Hanwha, Doosan launch wine biz to compete with Shinsegae, Lotte

The Korea Times

The Korea Times

Business

Mon, October 2, 2023 | 01:10

Companies

Hanwha, Doosan launch wine biz to compete with Shinsegae, Lotte

Posted : 2022-12-27 08:20

Updated : 2022-12-27 08:20

People look around a wine store in Emart, Seoul, on June 3. Newsis

By Kim Jae-heun

Hanwha and Doosan have recently launched their own wine businesses to compete with local retail giants.

Doosan opened a large-scale wine bar called Tap Shop Bar at its Doota Mall in Dongdaemun, central Seoul, on Dec. 16. Customers can try various wines at the store and buy bottles of wine.

Doosan said it wants to ride on the popularity of the wine-consuming trend among young consumers by opening the shop to revive its shopping mall, which has suffered a long slump due to the COVID-19 pandemic.

Hanwha Group's chemical unit, Hanwha Solutions, spent $34 million (43.3 billion won) to acquire Seven Stones winery in Napa Valley, California, the largest wine producer in the United States, in early December.

Napa Valley produces 0.4 percent of the world's wines and 4 percent of California wines.

The company said it purchased the wine brand with the aim of strengthening the competitiveness of its resort business, part of Hanwha Solution Insight.

It is not the first time that a domestic firm has purchased a winery in Napa Valley.

In the case of Shinsegae, the company bought Napa Valley's Shafer Vineyards in February last year with its real estate developer, Shinsegae Property. Shafer Vineyards is 2 million square meters in size, which is 11 times larger than Seven Stones. Shinsegae invested nearly 299.6 billion won in the project.

The retail giant acquired Shafer Vineyards to beef up its liquor and beverage business. The company plans to use the vineyard to import large quantities of premium North American wines and sell them exclusively at their shops. Shinsegae operates the special wine and liquor store, Wine & More as well as the country's largest discount store chain, Emart, and convenience store brand Emart24.

Local retailers are taking over wineries to take advantage of the rapidly growing wine market here.

According to the Korea Customs Service, domestic wine imports amounted to $560 million last year. This figure is about 70 percent more than the previous year. Korea was once considered a "wine wasteland," but this year's import volume is expected to grow to nearly 1 trillion won.

Companies that have not purchased foreign wineries are also actively carrying out wine retail businesses.

Lotte Shopping opened a 1,322-square-meter special wine shop, Bottle Bunker, in Jamsil, Seoul, on Dec. 2021. The company plans to open two more stores in Gwangju Metropolitan City and Changwon, South Gyeongsang Province.

"The medium to low-priced wine market has already settled stably here and such businesses are visited by many young customers. Local retailers will continue to keep an eye on the market to follow the trend, which is led by millennials," a local retail firm official said.

jhkim@koreatimes.co.kr