Japanese brewers will release a record lineup of canned cocktails this summer as fizzy concoctions come to the fore in efforts to offset a decade of declining beer sales.
Brewers such as Kirin Holdings Co. Ltd. have long tried to retain drinkers by making cheaper beerlike beverages. But changing tastes among Japan’s youth have seen near-beer giving up fridge space to highballs, white-wine spritzers and pineapple-flavored rum cocktails.
These so-called ready-to-drink cocktails, like the cheapest beerlike drinks, fall into a low-tax category of Japan’s complex liquor tax regime and can be priced far less than traditional tipples.
This has helped them become the top introduction to alcohol among twenty-somethings, a survey by brewer Suntory Holdings Ltd. shows.
In response to rising popularity, Suntory plans to release a record 23 canned cocktail products from June to August versus 17 last year. Asahi Group Holdings launched a hot seller in May, and Kirin announced a new range in June.
The increased choice means “this will be an important summer to further boost demand in RTDs,” Suntory Managing Director Shinji Yamada said, referring to ready-to-drink products.
Demand is likely to be so strong that Suntory plans to raise output for its Strong Zero series of canned cocktails by 10 percent this summer, and may increase production capacity next summer, Yamada said.
The ready-to-drink cocktail market has almost doubled since 2001, whereas traditional beer sales have nearly halved, data from Suntory shows.
Sales of beer have slimmed as once-universal drinking binges among office workers go out of fashion and Japan’s increasingly health-conscious younger generations develop a taste for drinks containing fewer calories.
Brewers have tried to stem the decline by lowering prices. By reducing the malt content, they created brewed quasi-beers which could be priced less because they qualified for lower tax rates.
In Japan, beer is taxed based on malt content. The lowest-taxed products — dubbed “third-sector beer” — are made with little malt or malt substitutes. In contrast, distilled spirits such as vodka are taxed at higher rates based on alcohol content.
Due to a peculiarity in Japan’s decades-old tax regime, however, ready-to-drink cocktails are taxed at the same rate as third-sector beer, provided the alcohol content does not exceed 9 percent, giving the drinks the appeal of both variety and price.
Suntory’s Strong Zero vodka tonic, for instance, is priced at ¥152 for a 350-ml can, compared with ¥260 for its The Premium Malt’s beer.
This year, ready-to-drink sales are likely to grow 3 percent to 13 million cases compared with a 1 percent drop in beer, Suntory said. The brewer, which controls more than a third of the market, aims for ready-to-drink growth of 3.8 percent.
On the heels of Suntory is Kirin, which is looking to grow its ready-to-drink business by 8.4 percent this year with the help of its new Bitters line.
Late-comer Asahi stormed the market in May in the quickest-growing category of “strong” ready-mixed drinks, where alcohol content is at least 8 percent. The brewer aims to ship 2.5 million cases of a highball made with the local distilled spirit “shochu” by the close of 2014.
“We sold 450,000 cases by the end of May,” an Asahi spokesman said. “So we’re off to a good start.”