Domestic brewer dresses up new beer as foreign product

Hitejinro's Kelly Lounge in southern Seoul / Courtesy of Mathew Nolan

By Jon Dunbar

HiteJinro's recently released malt beer, given the understated name Kelly (derived from "Keep Naturally"), boasts in at least nine places on its beer can front label of its apparent origin. It screams at the consumer: "KELLY'S MALT GROWN IN THE NORTH ATLANTIC OCEAN BREEZE" "100% DENMARK PREMIUM MALT," "Denmark Premium," "GROWN IN JUTLAND BY SEA BREEZE," "FROM DENMARK," "Malt From Jutland" and also displays a mini Danish flag.

A can and a bottle of Kelly, Hitejinro's new all-malt beer / Courtesy of Hitejinro

It certainly looks like a Danish beer, to the point where even a Danish friend was fooled. But aside from the much-vaunted source of the malt, this is a beer of Korea, made by one of Korea's top three big breweries. Its name could be found in only one place on the beer level, in Hangeul in the small print.

This labeling gives the impression that the company is trying to hide its country of origin as if the beer is ashamed of its Koreanness.

And this isn't the first time we've seen a Korean-made beer disguised as foreign. Another recent example is Terra, released also by HiteJinro in 2019, which boasts of its malt coming from the "Australian Golden Triangle" (AGT). However, not a single Australian person contacted by this reporter had ever heard of the AGT before.

Terra went through a brand overhaul shortly after its release, after the Ministry of Food and Drug Safety banned it from claiming it was a "Clean Lager" on the basis of the Australian origin of its malt. The ministry ruled that clean malts coming from "exceptionally clean areas in Australia" wouldn't affect the product quality, and pointed out that its Korean rivals ― OB and Lotte Chilsung ― also used Australian malts. Terra quietly rolled back the AGT boasts on its packaging, now using the phrase "Australian Genuine Malt" (AGM or AG Malt).

HiteJinro is not the only Korean brewer presenting new beers as foreign. OB in 2014 released a "Classic British Style Beer" called Aleston. Around the same time, Lotte Chilsung Beverage released Kloud, a brand that has met with sustained popularity but has in earlier years occasionally been mistaken as a German drink by a few customers.

Cans of Hitejinro's Terra and Kelly and OB's Hanmac / Korea Times photo by Jon Dunbar

What is behind this phenomenon? The big brewers have been losing domestic market share year after year, forced to compete with a growing selection of increasingly lower-priced foreign beers and higher-quality domestic craft brews.

"The macro-beer market has ceded a lot of ground to the craft scene for the under-40s in the last five years," said Kevin Grabb, a Canadian beer brewer who runs the YouTube channel Korea Brewing Adventure. "I think the older, traditional types still get a kick out of the foreignness of certain beers as it pertains to 'perceived luxury.'"

So if the Korean big brewers can't beat the growing competition with well-known Korean brands like Cass and OB, they might as well join them ― with brands that sound foreign like Queen's Ale or of at least indeterminate origin such as Fitz.

Even names like Cass and Hite, well-known Korean brands, don't signal anything Korean. OB unabbreviated spells out Oriental Brewery, the closest hint that this may be a Korean company. But why haven't there been beers with names that sound like Arirang, Saemaul, Eunhasu or Hansando (all of those are former cigarette brands)?

Prejudices abound in the contemporary beer market, with many predisposed against domestic beer and others associating foreign beers with luxury and prestige.

"I frankly think that it's a response to a more discerning consumer base that considers themselves 'global' and have become much more aware of and appreciative of imported styles of beer," said Robert Watson, an assistant professor at Sungkyul University who studies Korean alcohol industry development trends. "These macro producers have done their market research and realize they need to respond with a more global brew that still fits with Korean cuisine such as barbecue and fried chicken."

He emphasizes that Korean mass-produced lagers as well as Kelly are "designed to be appreciated in tandem with food," as Korean big brewers still dominate in domestic restaurants. It's in retail settings including convenience stores and grocery stores where consumers are presented with an overwhelming selection of international and craft beers.

Watson attributes this market change mainly to free trade agreements (FTAs), starting with Korea's FTA with Chile in 2004 and emboldened by FTAs with the European Union (2011) and the U.S. (2012).

"What this has forced domestic producers of beer to look at is the growing awareness and access domestic consumers have to imported beers through these agreements," Watson said. "Essentially, I would view this from a private sector perspective as a response to more market competition and market maturity."

Inside Hitejinro's Kelly Lounge in southern Seoul / Courtesy of Mathew Nolan

As well, laws on small businesses brewing beer have been relaxed, enabling a cottage industry to grow over the years.

"Although Hite and other local lagers may be headed to the spillage bucket of the alcohol industry in favor of new mass-produced quasi-Western lagers, there is a new generation of local brewers embracing the craft zeitgeist and stepping into the frothy void," Watson said.

There are Korean beers that show pride in their Korean heritage and count on the growing popularity of the Korean brand globally. This may be best exemplified by pioneering craft breweries like Magpie, which is branded based on Korean folk beliefs, and the now-closed Craftworks, which cleverly named its beers after Korean mountains. Both are foreign-owned, but after their example, microbreweries run by Korean nationals have also shown increasing pride in where they're from.

Playground Brewery has named its beer lineup after eight Hahoe masks. Granted, one of its beers is advertised as a Belgian IPA, but its actual label includes Hangeul ― "Gogeup (premium) IPA." Galmegi Brewery, named after another auspicious bird in Korean culture, shares its hometown pride with its Busan Lager, and Jeju Beer Company takes it even further. Kabrew, based in Gapyeong-Gyeonggi Province, offers a line of Kumiho beers, named after a fearsome mythical creature.

Increasingly across the country, one can find proudly Korean beers with labels namedropping particular localities, sports teams, products and pop culture references, often released in collaboration with celebrities, chaebol executives and companies. The Gompyo beer brand lineup, a collaboration between brewer 7Brau, convenience store CU and flour company Daehan Flour Mills, has reportedly been selling like crazy.

A refrigerator full of various Korean alcoholic beverages is seen at a CU in central Seoul's Haebangchon, April 24. / Korea Times photo by Jon Dunbar

Watson attributes this localization trend to a reaction to globalization and free trade, as craft brewers are being "tapped" as sources of regional growth, "brewing an economic mix of job creation and tourist flow," in his words.

"Korean micro-producers are slowly being recognized not only as supporting local produce and agro-products but also increasingly being seen as ways to gin up economic activity in rural regions," he said. "This is being encouraged to not only increase awareness, access and appreciation of locally produced products but to also offset some of the changes occurring with macro producers such as Terra and more recently Kelly. The government response has not only been a way of defraying the costs to rural districts from trade agreements but to also promote these products to foreign as well as domestic audiences."

The closest there is now to an openly Korean mass-produced beer may be Hanmac (a Korean abbreviation for "Korean Beer") OB's rice beer released in 2021 that boasts of its locally sourced rice.

Grabb adds that Korea now has its own malt and hops brands, Gunsan Malt and K-Hops. "They're not new. The big boys at OB and HiteJinro have to know that they exist. You'd think that these big boys, with older drinkers more known to thump their chests in patriotism, would be all over that," he said. "But they're very top-heavy and risk-averse. They can't put out 500 liters of a rosemary peach Gose and see how the market reacts."

For now, Kelly certainly seems like a safer choice, offering more of what worked in the past, a foreign-sounding beer produced cheaply by a Korean company.

"This beer, along with Terra, actually hits a really good niche," Grabb said. "Which is the perceived luxury of a 'foreign beer' with the 'uri nara' of supporting a Korean brewery."

And Kelly's taste is receiving good if not great reviews. It's comparable to HiteJinro's other malt beer, Max, which is reportedly fading into the background just as Kelly arrives.

Grabb had similar feelings after trying Kelly. "I think it's OK," he said. "It tries to hit that citrusy bite that a really nice German lager has sometimes, or a pilsener, but it falls flat. It isn't pleasant like a really good German lager."

Admitting he prefers Terra, he added that he's planning to release a new YouTube video soon on Kelly. "You can quote me from my upcoming video, if you'd like," he said. "Terra is like an American Lawnmower beer. Kelly is like a German Beerhall beer."