Lotte Chilsung Beverage’s ambitious “4th generation beer,” Krush, also known as “Karina Beer,” is facing challenges in South Korea’s competitive domestic market. Industry watchers see this as another hurdle for Lotte Chilsung’s beer business, which has struggled for years.
OB Beer and Hite Jinro largely dominate the Korean beer market. Lotte Chilsung Beverage has consistently tried to become the third-largest player by launching new beers, but it hasn’t been easy.
Figures for the first quarter of this year show Lotte Chilsung’s beer performance remains sluggish. Krush, which debuted in November 2023, hasn’t managed to significantly boost the company’s market share, a pattern seen with its previous new products.
According to Nielsen Korea, Cass Fresh from OB Beer held a dominant 50% share of the home beer market in Q1. Hite Jinro’s Terra came in second. OB Beer’s Cass Light took third with 4.9%, marking the first time a light beer has reached such a high sales rank. Meanwhile, Lotte Chilsung Beverage’s Krush reportedly holds less than 5% of the market share.
Krush, fronted by Karina, was initially designed for the ‘entertainment market,’ focusing on a crisp, smooth taste. Its iceberg-themed bottle aimed to attract consumers.
To boost Krush’s market share, Lotte Chilsung Beverage decided to discontinue its ‘Kloud Draft’ beer. This move was meant to prevent the two products from competing with each other, given their similar concepts.
This strategy of replacing older beers with new ones isn’t new for the beverage brand. Since entering the market with ‘Cloud’ in 2014, they have launched ‘Fitz Superclear’ (2017), ‘Kloud Saint Draft’ (2020), and now ‘Krush’ (2023). ‘Kloud Saint Draft’ was discontinued for Krush, just as ‘Fitz Superclear’ was for ‘Kloud Saint Draft.’
Despite being promoted as a “4th generation beer” with Karina, a top “4th generation idol,” Lotte Chilsung Beverage’s overall liquor division sales in Q1 reached 192.9 billion won, a 10.2% drop from last year.
A brand official stated, “We view the first-quarter performance as a temporary decline in sales due to the discontinuation of ‘Kloud S Draft’ last year.”
They further explained, “Due to various factors, including the recent internal and external uncertainties leading to consumer sentiment contraction, Krush is still showing an insufficient market share. However, we plan to work towards stably settling into the liquor market through a mid-to-long-term perspective.”
Also, with light beers now ranking high, a “healthy pleasure” trend is growing in the liquor market. It is potentially further worsening Lotte Chilsung’s beer competitiveness, especially since their ‘Kloud Calorie Light’ was also discontinued last year.
Some analysts are questioning whether Lotte Chilsung’s consistent strategy of discontinuing older products to push new ones might actually be hurting its overall brand strength.
