Bottled Water Market Growing Rapidly 

Ever since the bottled water business became legalized in 1995, the sale of bottled water in Korea has expanded rapidly.  The demand for bottled water is also likely to remain strong in the coming years as consumers are increasingly concerned about the quality of tab water supply and are seeking healthier alternatives to “sweetened” beverages.  In 2005, the sale of bottled water is expected at $320 million, up 6.5% from last year.  Industry experts add that the volume of business is likely to double in five years. 

Currently the market is led by about four local food companies, while a couple of European brands (Evian and Nestle) have successfully formed partnerships with local conglomerates.  However, imported products are mainly marketed in the premium segment of the market and comprise only about one percent of the total sales.  Despite the fact that no U.S. bottled water has been successfully launched into the Korean market yet, there will be niche opportunities for U.S. products in this growing market, as consumer demand becomes further diversified and products with different tastes and functionalities are desired.

More information about the non-alcoholic beverage market in Korea can be found in a FAS report, #KS5042.

Growth of Wine Imports Remains Strong

Overall wine imports continued showing robust growth through 2004 and the first half of 2005, 26.6 percent and 19.1 percent in value respectively, and is expected to set a new annual high in 2005, surpassing the former record of $58 million set in 2004.  The rapid growth of wine consumption is mainly fueled by an increased emphasis on a well-being lifestyle among the general public. 

U.S. wines are expected to remain one of the top choices of local wine drinkers, as they are firmly positioned in the market as products of good value and unique quality.  As consumers are becoming more familiar with wine and more discriminating in their tastes, the wine market is also becoming more diversified with imports of a wider variety of products.  Consumers are paying more attention to new-to-market wines and willingly purchasing products from more diverse origins in an effort to expand their experience and knowledge. 

U.S. wines primarily target the value-oriented segment of the market and the basic image (ripe fruit taste, good balanced flavor and vintage-free stable quality at good prices) is well accepted by local consumers.  In particular, entry-class products from the U.S., which retails for below 10,000 KRW a bottle, have built a firm ground in the market due to the aggressive marketing efforts of two major Californian suppliers, E&J Gallo and Constellation.  The “California label series” by Doosan Corporation, the leading local liquor import/distributor, co-packed by the Ironstone Vineyard in California, has also contributed significantly to the expansion of entry-class U.S. wines.

The premium segment of the market, products of above 50,000 KRW a bottle, is another area in which U.S. wines have shown steady success in Korea.  Many affluent local wine drinkers are well traveled and are well aware of world-renowned U.S. brands.  On the other hand, U.S. wines in the middle-priced segment between 10,000 up to 50,000 KRW a bottle are facing tougher competition from both old and new world competitors.

More information about the wine market in Korea can be found in a FAS report, #KS5038.