Suntory Premium Malts (Suntory Ltd.)

Massive Growth
While there is no clear definition of premium beer, each of the major breweries in Japan these days offers products with a rich, deep taste alongside its ordinary beers, which are intended to be crisp and refreshing. The premium beers generally cost ¥30 to ¥40 ($0.25 to $0.30 at ¥120 to the dollar) more per can or bottle.

As shochu (a kind of distilled spirit) has become more popular in recent years, sales of ordinary beer and happoshu (low-malt beer) seem to have peaked. Only sales of premium beer are increasing. According to Suntory, industry-wide sales of premium beer in 2006 were up 60% last year to a total of 250,000 kl, and premium beer now accounts for 7% of the entire beer market. It is expected that sales will be up again in 2007, with 380,000 kl shipped. One market research firm believes that an increasing number of people are drinking ordinary beer or happoshu on weekdays and savoring the rich taste of premium beer on weekends.

Suntory Premium Draft, which is sold in Shanghai (Suntory Ltd.)

International Sales
Interest in premium beer has now spread from Japan to other countries, mainly Japan’s neighbors in Asia. Japanese beer has long been popular elsewhere in Asia; Suntory holds a commanding 60% share of the overall market in Shanghai and has sold Suntory Premium Draft in Shanghai, for example. Asahi Breweries, meanwhile, concluded a contract in 2005 with a British firm to produce its flagship Super Dry beer in that beer-loving nation. Trust in Japanese brands appears to be extending to premium beer.

In August 2006 Kirin Brewery Co. instructed one of its group companies operating in Dalian, China, to begin producing and selling premium beer under the brand Zui Qilin ("ultimate Kirin" in Chinese). The company also began selling Kirin Jichang in Taiwan in December. Other Japanese breweries stepping up sales overseas include Sapporo Breweries, which makes such premium beers as Yebisu and Kohaku Yebisu, and Suntory, whose Premium Malts brew took the Grand Gold Medal in the Selection of Beers division at the Monde Selection international food and beverage competition in 2005 and 2006.

The future for Japan’s beer market is expected to be one of polarization, with consumers gravitating toward either affordable happoshu or high-class premium brands.

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