Lotte Chilsung
Lotte Chilsung Beverage Co., Ltd. is a South Korean beverage company founded in 1950 as Dongbang Beverage Company in Seoul and affiliated with the Lotte Group since its renaming in 1974.[1] The company manufactures and distributes a diverse portfolio of products, including carbonated soft drinks such as the flagship Chilsung Cider—a lemon-lime beverage—and Milkis milky soda, as well as colas, juices, functional drinks, and alcoholic beverages like the soju brand Chum-Churum.[2][3] With annual sales reaching 3.22 trillion South Korean won as of December 2023, Lotte Chilsung holds a leading position in the domestic beverage market, having been ranked number one in national customer satisfaction for the beverage sector for 12 consecutive years.[3] It pioneered milestones such as achieving the first one-trillion-won annual sales for a Korean beverage firm in 2001 and has expanded internationally through exports to over 70 countries and strategic acquisitions, including a stake in Pepsi-Cola Products Philippines in 2010.[1] Chilsung Cider has garnered global recognition, earning the highest superior taste award in its category in 2024.[4] The company's emphasis on quality, innovation, and certifications like ISO 37001 underscores its reputation for clear, clean products and trendsetting marketing.[1][2]
History
Founding and Early Years (1950–1960s)
Lotte Chilsung Beverage Co., Ltd. traces its origins to May 1950, when it was established as Dongbang Beverage Company in Seoul, South Korea, during the nascent stages of the country's post-liberation industrial recovery.[5] The company entered the market by launching Chilsung Cider, a carbonated lemon-lime soft drink that became its flagship product and marked one of the early commercial successes in Korea's emerging beverage sector.[6] This initiative capitalized on limited domestic production capabilities, with Chilsung Cider quickly gaining popularity for its refreshing taste amid economic hardships following World War II and the onset of the Korean War later that year.[2] Throughout the 1950s, Dongbang Beverage focused on building production capacity and distribution networks for carbonated drinks, introducing Speci-Cola in 1957 as its first cola variant to diversify offerings and compete with imported beverages.[7] The company's growth aligned with South Korea's economic stabilization post-1953 armistice, enabling gradual expansion in urban markets where soft drinks served as affordable luxuries.[6] By the early 1960s, under government-led industrialization policies, Dongbang had solidified its position as a key domestic player, emphasizing quality control and local sourcing to meet rising consumer demand.[2] A milestone in the late 1960s came in 1966, when the company initiated exports of Chilsung Cider to Vietnam, representing South Korea's inaugural beverage export and signaling international ambitions amid the nation's export-oriented development strategy.[5] This period laid the groundwork for sustained operations, with annual production scaling to support both local consumption and nascent foreign markets, though the entity remained independent from the Lotte Group until later integrations.[6]Integration with Lotte Group and Expansion (1970s–1990s)
In 1973, Lotte Chilsung Beverage, then operating as Chilsung Hanmi Beverage following a name change and initial public offering, was acquired by the Lotte Group, marking its formal integration into the conglomerate's expanding food and beverage portfolio. This acquisition leveraged Lotte's capital from its Japanese operations to bolster the company's growth amid South Korea's rapid industrialization. By December 1974, the firm officially rebranded as Lotte Chilsung Beverage Co., Ltd., aligning it structurally with Lotte's diversification strategy into consumer goods during the 1970s.[1][5] The integration facilitated significant infrastructural expansion, with new production facilities established to meet rising domestic demand. In October 1976, the Seocho-dong plant in Seoul commenced operations, enhancing urban distribution capabilities.[1] This was followed by the June 1978 launch of the Yangsan plant in Gyeongnam Province and the October 1979 opening of the Opo plant in Gyeonggi-do, increasing overall manufacturing capacity and regional coverage.[1] Concurrently, in December 1977, a mandarin juice extraction facility began construction in Seogwipo, Jeju-do, signaling diversification beyond carbonated drinks into fruit-based products.[1] Strategic partnerships further drove product expansion and technological upgrades. In July 1976, Lotte Chilsung signed a production and sales agreement with PepsiCo, enabling localized manufacturing of the cola brand and broadening its soft drink lineup.[1][5] A December 1982 technical tie-up with Del Monte for juice production introduced imported expertise in fruit processing, complementing domestic juice initiatives.[1] These moves positioned the company as a key supplier for major events, including selection as the official beverage partner for the 1986 Asian Games and 1988 Seoul Olympics in November 1985.[1] By the late 1980s and 1990s, emphasis shifted to quality standardization and international recognition. In July 1989, Lotte Chilsung became the first South Korean firm to receive Japanese Agricultural Standards (JAS) certification, facilitating exports and affirming product reliability.[1] In December 1995, all its plants achieved ISO 9001 certification, a milestone for domestic beverage manufacturers, underscoring operational maturity amid growing competition.[1] These developments solidified Lotte Chilsung's role within the group, transforming it from a regional player into a diversified producer with enhanced market share.Modern Developments and Milestones (2000s–2025)
In 2005, Lotte Chilsung began establishing overseas subsidiaries in China, the Philippines, and Myanmar to support export growth and local production.[8] The company formalized its entry into the Chinese market by establishing Lotte Huabang Beverage Co., Ltd. in March 2009, focusing on localized beverage manufacturing and distribution.[9] In September 2010, it acquired Pepsi Cola Products Philippines, Inc. (PCPPI), enhancing its position in the Philippine soft drinks market through production and sales partnerships.[1] The 2010s saw product innovation driven by health trends, including the launch of Chilsung Cider Zero in 2011, a zero-calorie variant of its flagship lemon-lime soda that maintained the original flavor profile while addressing consumer demand for low-sugar options. Successive zero-calorie extensions followed, such as Tams Zero and Hot6 The King Zero, positioning Lotte Chilsung as a leader in Korea's reduced-sugar beverage segment.[10] In January 2020, the company introduced additional zero-sugar products tailored to younger consumers prioritizing health, further diversifying its portfolio amid rising wellness awareness.[9] Overseas expansion accelerated in the 2020s, with a December 2023 acquisition of a 73.6% stake in Pepsi-Cola Products Philippines Inc., securing full management control and enabling brand localization efforts.[11] That year, Lotte Chilsung signed agreements to bolster U.S. distribution for soju brands like Soonhari and Saero, resulting in a 700% volume surge in soju sales there by March 2025.[12] In August 2025, it launched Milkis carbonated milk drinks (Original, Strawberry, and Melon flavors) across 23,000 Indomaret stores in Indonesia, building on prior overseas sales of 50 billion won for Milkis in 2024.[13] Domestically, infrastructure advancements included the August 2025 opening of South Korea's first fully automated multi-product beverage distribution center in Bupyeong, equipped with Dematic's integrated logistics systems to enhance order fulfillment efficiency and reduce labor costs.[14] Marking its 75th anniversary, Chilsung Cider received a redesigned packaging in late 2024—its first major update in 24 years—followed by a commemorative variant unveiled at the Gulfood 2025 fair in Dubai in February 2025, emphasizing refreshed branding and global promotion.[15][16]Corporate Governance and Ownership
Ownership Structure within Lotte Group
Lotte Chilsung Beverage Co., Ltd. operates as a publicly listed subsidiary within the Lotte Group, with its shares traded on the Korea Exchange. The group's holding company, Lotte Corporation, maintains a controlling stake of approximately 44.25% as of July 2024, comprising 4,449,414 shares.[17] This position ensures strategic oversight and alignment with broader group objectives in the beverage sector. Additional ownership by Lotte affiliates bolsters the group's influence, including Lotte Aluminium Co., Ltd. holding 7.35% (739,370 shares) as of the same period.[17] Collectively, related parties and Lotte affiliates accounted for 62.39% of shares as of December 31, 2023.[18] Other notable holders include VIP Research & Management Inc. at around 7.8%, though its ties to the group are less direct.[19] The ownership structure reflects Lotte Group's 2017 transition to a holding company model, where Lotte Corporation centralizes investments across subsidiaries, including Lotte Chilsung, to enhance governance transparency and operational efficiency.[20] The remaining 37.61% of shares are dispersed among institutional investors, such as the National Pension Service, and individual shareholders, providing liquidity while preserving group control.[18] Recent transactions, including the sale of minor family-held stakes in 2025, have not materially altered the affiliate dominance.[21]Management and Board Composition
Park Yun-gie serves as the Chief Executive Officer and Chairman of Lotte Chilsung Beverage Co., Ltd., having been appointed CEO in March 2021 and reappointed in 2023 for a two-year term.[22] In this dual role, Park oversees strategic planning, marketing, and overall operations, drawing from prior experience as head of those divisions within the company.[22] The board of directors consists of a mix of inside and outside directors, totaling nine members as of appointments through March 2024, with terms generally lasting two years.[22] Inside directors include Na Han-chae, head of the beverage sales division appointed in March 2024, and Song Hyo-jin, head of the finance division and Chief Financial Officer, appointed in 2021 and reappointed in 2023, who previously worked as an accountant at Hanyoung Accounting Firm.[22] Song manages financial strategy and reporting.[22]| Name | Position/Role | Type | Appointment Date |
|---|---|---|---|
| Park Yun-gie | CEO and Chairman | Inside | 2021.03.23 (reappointed 2023) |
| Na Han-chae | Head of Beverage Sales Division | Inside | 2024.03.20 |
| Song Hyo-jin | CFO and Head of Finance Division | Inside | 2021.03.23 (reappointed 2023) |
| Lim Kyung-gu | Certified Public Tax Accountant, K Partners | Outside | 2021.03.23 (reappointed 2023) |
| Cho Hyun-wook | Lawyer, The Joeun General Law Firm | Outside | 2021.03.23 (reappointed 2023) |
| Ha Sang-do | Professor, Chung-ang University | Outside | 2023.03.22 |
| Lee Sang-myoung | Professor, Hanyang University | Outside | 2024.03.20 |
| Kim Hee-woong | Professor, Yonsei University | Outside | 2024.03.20 |