For decades, the Japanese distilled beverage shochu has been mislabeled in the U.S. as Korean soju, but a new law is clearing up the difference for consumers— and clearing a path for category growth.
Modeled after an identical law established in 2022 in New York, AB 416 in California, passed last November, gives shochu distillers access to a new channel: Type 41 soft liquor license holders, putting it in the same category as beer and wine. Previously, shochu at less than 24% ABV could be sold to Type 41 licensees, but it had to be labeled as soju, which is a Korean distilled product.
The confusing labeling practice was established in the late 1990s, when the Korean soju industry obtained an identical exception that allowed them to sell soju with an ABV of 24% or less to Type 41 licensees.
When Japanese interests inquired for the same permissions, the Alcoholic Beverage Control gave the nod as long as they labeled their product as soju, overlooking an important cultural distinction. While made with similar ferments, shochu also differs from soju by the stricter regulations governing its production, particularly the highest quality style called honkaku, which dominates imports into the U.S. But the average U.S. consumer likely doesn’t know the difference.
“The biggest hurdle in the U.S. is education,” said Chikako Ichihara, U.S. liaison officer for the Japan Sake and Shochu Makers Association (JSS). “While Japan’s other cultural treasure, sake, is fairly well known, shochu is at this time somewhat an unknown product.”
That awareness may have been stalled by the labeling regulations in many states: a significant number of shochu distillers opted to change product labels to soju, or a permissible hybrid “Shochu/Soju” in order to do business in California or beyond. Others refused to rename their product and gave up on exporting to the U.S., according to Ichihara.
Not all shochu brands will enjoy these new permissions, as only about 10% to 20% of shochu is distilled and manufactured at ABV levels below the threshold. But with the passage of the New York and California laws, it’s likely that there will be an exponential increase in the amount of shochu produced at 24% ABV and lower, said Ichihara.
Shochu has been slowly popping up in craft cocktail bars as a base spirit for mixologists, which is where brand Iichiko has found traction. Since the company’s U.S. arrival in 2019, it has landed slots in top New York cocktail bars such as Angel’s Share, Bar Goto and Dead Rabbit. After exploring cocktail innovation, the team has prioritized educational seminars and tastings for mixologists to ensure they have familiarity with the category, said Ken Oka, sales manager at Iichiko. Oka is inspired by other clear global spirits like mezcal that have inched their way into the on-premise as a mixology darling.
With the new legislation, the brand’s Seirin 20% ABV expression can create another inroad in markets that are essential to growing a spirits brand, said Oka.
After soju distillers were given permission to sell to soft alcohol licensees, Jinro America Inc., the largest manufacturer of soju, saw a 35% to 40% increase in the first year since the law passed, according to the Los Angeles Times. Now Iichiko’s Seirin gives restaurants serving wine, beer, cider and sake the opportunity to add a distilled spirit, one that can sub-in easily for a highball or Negroni — and other trendy cocktails.
“Low-ABV cocktails are in fashion right now, and we can’t wait to get in on the action,” said Oka. “These are big markets where brand exposure could benefit on a national level.”
As the association targets laws in other states, it’s aiming to build on the budding thirst for more global spirits. There has been an increase in consumer interest in shochu at 40% and soju at 50%, according to a report from Datassential, most notably amongst Gen Z. In December, Spirit of Gallo announced that it is adding soju to its portfolio of spirits, citing its popularity due to multicultural and Gen Z consumers looking for unique and diverse alcoholic beverage options.