Facing many challenges at home, Japan’s alcohol industry is looking to expand into new markets around the world, hoping that consumers will turn to the country’s premium sake, beer and whiskey.
The drinks industry acknowledges that the past few years have been tough for Japan, with clear signs that people are going out drinking with colleagues or friends less frequently than they used to in Japan.
And they point out that this was evident even before the COVID-19 pandemic forced bars and restaurants in Japan to close from the start of 2020.
“There are various reasons why drinking has decreased, but I think many of the reasons are the same as in other countries,” said Iuchi Hiromi, a spokeswoman for the Japan Sake and Shochu Makers Association.
“Japan has a declining population, so that’s obviously a factor,” she says, “and a lot of people who drink sake are older, as it’s not considered a young person’s drink. We’re trying hard to change that, but more generally there’s also a trend of younger consumers moving away from alcohol due to health concerns.”
be pressured by imports from abroad
Iuchi said the sake market is also being squeezed by foreign liquor and beer imports, severely affecting Japan’s traditional beverage industry. About 40 years ago, there were as many as 4,000 sake breweries across the country, but now that number has fallen to just 1,400, he told DW.
Japanese breweries are in a similar situation, with per capita consumption expected to be 34.2 liters in 2022. This figure is significantly lower than the average Czechs’ consumption of 188.5 liters and Germans’ consumption of 149 liters.
“The factors vary somewhat by category, but consumption is declining due to a declining population and changing attitudes toward alcohol among young people,” said Russell Roll, corporate communications manager at Kirin Holdings, one of Japan’s largest beer makers.
While the company’s flagship products, Kirin Ichiban Shibori beer and Kirin Hyoketsu, a canned vodka mixed with soda and lemon juice, have proven popular with consumers, Roll says it is important for the company to explore new opportunities overseas and build on existing popularity.
“Kirin sees overseas markets as a very important area of potential growth,” he told DW. “Our overseas business is already growing, with Kirin Ichiban Shibori being the largest, but Hyoketsu and Fuji brand whiskeys have also been growing recently.”
According to figures compiled by the Finance Ministry, Japan will export 134.4 billion yen (776.09 million euros, $845 million) worth of alcoholic beverages in 2023. The total is down just 3.4 percent from the previous year, which saw a record high, but much higher than in 2011, when exports were worth just 17 billion yen (98.16 million euros).
Japanese whiskey and sake dominate exports
The largest exports were whiskey, accounting for about 37% of the total, and sake, 30%, both of which were down about 10% from 2018. Japanese beer made up the difference, increasing by more than 66% from 2018, according to the ministry’s figures. Liqueurs accounted for a further 9% of exports, and gin and vodka about 3%.
The largest importer is China, followed by the United States, South Korea, Taiwan, Hong Kong, Singapore and the Netherlands, but analysts say the increase in beer exports to Asia-Pacific countries is due to unusual circumstances.
The Japanese beer brand was perfectly positioned to capitalize when sales of its Tsingtao beer brand in China fell dramatically after a video of a man urinating into a malt tank at the Tsingtao Brewery in Shandong province was shared on social media in December 2023. After the video came to light, the company lost 4.2 billion yuan (567.74 million euros) in one day on the Shanghai Stock Exchange.
Though the stock price has mostly recovered, many people remain wary of the brand.
Japanese alcohol has also benefited from a rebound in demand in South Korea, where consumers launched a widespread boycott of Japanese products in 2019 as the two governments sparred over an often fractious shared historical legacy.
Japanese beer makes a comeback in Korea
According to South Korean government statistics, Japanese beer was the most popular imported beer in 2018, but sales plummeted after the boycott. However, improved relations between the two countries led to a 283% increase in imports in 2023 compared to the previous year.
Iuchi said sake is currently mainly exported to China, the US and Hong Kong, but the company aims to expand to other markets including Singapore, Australia, Brazil and Mexico, as well as increase exports to Europe, which currently accounts for 6% of exports.
“A lot of it is education. We need to work with sommeliers to explain, for example, which sake goes with which food and encourage them to share that with their customers,” she noted.
“The aim is to explain the culture of sake, give people some background on it and explain how sake can complement European cuisine,” she added.
“But I’m very optimistic. Japan now produces really great sake and shochu, and I believe that if we can make sake popular and appealing to overseas consumers, it will become popular among Japanese people and people will start drinking sake again.”
Editor: Srinivas Mazumdar
