[단독] Jung Yong-jin to present Shinsegae’s first beer’Lets’… It seems to be aiming for synergy with the baseball team

Input 2021.03.04 10:40

Shinsegae L&B applied for a beer brand’Lets’ application
Jung Yong-jin’s ambitious work seems to be aiming for synergy with the Shinsegae Baseball Team
“It was made by an overseas brewery and is being reviewed for domestic distribution”
Minimize initial investment cost through overseas production method

Jeong Yong-jin, known as’Beer Lover’ Shinsegae (004170)The vice chairman challenges the beer business. It is interpreted to have a synergy effect with the recently acquired Shinsegae Baseball Team. Vice-Chairman Jeong opened the craft beer specialty store’Devils Door’ in 2014, but has not entered the beer manufacturing industry until now.

This is because the burden and investment risk of competing with existing companies such as Hite Jinro and Obi Beer were high, and opposition was raised that large corporations invaded the market of small craft beer makers when making craft beer.

This beer development business is led by Woo Chang-gyun, CEO of Shinsegae L&B and Jeju Soo-ju, who successfully led the launch of Lotte’s No. 1 beer’Cloud’.

According to the Korean Intellectual Property Office on the 4th, Shinsegae L&B applied for a trademark for a beer under the name’Lets Fresh Today’ last month. Considering that it usually takes 6-10 months to examine and register trademark rights, it is expected to acquire trademark rights and launch new beer within this year. An official at Shinsegae L&B said, “We are reviewing the business of distributing beer made at overseas beer factories (brewery) in Korea under the name’Let’s’.”

The company is expected to promote its business by producing and distributing beer through the OEM (OEM) method at overseas breweries. This is similar to how Shinsegae L&B delivered E-Mart’s own brand (PB) wine, DOS COPAS. Shinsegae L&B and E-Mart went to wineries around the world to find wines with good cost performance, and then brought them into Korea under the name of Dos Copas.

The domestic liquor market is dominated by Obi Beer, Hite Jinro, and Lotte Chilsung Beverage. It is difficult for new businesses to enter because consumers look for familiar products when choosing liquor. Shinsegae L&B acknowledges the limitations of the liquor market and seems to have minimized investment costs through consignment production rather than direct production, which requires a lot of initial cost.

A liquor industry official said, “With the revision of the Liquor Tax Act, the taxation system for beer has changed from the denominated tax to the pay-as-you-go tax, so even if it is produced at a low price abroad, there is little benefit when considering logistics costs. They will also be considering switching to domestic production.”

A synergy effect with the Shinsegae Baseball Team, which was ambitiously acquired by Vice Chairman Jeong Yong-jin, is also expected. This is because the company can promote its products and increase sales through’Beer Boy’, which sells beer while walking around convenience stores and spectators in the baseball field. The Busan Sajik Stadium, home of the Lotte Giants, also sells beer from Lotte Chilsung Beverage such as Cloud as its flagship product.

In the liquor industry, it is analyzed that Shinsegae has been in mind for the beer business since it recruited CEO Chang-gyun Woo, a beer expert. CEO Woo, who joined Doosan Group Dongyang Beer in December 1986, went through Obi Beer in 1998, Doosan Liquor in 2002, and Lotte Chilsung Beverage Liquor in 2009. In particular, in Lotte Liquor, he took charge of the Cloud Task Force (TF) and successfully led the launch of the Lotte Group’s first beer,’Cloud’.

E-mart (139480)Shinsegae L&B, a wholly-owned company, recorded 107.2 billion won in sales and 3.2 billion won in operating profit in 2019. It imports 755 kinds of wines such as Doscopas and 52 kinds of beers such as Belgian Martens and sells them in Korea.