Lotte Chilsung Explained

Lotte Chilsung Beverage Co., Ltd.
Native Name:롯데칠성음료 주식회사
Native Name Lang:ko
Type:Public
Founded: (original)
(current form)
Parent:Lotte Corporation
Hq Location City:Seoul
Hq Location Country:South Korea
Key People:Yun gie Park

Lotte Chilsung Beverage Co., Ltd. is a drink manufacturer in South Korea affiliated with Lotte Corporation. The company's name, Chilsung, signifies "Big Dipper" or seven stars, and its logo displays seven stars aligned in a row.[1]

History

Chilsung was founded in May 1950, then known as the Dongbang Beverage Company, and began with the launch of Chilsung Cider, a lemon-lime soft drink.[2]

In 1967, they became Hanmi Foods Industry Co., then changing to Chilsung Hanmi Foods Corporation in 1973, eventually becoming the Chilsung Beverage Company.[3]

By 2009, Chilsung products accounted for 36.7% of the Korean beverage market, compared to Coca Cola's 17.6%.[4]

Products

Chilsung Cider

By the end of 2013, Lotte had sold over 18.5 billion bottles of Chilsung Cider. In December 2019, they had to retire the iconic green bottle due to new government regulation about PET plastic.[5] The bottles are now clear.

Cola

American military presence as a result of the Korean War in the 1950s led to carbonated beverages appearing in South Korea for the first time. Chilsung released their own version of Cola in 1961, prior to Coca-Cola's official entry into the Korean market. It was first named Speci Cola, but then changed to Chilsung Cola to match its sister product Chilsung Cider, but this has since been discontinued.[6]

Nowadays, Lotte Chilsung does not produce their own cola but instead bottles & distributes Pepsi Cola across Korea.[7] [8]

Milkis

See Milkis.

Juices

Lotte Chilsung Beverage currently produces a range of natural fruit juices in orange, grape, apple, tangerine, pear, and mango flavors. In 1982, the company established a partnership with US-based, Del Monte, and now manufactures the Premium Orange and Del Monte Cold products. In 2009, the license for Tropicana was acquired and Tropicana Homemade style blends and other popular choices were produced.

Coffee and tea

The lineup in coffee include Let's Be, South Korea's No. 1 canned coffee; Cantata, a coffee blend made with Arabica beans from plantations worldwide; and black tea drinks Ceylon Tea and Lipton.

Other beverages/bottled water

Other beverages range from soy milks to traditional beverage and health drinks. Other varieties in the catalog include the sports drink Gatorade, the carbonated water Trevi, the purified water Icis, and France-imported Evian and Volvic.[9]

Alcoholic drinks

Lotte Chilsung Beverage has been marketing Scotch Blue, Korea's local whiskey brand, along with fruit liquor, traditional Mirin, and other alcoholic beverages. Other alcoholic drinks include soju, cheongju Baekhwasubok, plum liquor Seoljungmae Plus, and South Korean wine Majuang.[10]

Their soju brand Chum-Churum is the world's first soju made from alkaline-reduced water. In 2021, the spirit brand recorded sales worth in 37 countries.

Expansion Abroad

In 1966, Lotte Chilsung began exporting its Chilsung Cider to Vietnam. In 1989, Lotte Chilsung acquired a JAS mark. In the late 1990s, the manufacturer grew to be the largest beverage company in Asia, holding 35% of the domestic market share. Lotte Chilsung continued to grow signing a contract with Gatorade in 2001.[11]

By the end of 2024, a Lotte spokesperson claimed overseas sales will make up more than 30% of Chilsung Beverage's total revenue.[12]

US

In 2017, Lotte sought to expand their presence in the US beverage market, promoting Cider, Milkis and energy drink Hot6.[13] They first began exporting their flavoured soju brand Cheom-cheoreum Soonhari to the US in 2019.[14]

China

In 2016, the South Korean government chose Lotte Skyhill Country Club as the site to install a new advanced anti-missile system, THAAD.[15] This led to a sharp rise in anti-Korean sentiment in China, with much of the frustration targeted at Lotte.[16] There were widespread boycotts and protests, with employees of a mall in Xuchang protesting Lotte as they sung the Chinese national anthem.[17]

As a result, Lotte's Chinese business operations suffered greatly, with four out of six of Lotte Confectionery and Lotte Chilsung Beverage’s factories in Beijing, Qingdao, Henan and Qingbai shutting down in Q1 2019.[18] All of Chilsung Beverage & Lotte Confectionary's Chinese operations had ceased by 2019.[19]

Despite this difficult diplomatic backdrop, Lotte Chilsung was still able to sell beverages into Chinese markets. In 2021, Chilsung sold more than 25 million cans of Milkis to Chinese markets, with Taiwan's consumption increasing 1100% in just a year.[20] Between January and August 2022, they had exported over 10 million cans of Milkis to Taiwan.[21]

The Philippines

Chilsung Beverage first entered the Filipino market in 2010 by purchasing a 34.4% stake in Pepsi Cola Products Philippines (PCPPI). In 2020, Chilsung paid to increase their stake to 72.9%.[22] They completed their acquisition of the country's 2nd largest beverage producer in October 2023.[23]

Use of Celebrities

As a Korean brand, Lotte Chilsung has incorporated many famous Korean entertainers into their advertising.

Singer Lee Hyori represented their soju brand Chum-Churum between 2007 and 2012.[24] Then, a marketing campaign with the idol nicknamed the "nation's first love", Bae Suzy, ran from 2016 to 2018.[25] BLACKPINK's Jennie led the brand from 2021 to 2023, with actress Han So-hee becoming their latest representative.[26]

For one soju campaign with BLACKPINK's Jennie, Chum-Churum released a special promotional gift box which included Jennie photo cards, a Jennie mini cutout, a Jennie soju glass and a Soonhari Bluetooth microphone.[27]

In 2014, Korean BBQ restaurant owner, Ham Sun-bok, went viral for making 'so-maek', a cocktail of beer and soju. Lotte made her a brand representative for Chum-Churum, reportedly signing a contract for more than .[28]

In 2017, Chilsung Cider released an advertisement with actor Park Seo-joon and LABOUM singer Solbin.[29] In 2023, actor Jung Hae-in became the face of Chilsung Cider.[30]

In 2024, Lotte Chilsung Beverage's "Saero" is launching new animation content for their new product "Saero Apricot". Actors Park Ji-hoon and Kim Hye-yoon were selected as the endorsers and participated in dubbing the animation for the advertisment campaign.[31] [32]

Controversies

2009 Price Fixing

The Fair Trade Commission (FTC) fined Chilsung along with four other beverage producers for colluding to raise the prices of their products. The FTC reported that the companies co-ordinated price hikes four times between February 2008 and February 2009. Chilsung was fined .[33]

Just a few months later, Chilsung Beverage, in conjunction with three other companies, was found to have been forcing retailers to not lower the price of their products, receiving the largest fine of .[34]

2015 Power Struggle

As Lotte founder Shin Kyuk-ho's health was deteriorating, his sons vied for control of the conglomerate.[35] The fraternal feud hit a peak in 2015 when eldest son Dong-joo was removed from his position as Vice President of Lotte Holdings and his younger brother Shin Dong-bin assumed control.[36] News of the leadership struggle created doubts about Lotte's future, and Lotte Chilsung Beverage's market value dropped 6.85% in August.[37]

2016 Embezzlement Scandal

In 2016, amidst a police probe into embezzelment, Lotte Group companies lost a combined market value of in just four days, with Lotte Chilsung's shares falling by 3.93% in a single day.[38]

2018 Bribery Scandal

In February 2018, Chairman Shin Dong-bin was convicted on charges of bribery as part of the 2016 South Korean political scandal and sentenced to 2.5 years' incarceration.[39] After serving for 234 days, an appeals court released him from prison, and he went back to his duties as Chairman shortly after.[40] When news of his release broke, Lotte Group's market value was boosted by 4.2%.[41]

Accounting Fraud

In 2018, Chilsung Beverage was fined by the Securities & Futures Commission of Financial Services for underreporting the losses of an affiliate. It was found that the drinks company masked net losses of, reporting them as just .[42]

Antitrust Violations

In 2021, Lotte Chilsung was fined almost by the Korean Fair Trade Commission for violating antitrust regulations.[43]

See also

Notes and References

  1. News: Cho . Hyee-su . May 19, 2019 . [Behind the Brand: 1] Lotte inspired by a Goethe heroine; Naver helps us navigate ]. .
  2. Web site: LOTTE Chilsung Beverage Co Ltd . 2023-08-31 . lottechilsung.tradekorea.com.
  3. Web site: Lee . Seung-ah . 23 December 2014 . Iconic soft drink for 64 years: Chilsung Cider . 2024-01-20 . . en.
  4. Web site: Kim . Hyun-cheol . 2009-11-03 . 4 Beverage Makers Fined for Price Fixing . 2024-01-20 . . en.
  5. Web site: Jin . Min-ji . 2019-12-23 . Lotte says fizz will live after green bottle retired . 2024-01-20 . . en.
  6. Web site: Choi . Hyun-joo . 2016-08-16 . Domestic brands attempt to battle Coke, Pepsi in cola war . 2024-01-20 . . en.
  7. Web site: Na-young . Kim . 2023-07-14 . Food industry scrambling to deal with WHO's classification of aspartame as possible cancer cause . 2024-01-20 . . en.
  8. Web site: CHOI SUN-EUL, SOHN DONG-JOO . 2023-07-03 . Aspartame scandal freaks out Korea's zero sugar industry . 2024-01-20 . . en.
  9. Web site: 2009-06-21 . volvic - company info - about us . bot: unknown . https://web.archive.org/web/20090621072903/http://volvic-na.com/companyinfo/aboutus.html . 2009-06-21 . 2023-02-06.
  10. Web site: The first Korean wine, Majuang . 2023-02-06 . . en.
  11. Web site: History . 2023-09-02 . Lotte Chilsung Beverage . ko.
  12. Web site: Ahn Byung-joon and Minu Kim . 5 October 2023 . Lotte Chilsung completes acquisition of Pepsi Philippines . 2024-01-20 . Pulse News . en.
  13. Web site: Jin . Eun-soo . 2017-02-09 . Lotte looks to U.S. to boost sales of 3 drinks . 2024-01-20 . . en.
  14. News: 3 August 2022 . Leading Korean beverage company to increase market penetration in Philippines . 20 January 2024 . Philstar Global.
  15. Web site: Park . Byeong-su . 2016-10-01 . Why was the Lotte Skyhill golf course chosen as the new site for THAAD deployment? . 2024-01-19 . Hanyoreh . en.
  16. News: 2019-03-13 . South Korea's Lotte seeks to exit China after investing $9.6 billion, as Thaad fallout ensues . 2024-01-19 . The Straits Times . en . 0585-3923.
  17. News: Hernández . Javier C. . Guo . Owen . Mcmorrow . Ryan . 2017-03-09 . South Korean Stores Feel China’s Wrath as U.S. Missile System Is Deployed . 2024-01-19 . . en-US . 0362-4331.
  18. Web site: Reyes . Jean . 13 March 2019 . Lotte Group to sell food production sites in China . 2024-01-19 . S&P Global . en-us.
  19. Web site: Kim . Jae-heun . 2022-05-23 . Lotte to pull out of China, focus on Southeast Asia . 2024-01-19 . . en.
  20. Web site: Kim . Min-jee . 2022-01-10 . Lotte Chilsung exports 25 million cans of 'Milkis' to China last year . 2024-01-19 . . ko.
  21. Web site: Moon-hee . Choi . 2022-09-20 . Lotte Chilsung Beverage Exports 10mn Cans of Milkis to Taiwan in 2022 . 2024-01-19 . Businesskorea . ko.
  22. Web site: Kim . Hyo-jin . 11 September 2020 . Lotte Chilsung Beverage wins back control over Pepsi Philippines, Lotte Liquor Japan - Pulse by Maeil Business News Korea . 2024-01-20 . Pulse News . en.
  23. Web site: Seo . Ji-eun . 2023-10-04 . Lotte Chilsung acquires Pepsi Philippines, eyes expansion in the region . 2024-01-20 . . en.
  24. Web site: Lee Hyori, No Longer The Face Of Soju . 2024-01-20 . world.kbs.co.kr . en.
  25. Web site: Toh . Jamielynne . 2021-04-23 . Will Blackpink’s Jennie dethrone Bae Suzy as Korea’s ‘CF queen’? . 2024-01-20 . South China Morning Post . en.
  26. Web site: Soju brand Chum Churum remove Jennie from Blackpink as model . 2024-01-20 . The News International (Pakistan) . en.
  27. Web site: Moon-hee . Choi . 2022-10-04 . Lotte Chilsung Beverage to Promote Sunhari in Overseas Countries . 2024-01-20 . Business Korea . en.
  28. Web site: Ko . Dong-hwan . 2014-03-31 . YouTube celebrity 'boilermaker' signs liquor ad deal with Lotte . 2024-01-20 . . en.
  29. Web site: ≪식약일보≫ 박서준·솔빈모델 "칠성사이다" 신규광고 선보여 . 2024-01-20 . 식약일보.
  30. Web site: 2023-04-12 . 롯데칠성음료, '칠성사이다' 새로운 얼굴로 정해인 선정 . 2024-01-20 . 뉴스락 . ko.
  31. Web site: ‘구미호’ 박지훈X‘인간’ 김혜윤, ‘새로 살구’ 세계관서 만났다. 'Gumiho' Park Ji-hoon X 'Human' Kim Hye-yoon, met in the world of 'New Apricot'. April 23, 2024. July 24, 2024. Jeong Ga-yeong. World Biz & Sports World. Naver. ko. https://web.archive.org/web/20240724035704/https://m.segyebiz.com/newsView/20240423504646. July 24, 2024. live.
  32. Web site: 김혜윤, '3살 연하' 박지훈과 새로운 호흡…주류 애니메이션 광고 주인공 발탁. Kim Hye-yoon teams up with Park Ji-hoon, who is three years younger, as they are chosen as the main characters for a new beverage animation advertisement. April 23, 2024. July 24, 2024. Lee So-jeong. Ten Asia. Naver. ko. https://web.archive.org/web/20240604095453/https://m.entertain.naver.com/article/312/0000659222. June 4, 2024. live.
  33. Web site: 2009-08-16 . Lotte Chilsung Fined for Collusion . 2024-01-20 . . en.
  34. Web site: Kim . Hyun-cheol . 2009-11-03 . 4 Beverage Makers Fined for Price Fixing . 2024-01-20 . . en.
  35. Web site: Kim . Hyun-bin . 2021-01-21 . Lotte still stays in bad shape . 2024-01-18 . . en.
  36. Web site: Son . Jiyeong . 2015-10-08 . Disgraced Lotte heir reignites family feud . 2024-01-18 . . en.
  37. Web site: 2015-08-03 . (2nd LD) Lotte heir vows all-out efforts to end family feud . 2024-01-18 . . en.
  38. Web site: Choi . He-suk . 2016-06-14 . [LOTTE CRISIS] Lotte firms’ market cap lose another 400 billion won ]. 2024-01-18 . . en.
  39. News: Ju-min Park & Christine Kim . 17 April 2017 . South Korea charges ousted leader Park and Lotte chief with bribery . 18 January 2024 . Reuters.
  40. Web site: Kim . Sohee . 5 October 2018 . Lotte Chairman Shin Freed as Court Suspends Corruption Sentence . 2024-01-18 . Bloomberg.
  41. News: Yang . Heekyong . 17 October 2019 . Lotte Group chairman stays out of jail as South Korea court ruling upheld . 18 January 2024 . Reuters.
  42. Web site: Jin Young-tae and Kim Hyo-jin . 6 September 2018 . Daeho AL and three Korean firms accused of accounting fraud - Pulse by Maeil Business News Korea . 2024-01-20 . Pulse News . en.
  43. Web site: Soo-yeon . Kim . 2021-04-06 . Lotte Chilsung fined 1 bln won over unfair practice . 2023-09-02 . . en.