Wine - South Korea

The Wine market in South Korea has experienced significant growth in recent years, driven by changing consumer preferences and an increasing interest in wine culture.

Customer preferences: South Korean consumers have traditionally favored traditional alcoholic beverages such as soju and beer. However, there has been a notable shift in consumer preferences towards wine, particularly among younger generations. This can be attributed to several factors, including a growing interest in Western culture, increased exposure to international travel, and a desire for more sophisticated and diverse drinking experiences. Additionally, wine is often perceived as a healthier alternative to other alcoholic beverages, which has further contributed to its popularity.

Trends in the market: One of the key trends in the South Korean wine market is the increasing demand for imported wines. South Korea has a relatively small domestic wine production industry, which has led to a heavy reliance on imports to meet consumer demand. This trend is expected to continue as consumers become more knowledgeable about different wine regions and varieties, and seek out new and unique options. Another trend in the market is the rise of online wine sales. E-commerce platforms have become increasingly popular in South Korea, offering consumers a convenient way to purchase wine from both domestic and international producers. This has allowed smaller, boutique wineries to reach a wider audience and compete with larger, more established brands.

Local special circumstances: South Korea has a unique drinking culture, which has influenced the development of the wine market. Drinking is often seen as a social activity, and wine is frequently consumed in social settings such as restaurants and bars. As a result, there is a strong emphasis on wine pairing and the overall dining experience. This has created opportunities for wine producers and retailers to collaborate with restaurants and offer specialized wine menus and events.

Underlying macroeconomic factors: Several macroeconomic factors have contributed to the growth of the wine market in South Korea. The country has experienced steady economic growth in recent years, which has led to an increase in disposable income and a higher standard of living. This has allowed consumers to allocate more of their budget towards leisure activities, including dining out and purchasing premium products such as wine. Furthermore, South Korea has a growing middle class and an aging population, both of which are driving demand for wine. The middle class is becoming more affluent and sophisticated, seeking out new experiences and products. The aging population, on the other hand, is more health-conscious and willing to explore healthier alternatives to traditional alcoholic beverages. In conclusion, the Wine market in South Korea is developing due to changing consumer preferences, increasing interest in wine culture, and underlying macroeconomic factors such as economic growth and a growing middle class. The market is characterized by a shift towards imported wines, the rise of online sales, and a unique drinking culture that emphasizes wine pairing and the dining experience.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.