility results,' Busan recorded a net outflow of 13,657 people last year, the highest in three years. The population outflow to the three metropolitan areas is the largest among the 14 non-metropolitan areas. This illustrates why Daesun Distilling could promote an advertisement with the slogan 'Preventing regional decline.'
An industry insider stated, 'It is time for local soju to find new touchpoints to connect with younger consumers. Simply improving product competitiveness has its limits. A differentiated strategy that strengthens local characteristics and storytelling is essential.' It remains to be seen whether local soju companies can find a new breakthrough to survive.