The Diamond Online site has a three-part interview with maverick Japanese businessman Takafumi Horie, and in the last section he talks about a personal project – selling sake for more.
Horie asserts that sake is extremely cheap at the moment, and asks the interviewer how much he thinks a 4-gō (720 ml) bottle of the finest junmai daiginjō sells for.
They guess about JPY 5,000. Horie agrees, saying that’s around the upper limit.
He then says to equate the 720 ml bottle of sake with a 750 ml bottle of wine. What would the interviewer expect from a JPY 5,000 bottle of wine? Not much, they admit, it wouldn’t be a high grade one. Horie agrees again, pointing out that in the worst case that kind of wine would find itself on sale in a convenience store. And yet the best sake sells for the same amount, leading him to believe that it’s seriously underpriced.
Horie continues to say that this mistaken pricing is part of the current worldwide interest in sake, such as its inclusion since 2007 in the International Wine Challenge (IWC) and the publishing of a “points” rating book for sake based on the system used by wine critic Robert Parker. As a businessman, he sees this as a sign that sake is currently seriously undervalued, and that investing in it now will be a good choice as any investment will definitely appreciate.
Asked by the interviewer if sake is really being more widely accepted around the world, Horie asserts that it is and he’s going to take advantage of this trend by trying to sell it at higher prices, for example holding a premium auction. He expects it to allow him to sell sake for very high prices. He himself buys wine at premium auctions in Napa Valley every year, where each winery puts one full, one half and one quarter barrel up for bidding. High prices in this auction are thought to influence the market price of the wine, thereby pushing up the price of retail bottles. The key here is branding, Horie claims, something sake is capable of.
The interviewer then asks about this approach in terms of “blue ocean” strategy (picking an area with little competition, or inventing a new one). Two elements of that theory are functional orientation and sensual orientation, so instead of relying on the taste or health benefits [no sources cited, needless to say] of sake Horie’s approach would instead focus on managing the brand to evoke certain emotions as a future driver of value. They comment that where it’s hard to differentiate from other products or services based on functionality, brand management is critical. (They then move on to talk about whether Horie himself has become a brand.)
I agree that it’s interesting to compare prices of sake and wine, but at the same time they didn’t seem to try to factor in the costs that will make any wine more expensive in Japan (transport, taxes) just as they make sake more expensive outside of Japan. There is domestic wine production in Japan, but I don’t think it makes up a lot of the market.
In that case if they’re comparing imported wine with domestic sake, what about the other way around? I had a quick look and a 720 ml bottle of junmai daiginjō here sells for an average of CHF 92.60 which is about JPY 10,500 (sampled three online stores, 35 bottles). There was one bottle listed for CHF 527.35 (JPY 59,740), not sure if that’s a mistake but I left it out of the calculation! Other than that, the most expensive bottle was CHF 190 (JPY 21,500), and the least expensive around CHF 45 (JPY 5,100) for something from a larger brewery like Ninki Shuzō.
So, interesting point but a bit poorly researched for a famous businessman?
- Original article (Japanese, Diamond Online, 10 September 2018)
- The International Wine Challenge (IWC) (English)
- Parker Points for sake article in the Financial Times by Leo Lewis (English, 2 September 2016)
- Parker Points for sake article in the Japan Times by Melinda Joe (English, 7 October 2016)
- Blue Ocean Strategy explanation on the website of the book (English)
Sites used to price sake in Switzerland