How to grow no and low brands in South Korea’s On Premise

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CGA’s research has revealed the major potential of these categories, with well over a quarter (29%) of consumers planning to moderate their alcohol consumption this year. The latest Consumer Pulse report explores the room for sales in coffee shops, which have been visited by 95% of South Koreans in the last six months.  

However, while a quarter (25%) of consumers say they are likely to buy a no-alcohol drink here, twice as many people (51%) are unlikely to do so. Of these, a third (35%) don’t see these drinks as a good fit for coffee shops, and 29% say they don’t suit the time of day they visit. This indicates that the best opportunities for no and low alcohol drinks brands are to be found in other On Premise channels—but tailored strategies will be needed to succeed in them. 

While interest is currently quite low, coffee shops can persuade guests to try no and low alcohol drinks brands if they deliver compelling reasons. More than a quarter (27%) of consumers say they could be encouraged to try them to get new experiences, and nearly as many would be interested if their friends and family chose them (23%) or there were more innovative flavours to try (21%). Assurances about quality and brand trustworthiness can also influence purchasing decisions. 

CGA’s Consumer Pulse research delivers more insights into the no and low alcohol market—including that people are willing to pay an average of ₩3990 for a drink in this category. 

The report also reveals some positive trends in consumers’ general On Premise habits. Just over half (51%) of consumers said they had been out for a drink in April—three percentage points more than in March. With even more (53%) planning to drink out in the next month, spending is likely to increase further. 

Jaepil Sohn, CGA by NIQ’s client solutions director, South Korea, said: “It’s not easy to optimise channel strategies for no and low alcohol drinks brands in South Korea’s On Premise. Coffee shops can be a good fit, but they’re not yet delivering the sales that suppliers would like. Encouraging trial here requires a careful combination of three crucial factors: novelty, innovation in flavour, and endorsements from other drinkers.” 

 “However, it’s also clear that some of the best opportunities for no and low alcohol drinks are to be found in other segments like bars. They will be competing with a wide range of options here, so success will need tailored tactics that respond to consumers’ tastes and priorities. CGA’s OPUS research is the ideal starting point for effective strategies.” 

CGA’s OPUS service and Consumer Pulse reports provide expert analysis to enable beverage suppliers to develop no and low alcohol brands. The solutions profile consumers of these brands and identify the key channels, occasions and purchasing drivers, establishing the foundations of winning strategies.  

Click here to download the latest Consumer Pulse report for free. To learn more about CGA’s research solutions and how they support businesses in South Korea’s On Premise, contact Jaepil Sohn here.