The whisky industry in 2021 was a year of both hope and anxiety, with a 32% increase in revenue compared to 2020, which recorded the lowest import volume since 1999 due to the COVID-19 pandemic. At the end of last year, in conversations with business leaders of whisky brands, we saw a desire to turn the "home drinking" trend boosted by the pandemic, centered around Generation Z consumers, into an opportunity to create lasting relationships between these consumers and whisky products. While these leaders were considering value propositions centered around whisky as a new taste, they lacked a clear direction. Ultimately, they began 2022 with brand activities featuring 30-something celebrities, a generation younger than their traditional models.

Of course, it's undeniable that the whisky industry has successfully used age as a key value proposition for generating revenue for a long time. After all, the time of aging was the core element of value differentiation. The problem is the concern about the response of this new target generation to the hierarchy inherent within. The distribution structure that whisky producers have built for optimal revenue generation is fundamentally based on sets of products that include entry-level whisky and a limited number of premium whiskies. And this product sales structure for value differentiation is transferred directly from wholesalers to liquor shops and then to the end-user consumer, and the inequality in securing premium whisky that occurs within this structure is an inevitable element that is experienced. This connects with the characteristics of late millennials and Generation Z, who are actively creating new order and silently avoiding the existing hierarchical structures, and can be a barrier to the sustainable relationship creation with whisky products that the industry is currently concerned about.

Even excluding this potential factor, the decline of the whisky market in Korea has been ongoing since before the pandemic. Traditionally, drinking sessions in Korea have been a key stage for verifying the hierarchy among each other within social relationships. The “entertainment culture” that developed in Korea as a result of government-led economic development in the 1960s and 1970s was an essential condition for business success in Korea, and this was closely linked to the growth of the entertainment culture, along with the growth of representative whisky product consumption in underground consumption places such as “room saloons." The corporate entertainment expenses were recognized as a more efficient means of increasing sales than advertising expenses, according to data released by the Korean Academy of Industrial Management in 2013. However, as the 2010s began, the government began to take serious measures against this culture of entertainment between government officials and businesses, which also became a factor in the decline of whisky sales. The Korean entertainment culture between companies, which also became the reason for Uber’s CEO being fired in 2017, is now gradually changing its form to culture, leisure, and sports, and spending on hospitality such as drinking and entertainment is steadily decreasing compared to the past.

The issue is where the expectations for the key stage of whisky consumption that will trigger the market increase expected by the whisky industry are focused. It is difficult to expect the same explosive sales as before from whisky consumption in pubs that rely on entertainment culture and entertainment culture, and Diageo's decision to sell its "Windsor" brand is evidence of this reality in the industry. The sale of the Windsor brand, announced in April 2022, was a precedent-setting M&A case in that it targeted not only distribution but also the brand itself for a total acquisition price of 200 billion won. Considering that this whisky brand "Windsor" was a successful brand that captured 70% of the domestic whisky market share in the 2000s and generated annual sales of 400 to 500 billion won for Diageo, this decision by Diageo's London headquarters to sell the Windsor brand reveals a change in expectations for the Korean whisky market.

As of April 18, 2022, the Korean market, where the government has officially declared an endemic period with the complete lifting of social distancing, the remaining hopeful clue for the industry is that the key stage where people drink has been dispersed and spread from the existing absolute dining market to homes. Of course, it is unclear how long this new form of drinking that people experienced during the pandemic will continue. People are more adept at rapid adaptation than trying to cope with major changes. However, for whisky brands that want to proactively take advantage of the current opportunity that still exists, here are some clues for building relationships with these late millennials and Generation Z.

The first generation that can share the joy of drinking even when apart, a fully digital native. The phenomenon of this generation's drinking logs being shared via Instagram Live, just barely turning twenty, is a phenomenon that can be seen quite often through YouTube searches. Among those we met, there were some who created Instagram accounts that they don't normally use and used them only to invite acquaintances when there was an online drinking session.

A generation that values ​​the best experience once and does not spare investment in consumption. Their active pursuit of premium dining experiences, such as not avoiding long lines at omakase restaurants that offer a set menu, is easily confirmed through related hashtags. They choose to experience more expensive luxury accommodations than before, as they don't travel as often as before, which has a connection to the high price of whisky and its proportional value proposition.

A generation that prefers loose relationships and plays with a small number of people.Investing in subscription services for online classes or gatherings centered around taste, rather than investing in deep, personal new relationships, is also a key change in this generation’s consumption during the pandemic. This can serve as an opportunity to expand the possibility of whisky as a new taste discovery that 30-something women who visited bars were looking for before the pandemic.

However, in order to properly utilize these opportunities, finding a starting point from a re-examination of the drinking habits of the whisky industry will be a clearer alternative. Often, each industry is maintained based on conventional wisdom and assumptions that are taken for granted. When we conducted a project to understand the reasons for the long decline in sales of traditional Korean medicine in the Korean medicine industry, the common reason for the decline in sales cited by individual practitioners of traditional Korean medicine was based on the premise of a negative perspective from the outside that it was unscientific. However, as the survey progressed, we found that the cause was often the practitioners’ own anxiety about their own traditional Korean medicine prescriptions.

Practitioners of traditional Korean medicine study the theory of traditional Korean medicine for six years in college, but after graduation, unlike doctors, there is no official residency system where they can directly confirm their medical knowledge acquired over time in clinical practice. Therefore, most practitioners of traditional Korean medicine start their own clinics in their neighborhoods after graduation, taking out loans, and face the situation of prescribing a treatment for the chronic joint pain of an 80-year-old man sitting in front of them. For reference, the main textbook they use to learn traditional Korean medicine knowledge for six years is Donguibogam, written 600 years ago. This hidden truth of the industry was one of the key reasons for the decline in sales of traditional Korean medicine, which even 10 years of monthly promotional expenses of 50 million won by the Korean medicine academic society could not solve. When practitioners themselves confirmed the difference in monthly sales between those who overcame this anxiety about traditional Korean medicine prescriptions through personal efforts and those who didn't, reaching hundreds of millions of won, change finally began from within.

If there are any business leaders who believe that the current marketing activities of the whisky industry featuring 30-something celebrities are not enough to achieve the same success as before, when they generated 400 billion won in sales, then this case of the Korean medicine industry is worth paying attention to.

Due to the character limit, please check the following content in the link below.

⁠⁠⁠⁠⁠⁠⁠https://durumis.com/ko/@ryan-reason/30-year-old-celebrities-can-revive-the-whisky-industry-s23a9d5t