Forbes Japan has an interesting but long article which I have split into two parts.
Despite ongoing shrinkage, the total Japanese market for alcohol is worth over JPY 3.5 trillion. The makeup changes year by year, as seen by the recent increased share of liqueur-based low-alcohol drinks like chūhai [shōchū highball] or cocktails, sparkling drinks and wine.
Hardest hit by the changes are beer and nihonshu. A March 2018 report by the National Tax Agency compared the share of sales (consumption) of each one in 1989 and 2016. Beer went from 71% to 31.3%, while sake fell from 15.7% to 6.4%. Although sake is one “national drink” (国酒, kokushu) like shōchū, it seems to be far worse off when it comes to the Japanese market.
Ryuji Ikoma is CEO of Clear Inc., a startup specialising in the sake industry. He comments that the idea that the sake industry is in dire straits is half-right, but also half-wrong. Clear Inc. revealed on 31 October 2018 that they received JPY 75 million from KLab Venture Partners and private investors, leaving them well equipped to challenge the market.
The company set up the premium sake brand SAKE100 in June 2018. Their first product was the crowdfunded Byakkō (百光, one hundred lights?) which shot past its target to generate JPY 3.9 million.
Ikoma muses that he was probably the first person to bring sake into a presentation to venture capital funders. Most people who tried it said they wanted a share in it, and investors agreed that the sake market is about to take off. It’s a bit like the dark before the dawn, but he believes that the opportunities for sake are increasing.
There are also the concepts of high value-added and high-priced sake. Total shipments of sake hit a peak of 1.77 million kilolitres in 1973 and have been falling ever since. However, the rate of decline has tapered off in the last 10 years, and the tokutei meisho (特定名称, legal classifications) such as ginjō, junmai ginjō and junmai are even rising – shipments have increased for the last six years running.
Ikoma points out that people are no longer looking to drink in volume and get drunk, instead more and more want to drink and enjoy in small quantities. And the sake market has to adapt to this new kind of consumer by switching to high valued added sake.
The focus in recent years has been on brewers who are creating new flavours for sake, including popular kura like Dassai, Aramasa and Jikon. They represent this new age with its new consumers. Events such as sake tastings and sake bar crawls are pulling in crowds all over the country.
The junmai daiginjō-only brewer Tatenokawa pushed the milling ratio all the way down to 1% for their labour of love Kōmyō ( 光明, light/hope/the light of grace emanating from Buddhist deities, official name “Zenith” in English, mentioned in The why of Dassai). The Kokuryu brewery held the world’s first brewery auction, releasing multiple vintages of their exquisite aged Mu-ni sake to retailers for anything from hundreds of thousands to half a million yen (covered in The rise of premium sake). Looking at all of these, you can see a “premium sake” category starting to take shape.
The Sake Competition, a large Japanese contest focusing on sake on sale in the retail market, created a Super Premium category in 2016 for sake selling for over JPY 10,000 for a 720 ml bottle. There were 48 entrants in 2018. (Covered in Review of the Japanese Sake Competition 2018.)
Why are these high-priced sake appearing now? Ikoma notes that until now the main distribution channel for sake has been bars and restaurants. If they expect per-customer spend to be in the region of JPY 3,000 – 4,000, they have to buy in sake at a retail price of around JPY 3,000 per 1.8 litre bottle. And kura had no choice but to work to that requirement, brewing the best value sake they could for that dominant customer base. But the market is no longer so monolithic, with ecommerce and direct sales on the rise, and more customers who see the value in higher quality products and have no hesitation in investing in a special experience. It’s these customers that the new, higher-priced sake is being brewed for.
Read on for part two of the article!