Lotte Chilsung discontinues KEG draft beer to shift focus to cans, bottles, and functional brews
Lotte Chilsung axes two 20ℓ draft beer lines, reallocates capacity, and ramps investment in non-alcoholic and functional beer segments.
SOUTH KOREA – LOTTE Chilsung Beverage has confirmed it will stop manufacturing two KEG draft beer products, Crush (20ℓ) and Kloud (20ℓ), as part of its strategy to prioritise can and bottle formats and expand functional beer categories, including non-alcoholic beer.
The company said the decision applies strictly to its KEG draft beer portfolio, and that all other beer segments will continue unchanged.
A company representative stated that the restructuring is aimed at enhancing operational efficiency by concentrating on its primary sales formats while accelerating growth in beers positioned on added function, particularly non-alcoholic products.
Crush and Kloud KEG variants were largely distributed to the restaurant and leisure trade, serving outlets such as pubs, restaurants, fried chicken chains, and other entertainment venues.
LOTTE Chilsung said it is preparing to reorganise relevant production infrastructure and redeploy staff, with workforce repositioning slated for completion by the first half of 2026.
Financial performance challenges were identified as the key driver of the move. Kloud, a premium lager formulated with 100% malt and aroma hop blends, carries a higher input cost than conventional beers, raising cost pressures amid softer demand.
The company also cited a long-running slowdown in restaurant and nightlife consumption, which has reduced distribution efficiency in draft beer supply channels.
Within its Q3 2025 earnings, LOTTE Chilsung reported cumulative liquor revenue of 575.3 billion won, a 7.4% decrease year-on-year. Domestic beer sales declined 38.6% year-on-year to 41.6 billion won (US$28.46M) over the first three quarters.
In the third quarter alone, domestic beer revenue contracted 36.4% to 15 billion won (US$10.26M), while quarterly beer sales sank 38.6% to 15 billion won, reflecting sustained market headwinds.
LOTTE has been adjusting its beer business sequentially since 2024. The company discontinued Kloud Raw Draft in March 2024, followed by Kloud Calorie Light in July 2024.
During this phase, the non-alcoholic beer portfolio was streamlined under the brands Clear and Clear Zero, before both were merged into the Kloud Non-Alcoholic master brand to unify its alcohol-free positioning.
The company said the retirement of Crush and Kloud KEG products is part of its broader beverage portfolio optimisation exercise, built around consolidating production, reallocating resources, and reinforcing products that align with changing consumption dynamics.
Functional and non-alcoholic beer formats remain a central pillar of its long-term beer category strategy.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
