Back to the very long but very interesting Diamond Online discussion between two Yūsukes - Yūsuke Satō, 8th head of the Aramasa brewery, and Yūsuke Asakura, author of a book on financial thinking in Japan. (You can read part one here, part two here and part three here.)
Following up on Satō's description of the decline of the sake industry after the old classification system and fixed pricing disappeared, Aramasa wonders if this was when sake got its image of cheap one cup sake.
Satō points out that jizake, despite the decline of futsūshu, tried to compete with a model that would not involve price collapse. Some alcohol retailers who were trying to differentiate themselves from supermarkets and discount stores were able to evolve into specialist jizake shops and build relationships with kuramoto. There was no discounting, the shop owners were sensitive to the kuramoto's wish to have the care and passion involved in creating the product properly explained when it was sold, and the kuramoto respected the shop owner’s wish to get into selling higher quality products and have exclusivity in their local area. That’s how the jizake distribution network formed. The wholesale group Nihon Meimonshu Kai (Japan Prestige Sake Association) were the first to gather these shops together and propose a distribution network. After that, the first kuramoto to sell directly as a distribution strategy was Asahi Shuzo, makers of Kubota, I think. And it must have been Takagi Shuzo, makers of Juyondai, who started the practice of carefully selecting shops and forming contracts.
Asakura realises that for jizake you could only get at a shop that had a contract, online sales were out of the question from the very start of this distribution network.
Satō points out that some specialist jizake shops actively try to sell online, but it’s not a major sales route yet - mainly because it breaks down their exclusive trading areas. The contract shop system works well while the sake market is in a slump. As sake becomes more popular and demand picks up, it's only natural that kuramoto will want to sell more than before.
One brewery that handled this well is Asahi Shuzo, makers of Dassai. It seems they never relied on existing jizake distribution, and their president Sakurai often said that they wouldn't become a “phantom” sake. So Dassai managed to produce enough to satisfy demand and captured a large share of the market. Of course, their resolute policy of only making junmai daiginjō and reputation as high quality sake were also part of their success. Anyway, thanks to Dassai becoming the standard for sake the overall image of sake improved, which is something to be thankful for. They succeeded in the difficult work of carrying on with an open style of sales and maintaining their brand, which shows how skilful they are.
Asakura mentions that when he tries to buy sake near where he lives he never expects much from the selection at alcohol retailers that aren't jizake specialists, or from convenience stores. Even if he goes a bit further to one of the big shopping centres, there's a good selection of wine but no sign of sake. Although cheap futsūshu and high quality jizake at first look like they’re trying to do very different things, it seems like they're actually being sold in almost the same way. Aren’t they actually focused on wholesalers and retailers instead of on the consumers who drink their sake?
Satō agrees, and stresses that there is a sense of obligation towards specialist jizake shops because they protected kuramoto when times were bad, but there’s also the risk of falling behind the times. Some things have to change, particularly in order to promote sake overseas. However, one reason for the increasing popularity of sake that cannot be overlooked is that thanks to distribution via specialist jizake shops the sake is kept in top condition. You can't always compare sake to wine, which has its own antioxidants. Limited distribution also means no price collapse and the product being brought to the consumer as it should be, which were absolutely essential when jizake was taking off.
In a wide distribution network like convenience stores or supermarkets, no-one will build up your brand for you. If the only option was to build up name recognition on TV, online or in magazines, many small or medium sakagura without financial resources would go under. That problem was neatly solved by the achievements of the contract shop system. Even if no-one had heard of a kura, if their sake was good they could get a reasonable price for it. However, the problem with this jizake distribution may be its dislike for becoming too exclusive. Most specialist jizake shops are family businesses, who think that so long as they can feed their family they don't need to do more. So long as they're stuck in this inward-focused thinking, there’s no way the sake market will grow. Right now, half of jizake is only sold in specialist shops.
Asakura wonders that even if there is obligation and emotion involved, people must think that it’s only a matter of time before that this system will have to change with the times. Satō states that the reason why popular jizake is so hard to get hold of is definitely because of limited distribution. Even for sake that costs 3,000 yen for an isshobin (1.8 L), when you can't get it you can't get it. You could also say that it would have been better if its potential value was converted to price to some extent. He often hears that one of sake’s peculiarities is its pricing. Whether a sake is well known or not, from a big or small producer, it's always around the same price. For junmai, 2,000 yen for an isshobin, for junmai ginjō, 3,000 yen. The cost of production must be different for every brewery, but the kura hold themselves back and don’t set the price too high. And for specialist jizake shops, it’s easier to sell at a low price so I think there must be many cases where they imply to the kura that that’s what they want.
Asakura muses that kura can't sell directly until they betray the jizake distribution network, even though online sale doesn't necessarily involve problems with temperature or storage. Satō replies that to be honest, he's not thinking of direct sales or wide distribution networks. Deflation has become the norm in Japan and if you go through retailers there’s no way to create a brand through some routes, especially supermarkets, discount stores, suburban department stores and convenience stores. In fact it's the opposite, they eat up brands. In a normal, healthy market you'd be able to get any product, no matter how famous, so long as you can pay for it, like wine. Sake isn't there yet.
But wine has a history of being developed as an export product, and many years of creating added value through government initiatives, particularly in the UK and France. There are sommelier associations all over the world, and specialist journalists, people who keep the conversation going. And each winery and famous production region has their own global strategy, regularly devotes massive resources to marketing, and continues to create their own brand. It must be because they can do this that not only are their products consumed but they can sell at a high price despite using wide sales routes.
Asakura comments that that level of marketing would be hard for today's sake industry. Satō adds that unfortunately, today's sake industry isn't even aware of the need for it. The industry itself has to change. Kuramoto have to stop nervously leaving their sales outlets to do everything, and instead start creating more added value. The shop owners have to recognise that being stocked in their shop is linked to the kuramoto's brand. It would be healthier if they worked together for their common benefit.
Even though bookshops are said to be dying out, people go to Tsutaya in Daikanyama because it's interesting, comments Asakura. Indeed, says Satō. And some sake shops are already changing. Even though there are risks, more and more of them are opening in high class commercial complexes. It would be good if these developments picked up speed. High value can’t be created without demand from lots of people.
That was part four of a four-part summary of an interview between Yūsuke Satō, 8th head of the Aramasa brewery, and Yūsuke Asakura, author of a book on financial thinking in Japan. Read part one here, part two here and part three here.
- Original article (Japanese, Diamond Online, 7 December 2018)
- Aramasa (Japanese, worth a look for the graphics even if you don't speak Japanese)
- Japan Prestige Sake Association (Japanese)
- Japan Prestige Sake Association (English)
- Asahi Shuzō, makers of Dassai (Japanese)
- Asahi Shuzō, makers of Dassai (English)
- Asahi Shuzō, makers of Kubota (Japanese)
- Asahi Shuzo, makers of Kubota (English)