- Beverages are growing at 2.5% in South Korea, while alcoholic drinks are seeing a slight decline (-0.5%)
- 65% of Koreans now visit the on-premise every week, while per capita spending increased by 16% in 2024
- Food-led venues remain key, but after-work drinks are on the rise and attract 36% of on-premise users
- Spirits accounts for 78% of all beverages sold in the Korean on-premise, with whiskey/whisky the most ordered spirit (71%)
- No/low-alcohol opportunities are expanding – 45% of on-premise users visit the channel to “be healthier”
Exclusive – CGA by NIQ client solutions director Jaepil Sohn leverages insights from the recently launched On Premise Measurement for South Korea to offer an unparalleled perspective on the country’s on-premise landscape and pinpoint the most promising opportunities for businesses across trending drinks categories.
The South Korean market is one of the most dynamic in the Asia Pacific region, with strong potential for both local and international brands.
At the moment, however, the country finds itself in a delicate position, grappling with the ongoing effects of major disruptions to the global supply chain and significant shifts in consumer behaviour and purchasing patterns in the wake of the Covid-19 pandemic.
Inflation, along with international political and economic instability, has further strained the economy – a trend that has taken hold globally – creating an unpredictable market. With rising product prices driving monetary growth, a recession is now anticipated as inflation continues to deplete consumer disposable income.
Despite the broader economic challenges, the food and beverage sector in South Korea is showing resilience. NIQ’s Market Track data suggests beverages are growing at a rate of 2.5%, while alcoholic drinks are experiencing only a slight decline (-0.5%).
The on-premise channel is certainly playing a part in this landscape, remaining a crucial part of South Korean society. CGA by NIQ research shows that in the last three months, 86% of consumers have visited on-premise venues, and 65% do so weekly. While overall visits have declined compared with previous years, per capita spending increased in 2024 by 16%.
This suggests that consumers are prioritising quality experiences, aiming to make the most of their reduced disposable income when dining or drinking out. They like to visit the on-premise not in spite of these challenging times, but precisely because of them. They value the channel as a space for meaningful connections with family, friends and colleagues.
For businesses, this presents a unique opportunity to create experiences that consumers appreciate and seek out, helping to build brand equity even in challenging times.
The opportunities
The first step for brand owners aiming to strengthen the position of their brands in South Korea’s dynamic on-premise market is to examine specific channels. Venues offering Korean food are some of the most popular, with 53% of on-premise users visiting them. Similarly, classic pork belly houses attract about half of the users. Other popular establishments include those serving lunch, HOF bars, casual spots that offer drinks and snacks, as well as raw fish and Japanese restaurants.
These food-led venues all represent key areas for beverage companies to target in this competitive market. Indeed, while eating out occasions have seen a slight decline, eateries remain incredibly important in South Korea, with more than a third of all on-premise users visiting venues for dinner and casual dining.
That said, CGA by NIQ’s data also shows appealing opportunities in more wet-led establishments. Since last year, after-work drinks have increased by ten percentage points (pp), with the occasion now attracting 36% of on-premise visitors. Brands, suppliers and operators can capitalise on this trend by focusing on products that align with the informality of this setting.
Relaxed and quiet drinking occasions have also grown by 2pp and now appeal to a significant 28% of all users. Once again, the opportunity for brands here lies in their informality, but also in their potential for fostering shareability and social connection.
High spirits
While spirits represents less than half of all beverages sold, the category plays a key role in the Korean on-premise, accounting for a staggering 78% of total value. Overall, the category is experiencing a slight decline: spirits volumes have decreased by 9.2% year on year, and value has dropped too (-5.5%).
The downward trend is evident across most sub-categories, including whiskey/whisky, vodka, gin and tequila. Rum, which only accounts for 3% of Korea’s spirits market, has been the hardest hit, with declines of 18% in volume and 16.4% in value.
The decline has also affected the country’s national drink, soju. Consumed by over half of all on-premise visitors, soju has seen a 6% drop in volume and a 5.2% decline in value.
Downward trends, however, do not mean that suppliers should abandon these categories, especially if they still represent a significant share of the market.
Whiskey/whisky, for example, accounts for a dominant 71% of all spirits sold in Korea’s on-premise and is associated with several positive attributes for consumers. For 37% of consumers, the segment helps “set the tone” for an occasion, 34% drink it to “savour the experience”, while nearly a quarter imbibe whiskey/whisky to “take a break” or even to “energise”.
Scotch remains by far the largest whiskey/whisky subcategory in Korea, accounting for nearly 80% of all bottles sold; American whiskey comes second (11.3%). Interestingly, this is the only subcategory to have seen a mild increase in recent years, with a nearly 1pp rise between 2023 and 2024.
Given whiskey/whisky’s slight dip in the past year, brands and their owners should focus on identifying the channels where there is still significant potential for this category.
Around 50% of whiskey/whisky is consumed in venues that offer Korean food, for example, so these should remain a top priority. Pubs and bars represent great opportunities too, accounting for 10% and 17% of the segment’s consumption, respectively. CGA by NIQ research also indicates that consumption in bars has increased by 1pp over the past year, further underscoring the segment’s growth potential in this channel.
As far as broader spirits groups are concerned, brandy and cognac are the only segments to have seen positive growth, with a 4.5% increase in volume and an impressive 7% growth in value. This suggests that while overall consumption levels may be decreasing, consumers are still willing to splurge on special occasions.
In Korea, brandy and cognac account for only 1.5% of the spirits market – less than the global average – indicating significant growth potential, so this is a subcategory that brands should monitor closely.
Korean wellness
At the other end of the strength scale, opportunities for no/low-alcohol options are expanding in South Korea. The country’s consumers are becoming more health-conscious, showing a growing interest in low-calorie, low-fat beverages made with locally sourced, health-focused ingredients.
These trends have gained significant momentum post-Covid and the ‘quality and better-for-you’ mindset appears to now be the primary driver for beverage and alcohol buyers.
To capitalise on this opportunity, brands need to focus on the nuances of this consumer trend, understanding not just what drives purchasing decisions, but also what motivates people to visit the on-premise in the first place. Combining these two factors is the most effective strategy for maximising revenue growth.
The no- and low-alcohol subcategories should not be viewed as necessarily catering to the same consumer base, drinking occasion or venue. Low-alcohol spirits, for instance, have largely extended post-Covid at-home drinking habits, being primarily consumed alone or during weekend meals. In contrast, zero-ABV products are carving out entirely new occasions for alcohol alternatives, such as lunch breaks.
It is also important that brands understand how Korean consumers perceive wellness, which increasingly encompasses not only physical health, but also mental wellbeing, emotional satisfaction and enjoyment.
In fact, 45% of on-premise users state that they visit the channel to “be healthier”. This finding should be interpreted as a search for both mental wellbeing as well as for physical health, with 32% of Korean drinkers planning to opt for healthier choices and 27% intending to abstain from alcohol during their on-premise visits this year.
This mindful consumer base is already significant: 11% of Koreans currently consume no/low-alcohol options in the on-premise. They also demonstrate strong spending power, with nearly a third willing to pay a premium for products that offer “health-related benefits”.
South Korea’s on-premise sector offers significant opportunities across several growing categories, notably no/low-alcohol, whiskey/whisky, brandy and cognac. By tapping into these trending segments, brand owners can grow their sales by expanding drinking occasions across different settings, from social gatherings to personal leisure, and from work-related occasions to entertainment.
CGA by NIQ’s On Premise Measurement (OMP) service provides deep insights into alcohol sales within the dining and drinking channels across South Korea. OPM covers Korea’s 17 administrative divisions, enabling businesses to address key questions related to category, channel and occasion, and to optimise their sales and marketing strategies.
To explore how OPM can enhance your strategies or to learn more about CGA’s other solutions for brands, operators and suppliers, visit www.cgastrategy.com or contact Jaepil Sohn, client director, South Korea.
