Lotte Chilsung Beverage Co., Ltd. (Korean: 롯데칠성음료 주식회사; RR: Rotde Chilseong Eumnyo Jusik Hoesa; lit. Lotte Chilsung Beverage Corporation) is a drink manufacturer in South Korea affiliated with Lotte Corporation. The company's name, Chilsung (Korean: 칠성; Hanja: 七星; RR: Chilseong), 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.[3] 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
Vending machines with Chilsung Cider advertisement
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]
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.[citation needed]
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 (Korean: 처음처럼; RR: Cheoeum Cheoreom; lit. 'like the first time') is the world's first soju made from alkaline-reduced water. In 2021, the spirit brand recorded sales worth ₩41.9 billion (US$36.63 million) in 37 countries.[11]
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.[citation needed] Lotte Chilsung continued to grow signing a contract with Gatorade in 2001.[12]
By the end of 2024, a Lotte spokesperson claimed overseas sales will make up more than 30% of Chilsung Beverage's total revenue.[13]
US
In 2017, Lotte sought to expand their presence in the US beverage market, promoting Cider, Milkis and energy drink Hot6.[14] They first began exporting their flavoured soju brand Cheom-cheoreum Soonhari to the US in 2019.[11]
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 Phillippines
Chilsung Beverage first entered the Filipino market in 2010 by purchasing a 34.4% stake in Pepsi Cola Products Phillippines (PCPPI).[13] In 2020, Chilsung paid ₩71.4 billion (US$62.42 million) to increase their stake to 72.9%.[22] They completed their acquistion 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 (Korean: 처음처럼; RR: Cheoeum Cheoreom; lit. 'like the first time') 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 ₩20 million (US$17,483.28).[28]
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 ₩21.7 billion (US$18.97 million).[31]
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 ₩500 million (US$437,082.04).[32]
2015 Power Struggle
As Lotte founder Shin Kyuk-ho's health was deteriorating, his sons vied for control of the conglomerate.[33] 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.[34] News of the leadership struggle created doubts about Lotte's future, and Lotte Chilsung Beverage's market value dropped 6.85% in August.[35]
2016 Embezzlement Scandal
In 2016, amidst a police probe into embezzelment, Lotte Group companies lost a combined market value of ₩1.21 trillion (US$1.06 billion) in just four days, with Lotte Chilsung's shares falling by 3.93% in a single day.[36]
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.[37] After serving for 234 days, an appeals court released him from prison, and he went back to his duties as Chairman shortly after.[38] When news of his release broke, Lotte Group's market value was boosted by 4.2%.[39]
Accounting Fraud
In 2018, Chilsung Beverage was fined ₩105.4 million (US$92,136.89) 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 ₩21.4 billion (US$18.71 million), reporting them as just ₩2.76 billion (US$2.41 million).[40]
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