Despite the an economic downturn, two of the nation’s leading beverage makers — Hey Song Corp (黑松) and King Car Industrial Co (金車) — recently announced they were expanding into the alcohol market.
Established in 1925, Hey Song is an iconic soft drinks maker best known for its soda products. On Jan. 15, the company said it was entering the beer market by forming an original design manufacturer (ODM) partnership with the state-run Taiwan Tobacco and Liquor Corp (TTL, 台灣菸酒).
King Car, a leading manufacturer of canned coffee under the brand Mr Brown Coffee, also made a similar move in December when it unveiled the first locally produced whisky, named Kavalan Single Malt Whisky.
Wang Ming-chuan (王銘泉), a manager at Hey Song’s alcoholic drinks division, said the nation’s alcoholic drinks market has an annual output value of more than NT$80 billion (US$2.4 billion).
Among all alcoholic drinks, beer ranks first in terms of sales, generating about NT$35 billion in sales per year. Taiwan Beer, produced by TTL, is the most popular brand, with an 80 percent share of the market, Wang said.
The second best-selling alcoholic drink is kaoliang, a liquor made from fermented sorghum that generates about NT$15 billion in sales annually, with Kinmen Kaoliang holding a 90 percent market share.
Kinmen Kaoliang is produced by the county-run Kinmen Kaoliang Liquor Inc (金門酒廠) and is a mainstay of Kinmen County’s economy.
Whisky and wine are the third and fourth best-selling alcoholic drinks in Taiwan, with annual sales of about NT$10 billion and NT$4.5 billion respectively.
“Hey Song’s main advantage in Taiwan’s beverage market is our wide-spread distribution network. There are more than 30,000 locations in Taiwan that sell our Hey Song Soda product,” Wang said.
“Another key strength lies in Hey Song’s strong presence in the food service sector, notably restaurants and catering businesses, which many large beverage companies find difficult to penetrate,” Wang said, adding that Hey Song’s beverages account for more than 50 percent share of this sector.
Hey Song is using existing distribution channels to sell various food-related products including beer, nougat and saltine crackers.
Hey Song kicked off the new year by announcing a collaboration with TTL to make two beers — one from red yeast rice and another from rye.
Under the terms of the agreement, the beers are produced by TTL and sold under its brand name Gold Medal Taiwan Beer, while Hey Song is responsible for marketing and sales activities.
The two companies estimated the two products could generate revenue between NT$300 million and NT$400 million in the first year and help increase their annual sales by 10 percent.
Similarly, King Car invested NT$1 billion in a distillery in Ilan County that is capable of producing 9 million bottles of whisky a year. The company also built a five-floor cellar as part of a plan to establish the nation’s first whisky producer. The company said it would target the middle to upper end of the whisky market.
The factory is combined with a 1,320m² Mr Brown Coffee Shop and an orchid park to form a 29,7520m² park where visitors can taste wines, drink coffee and shop. It opened on Dec. 4 and its visitors exceeded 6,000 per day during the holiday from Jan. 1 to Jan. 4.
King Car spokesman Ma Ming-hao (馬明皓) said the company had talked with its distributors in the US, Europe, Japan and Hong Kong, hoping to find markets for the first Taiwan-made whisky.
“King Car wants to let consumers know that the world’s finest whisky does not only come from Scotland. Taiwan’s Ilan County also produces high-quality whisky,” Ma said.
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