Continuing with Isseki Nagae's dense blog post on Blogos, he moves on to a recent shift in the Japanese sake industry that also impacts how sake is sold abroad - the rise of junmai and "premium" styles.
He produces another graph, this time based on research by the Japan Sake and Shōchū Makers Association in 2015, which shows a sharp fall in production of sake overall from 1,133,000 kilolitres in Heisei 10 (1998) to just 553,000 kilolitres in Heisei 27 (2015).
However, it also shows a small rise in the quantity of tokutei meisho-shu, the legally defined grades that include daiginjō, ginjō, tokubetsu honjōzō, tokubetsu junmai and honjōzō. (Junmai is complicated, I'll go into that another time...) Although the quantity of tokutei meisho-shu fell from 1998 to 2010, going from 291,000 kilolitres to just 159,000 kilolitres, it held steady in 2011 and then started to rise slowly until 173,000 kilolitres in 2015, all the more significant against the drop in overall production.
So more of the sake being produced today is tokutei meisho-shu. Isn't that a good thing? The problem if you want to export, though, is that these legally defined grades are by their very nature more expensive. So by the time they've been exported, this largely unknown drink is forced to compete in the same price bracket as premium wines. On top of that, true premium sake can't be mass produced and is only made in small lots, so it can't take advantage of economies of scale either for production or for export. Transport costs are higher. (Not to mention refrigerated transport.)
And why is sake so expensive anyway? The answer, according to Nagae, is the price of its raw material, production, transport and distribution. Another graph from the Development Bank of Japan report breaks down the costs of a bottle of futsu-shu sold by a retailer. Say it's sold for JPY 1,890. Once the rice, production, bottling, taxes and wholesaler costs are taken into account, only JPY 437 remains as the retailer's margin. (The wholesaler's is a mere JPY 189.) So compared to businesses like fishmongers or department stores, who have margins around 50%, the sake retailer isn't doing so well - about the same as a bookshop. Except bookshops can resell used books, but you can't do the same with sake, so if the retailer stocks 10 bottles and is left with two, they have zero profit. Definitely not a way to get rich quick.
Even the kura only makes 30% profit - and that's the big ones. Smaller ones are probably doing it out of love, says Nagae.
And there's more - I'll finish this off in tomorrow's post!