Kirin Ichiban Shibori, one of Japan's best-known beer brands, will be brewed in South Korea. HiteJinro (000080.KS) has signed a licensing agreement with Japan's Kirin Brewery and begun local production at its plant in Jeonju, Jeonbuk Province. It is the first time an Asian partner has brewed Kirin Ichiban Shibori itself. The two companies shifted from an import-based distribution model to local production as demand for Japanese beer in Korea has surged.
HiteJinro said on the 12th that it signed a memorandum of understanding on technical cooperation with Kirin Brewery in July for domestic production and began shipping locally brewed Kirin Ichiban Shibori in the first week of this month. Before signing, the two companies spent more than a year on technical exchanges and test production to verify that local brewing was feasible. "We applied Kirin's proprietary Ichiban Shibori brewing method, its ingredients, processes and quality control standards to the Jeonju plant exactly as they are," HiteJinro Chief Executive Jang In-seop said at a press briefing. "With this technical agreement, our partnership will move beyond simple distribution into a forward-looking strategic relationship in which we build technology and quality together."
Production takes place at HiteJinro's Jeonju plant. The initial output is 1.5 million liters, equivalent to about 3 million 500-milliliter cans. The company is converting imports to local production starting with canned beer, which accounts for the largest share of its domestic sales. HiteJinro plans to brew about 75% of Kirin Ichiban Shibori's annual Korean sales volume at home by next year.
Behind the shift is the rapid growth of Japanese beer in Korea. According to HiteJinro, the country's imported beer market shrank by an average of 3% a year from 2020 through last year. Over the same period, imports of Japanese beer grew by an average of 72% a year. Kirin Ichiban Shibori has posted average annual growth of more than 14% since HiteJinro signed an exclusive import and sales agreement in 2011. Sales hit a record high last year, the highest since the brand entered the Korean market, and are expected to set another record this year.
With sales climbing, the company said shipping the product from Japan was no longer enough to meet domestic demand. "Japanese beer has grown to account for close to 50% of Korea's imported beer market," said Kwon Kwang-jo, who heads HiteJinro's premium division. "Growth has been so steep that demand in the Japanese market and the Korean market overlapped, leaving supply somewhat short."
The company says taste and quality will remain identical to beer brewed in Japan despite the change in production site. To that end, HiteJinro applied Kirin's proprietary Ichiban Shibori method at the Jeonju plant. Unlike conventional brewing, the method uses only the first wort extracted from the malt. Kirin transferred the recipe along with ingredient blends, brewing temperatures and times, and quality control standards.
The yeast that shapes the beer's flavor is supplied directly from Kirin's plant in Japan and cultured in Korea. Other raw materials, including malt and hops, meet specifications set by Kirin. HiteJinro sent trial batches from the Jeonju plant to Japan for testing of taste, aroma and composition, and received final production approval after passing Kirin's quality assessment three times. Locally brewed product will continue to be sent to Japan for regular quality testing.
Local production is expected to sharply shorten supply times. Beer brewed in Japan typically takes about a month and a half to clear customs and reach the Korean market, but brewing in Korea can cut that to one or two weeks, the company said. It also expects to reduce supply risks from disruptions in international logistics.
HiteJinro and Kirin Brewery have worked together for more than two decades. HiteJinro first imported bottled Kirin Ichiban Shibori in 2004, signed an exclusive import and sales agreement covering cans and draft beer in 2011, and began full-scale domestic sales in 2012. The latest agreement moves the relationship beyond imports and sales into shared production and technology. "Brewing Kirin Ichiban Shibori, our flagship imported beer brand, in Korea is the moment when a successful business model built on 20 years of mutual trust with Kirin bears fruit," Jang said.