Japan liquor businesses turn to non-alcoholic drinks to attract Gen Z (updated)

Sapporo Breweries

12/09/2022 03:17

(Adds Sapporo low and non-alcohol beer sales in 12th
paragraph.)
    By Irene Wang and Tom Bateman
    TOKYO, Sept 12 (Reuters) - Bucking the age-old stereotype of
hard-drinking college students, Manaka Okamoto considers the
next day's schedule before cracking open an alcoholic beverage.
    "If I have to get up early, and I think 'Oh, I should hold
off on drinking,' then I go for a non-alcohol drink to get a
sense of alcohol when I'm drinking alone," Okamoto, 22, said at
a Tokyo restaurant. "And of course, when hanging out with
friends who don't drink, it's nice to have something to toast
with."  
    The popularity of low- and non-alcoholic drinks has risen
worldwide, accelerated by the pandemic, which led many people to
be more health conscious. The global market value for the
segment rose to just under $10 billion in 2021 from $7.8 billion
in 2018, according to researcher IWSR. 
    The effect has been especially pronounced in Japan, where
the population is shrinking and younger people drink far less
than in previous decades. Just 7.8% of Japanese people in their
20s were regular drinkers in 2019 compared with 20.3% of that
age group in 1999, according to government surveys. 
    Facing a steady decline in revenue from alcohol sales,
Japan's tax office in July launched a contest seeking ideas on
how to stimulate demand among younger people. 
    Japan's major drinks makers are also looking outside the
country for growth. The chief of domestic beer leader Asahi
Group Holdings told Reuters last month he saw North America as a
key market. Suntory Holdings Group is looking to expand its
canned cocktail business there.  urn:newsml:reuters.com:*:nL1N2ZU0KU  urn:newsml:reuters.com:*:nL4N2ZY1NR
    At home, the companies are coming up with new ways to
improve the bar experience for non-drinkers.
    On a recent afternoon in the entertainment district of
Roppongi, groups of mostly young women gathered at a no-alcohol
"beer garden" set up in the shadow of one of Tokyo's tallest
buildings.
    Beer gardens are a summer tradition in Japan, but this one -
promoted by Suntory and broadcaster TV Asahi - skipped the beer,
offering patrons a lineup of mocktails and non-alcohol wine
instead.  
    "Consumers are not enjoying just alcoholic beverages. We
think they value more of the communication that's generated when
drinking or would like to enjoy the atmosphere of the place
where they drink," said Suntory general manager Masako Koura. 
    Competitor Kirin Holdings Co also offers non-alcoholic
wines, cocktails and beer. The company said sales of its
booze-free beer were up more than two-fold in the three months
through June compared with a year ago. 
    Sapporo Holdings Ltd  2501.T  said domestic sales of
low-alcohol and non-alcoholic beer rose 20% in the half year
through June, while canned beer sales slid 4%.
    In Shibuya, the newly opened Sumadori Bar - a play on the
Japanese words for "smart drinking" - offers elaborate, sugary
cocktails that can be made with no alcohol or up to 3%. It
offers an environment where everyone can enjoy a drink together,
said Mizuho Kajiura, chief executive of the Asahi-led venture. 
    Kajiura worked for two years in Indonesia and said his
experience in the mostly Muslim nation gave him an appreciation
for creating hospitable environments for non-drinkers.
    "The aim of this bar is to value customers who cannot drink
so that they can happily come here with people who do drink,"
Kajiura said. "If other restaurants and bars can understand our
aim, I think they would get more customers."

 (Reporting by Irene Wang, Tom Bateman, Akiko Okamoto, and Rocky
Swift. Editing by Gerry Doyle)
 ((rocky.swift@thomsonreuters.com;))