By Kim Hyun-bin
Major retailers are eager to grow their wine businesses by purchasing overseas wineries, gaining price competitiveness and expanding overseas distribution networks, according to industry officials, Wednesday.
According to Euromonitor, the size of the domestic wine market is estimated to have grown by 50 percent compared to 2020 to 1.5 trillion won ($1.19 billion) in 2021, and to 2 trillion won last year.
Following Shinsegae Group's acquisition of a U.S. winery, Lotte is seeking to expand its winery business.
Lotte Chilsung Beverage announced with its fourth-quarter IR data that the company is considering acquiring domestic and foreign wineries this year. Lotte has the longest history of wine among local retail companies owning Majuang, a Korean wine brand with a 45-year history.
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| Lotte Group Chairman Shin Dong-bin |
"We are reviewing good properties at home and abroad, but it is impossible to know when they will be confirmed," a Lotte Group official said.
In 2016, Lotte Chairman Shin Dong-bin launched Majuang Signature Korea Premium made from 100 percent domestic grapes.
Lotte, which started to expand its wine business, opened a large wine shop, Bottle Bunker in Seoul in 2021. Last year it opened the second and third branches in Changwon and Gwangju, respectively.
If Lotte succeeds in acquiring a winery in the future, Lotte's wine business is expected to expand rapidly, as Lotte owns marts, department stores, duty-free shops, and five-star hotels not only in Korea but also abroad.
In the case of Shinsegae Group, it established Shinsegae L&B, a wine import and distribution company in 2008 and jumped into the wine business early, rising to the number one position in the domestic wine market. In 2021, Shinsegae took over Shaper Vineyard, an American winery.
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| Shinsegae Vice Chairman Chung Yong-jin |
Hanwha Group recently acquired Seven Stones, a winery in Napa Valley, California. Hanwha Solutions purchased Seven Stones Winery for $34 million through its U.S. subsidiary in the second half of last year.
Seven Stones is a winery consisting of an approximately 12,000 square meter organic vineyard, 1393 square meter winery, and 613 square meter residence on a total of 182,000 square meters.
"I understand that the wine business is also in progress. Hanwha will approach related businesses in a comprehensive manner, including the wine business," an industry official said.
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