A person living in Seoul in the 90’s could practically watch South Korea develop before their very eyes. Buildings were sprouting up faster than dandelions and the city was a blur of cars, businessmen, and economic growth (minus the IMF Crisis, of course). Yet amidst all of this exponential growth, something felt missing; something cold and frothy to be enjoyed at the end of a long day.
Where was all the beer?
Of course, beer did exist in Korea. Stopping by a local bar or restaurant would offer up beer from one of three sources: Hite (makers of Max), Oriental Brewery (OB), and Cass. For many residents of Korea, this selection left something to be desired.
The craft beer scene was a veritable ghost town. However, it wasn’t a lack of desire for beer diversity in Korea that prevented the growth of microbreweries, but something much more complex.
In The Beginning…
Beer was first introduced to Korea in the early 20th century and, soon after, Korea began establishing its first breweries. Hite Brewery (then known as Chosun Breweries) opened its doors in 1933 and Oriental Brewery (OB) entered the scene in 1952.
These two companies would tower over the beer market and remain there thanks to government restrictions on licenses based on brewing capacity and taxes that favored large-scale production. Cass, created by Jinro-Coors, was established in 1994 only to be absorbed into OB shortly after in 1999.
To this very day, Hite (who merged with Jinro in 2006) and Oriental Brewery continues to dominate the beer industry in Korea.
However, by the 1990’s a trickle of imported beers began to work its way into the country. One of the first places to serve imported beers was O’Kim’s Brauhaus, which offered for the first time parched patrons a chance to quench their thirst with a glass of Guinness. From there, interest in quality imported beers began to grow.
As the world’s gaze fell upon Korea during the 2002 World Cup, the domestic liquor tax law was amended and the government began granting licenses to microbreweries. These licenses still prohibited wide distribution, however, and beer from microbreweries had to remain within the confines of the company’s own businesses.
These types of establishments are known as “brewpubs,” and this change in the law brought forth an unprecedented surge in the number of breweries in Korea.
Platinum, Oktoberfest, and Castle Praha entered the world of beer production and speaking with any of these companies today, it is very clear that the liquor tax law was one of the fundamental obstacles that made the business of brewing beer so risky.
“The regulatory standards regarding manufacturing facilities and the liquor tax system made it very difficult for businesses to survive,” says Lee Won-sik of Oktoberfest. Out of over 140 new breweries that opened their doors around 2002, only a small handful of them would survive the long-haul. In spite of these obstacles, places like these would continue to grow throughout the 2000’s, and the public’s thirst for fresh, unique beers began to sprout.
This growing air of enthusiasm for unique beers was not wrought by brewpubs alone; the increasing amounts of imports to the nation played a role as well. Although none of them were really small-time beers, many imports enjoyed quite a bit of popularity at this time.
For Kim Kyo-ju, founder of the microbrewery 7brau, the attitude towards imports in the early 2000’s was more of a hindrance than a helping hand. “The belief that import beer was far superior to domestic beer dominated in the nation,” says Kim, “Japanese beer especially was considered a luxury.”
But in some ways, this cracked the door for the introduction of one of the first craft beers imported to Korea: Alley Kat.
The Canadian brewed beer Alley Kat arrived on the shores of Korea thanks to the efforts of another establishment known as KaBrew, founded by brewmaster Park Chul, and the help of beer aficionado Michael Berry. Park Chul began his business in 2000 and opened his brewpub when many of them were bubbling into existence in 2002.
When Alley Kat kegs finally hit the taps of Korean bars in the mid 2006, it was a hit—and when the brewpub bubble began to collapse, its sales helped KaBrew endure and push on towards the next great turning point in the history of beer in Korea. Alley Kat, along with other imports like Big Rock, helped fan the flames of popularity of craft beer among Koreans.
But the fact still remained that one could import craft beers from halfway around the globe to be sold, but many domestically produced craft beers in Korea could not be sold in their own country’s bars due to legal restrictions.
The Dawn of Domestic Distribution & Contract Brewing
It was in 2010 that a Western-style craft beer bar made its first appearance serving quality domestically-produced craft beers. As Craftworks founder Dan Vroon recalls, “people would walk up to the building and peer in the windows [or] write to us to show support or offer help.” The community was ready for it, and a partnership between Craftworks and KaBrew would mark a changing of the winds for craft beer in Korea.
In the early days, Dan Vroon and Park Chul had worked together brewing beers and selling them on boat tours and other events put on by KaBrew, but looming changes in brewing laws on the horizon had them poised on a precipice, ready for their chance to push the industry ahead.
Under previous laws, breweries had to be able to produce over 1 million liters of beer annually, but in 2011 the manufacturing capacity requirement for breweries was lowered to 150,000 liters. Even more crucially, however, newly revised distribution laws allowing beer brewed by one business to be sold to another foreshadowed a new world of opportunities.
Craftworks started out as a subsidiary of Chul’s KaBrew to allow them to serve his craft beers but with law changes the very next year actually preventing large brewers from running their own bars, it was soon handed over to Craftworks Taphouse & Bistro Inc. founder Dan Vroon and his business partners.
They began to take a more active role in dictating how the Craftworks brand beers were produced and this marked the beginning of a new partnership where KaBrew would brew the beer that Craftworks created and Craftworks would sell it in their establishment. This process, known as contract brewing, has become the next evolutionary step for craft brewing in Korea.
Park Chul knew Craftworks would be a success, and he was right. Business was booming, and soon others began following suit. Right around the corner, another establishment named Magpie opened up in 2012 by a group of people whose passion for beer grew out of their own homebrewing efforts.
Meanwhile, Sung Lee, CEO of Brewmasters International, was busy working to bring more imported beer into the country and change the perception of beer among the Korean populace.
Around the time of the 2011 law changes, 7brau decided to close their two branches and, with the help of investors, open up their own brewing facility in Hoengseong. Due to the high-capacity requirements for wide-distribution, 7brau and KaBrew were among the few craft breweries that fit the legal requirements that allowed them to take the position of contract brewers in Korea at the time.
With the Itaewon area being a hotbed of beer activity, 7brau began their own campaign to enter the market. “We targeted foreigners who were already familiar with, and able to appreciate, craft beer,” recalls founder Kim Kyo-ju. “Once our beer started to go viral by word of mouth, we gained the confidence to launch our own canned beer.”
While the lessons and pitfalls of the early 2000’s had not been forgotten, it was time to look towards the future. It was time for a new beginning.
The Explosion of 2014
This was it—the “beer revolution,” as many were calling it, was in full-swing. By 2014, the manufacturing storage capacity (post-fermentation) requirement was lowered to 50,000 liters; the taxes had been reduced slightly and adjusted according to production output, and at last new breweries began to pop up.
One of the most important factors in the growth of the beer industry in Korea, according to Dan Vroon of Craftworks, is that many of these new brewers are not just attempting to capitalize on a burgeoning market, but have the passion and dedication to their craft to keep the industry growing.
Among these passionate breweries is Hand & Malt who first opened up shop in the beginning of September 2014 and seeks to add their own flavor to the mix. Founder Bryan Do describes Hand & Malt by saying, “we are the underdogs, we are not backed by any corporations or funds, we are a brewery that has [the] passion to bring great beers to the Korean consumers.”
But Hand & Malt aren’t the only new brewers on the scene. The Galmaegi Brewing Company started their business in 2013 as the first craft beer pub in Busan, South Korea and has expanded by opening up a second location in 2014. The Korea Craft Brewery, which opened up earlier this year, is another new face on the scene. They have begun with a joint venture between a Korean investor and the Japanese company that produces Hitachino beer within Korea.
Hand & Malt and Galmaegi Brewing Company are at the cusp of the new order of craft beer in Korea. Some of these brewers, like Levee in Suwon, who had not succeeded in during the early 2000’s bubble, had been awaiting these law changes so that they could take another shot at opening their business.
And it is not just breweries who are working towards a brighter beer future in Korea. Many bars and pubs are now becoming more involved by making good use of the contract brewing system that has become a cornerstone of the craft beer market. Bars like The Booth, Lovibond, Magpie, and of course Craftworks are among those working with breweries like 7brau and KaBrew to craft their own original concoctions to be sold at their bars. Meanwhile, bars like Springs Taphouse, who began importing craft brewed beer straight from Canada in 2013, continue to help disseminate craft beer awareness to the public.
But in some ways, the skies have not cleared, and there are still storm clouds hanging overhead. “Government relations still is tough, Korea is not as easy to start a business [in] as other places are in the world [sic]. There is help that [the] city provides but, it’s just introductory; everything else has to be done by yourself,” says Bryan Do.
And while the laws continue to move in a favorable direction, they still have a long way to go before they are no longer weighted in favor of mass-market production. Companies like 7brau lament that the ratio of their fixed costs compared to large corporations make it difficult for them to compete in the market.
The situation for microbreweries becomes even more precarious as the larger brewing corporations begin to notice the shifting tastes of their consumers and adjust their strategies accordingly.
New beer lines are being added by OB and Hite, and recently Lotte Liquor entered the playing field with their beer Kloud brewed with European hops and yeast from Germany. “This is a double-edged sword,” cautions Bryan Do of Hand & Malt, “because on one end it will help bring more awareness to craft beers but on the other end, us small business owners do not have the deep pockets they do for marketing or sales expansion.”
In many ways, the ball has begun rolling and there is no turning back now. For better or worse, the beer landscape is in for major changes.
Yet despite this “no-mans land” of paperwork, logistics, high-taxes, and on-going restrictions and limitations, the atmosphere surrounding the craft beer community in Korea remains optimistic. There are more microbreweries and craft beers in Korea than there ever was before.
The laws continue to make incremental steps towards allowing microbreweries to flourish, and thanks to the efforts of groups like the Seoul Brew Club and the Korea Microbrewery Association, the network of people who are passionate about bringing quality beers to the peninsula is stronger than ever.
Public awareness of craft beer continues to grow as events like Media Paran’s Korean craft beer festivals see bigger and better turnouts each year. “A lot of people ask me if they think we’ve reached our peak,” muses Dan Vroon of Craftworks, “but I really believe that things are only at 1% right now, and it will only continue to grow.”
Additional photos courtesy of 7brau and Hand & Malt
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