Business / Economy | 'SUMMER DAVOS' SPECIAL 2014

Blazing a trail for Japanese sake in China

by Makiko Itoh

Special To The Japan Times

Masato Nakatani is the sixth-generation head of Nakatani Brewing Co. in Nara Prefecture, and one of the most outstanding figures involved in developing the worldwide sake market. Nineteen years ago, Nakatani began brewing sake in Tianjin, China, and the high-quality “Asaka” sake enjoys nearly the top share of China’s sake market. As a representative example of sake, Asaka will be served at the Japan Night event, part of the World Economic Forum Annual Meeting of New Champions to be held from Sept. 10 to 12 in Tianjin, China.

Q1. Can you tell us why you wanted to make sake in China?

When the toji, or sake brewing master, of Nakatani Brewing Co. came over in the autumn of 1994 to discuss the sake brewing season, which begins in autumn and ends in spring, I heard that there were sake makers in China from him.

I had left a trading company, Kanematsu Corp., the previous year and although I was studying for the bar exam, I became interested in making sake in China. My job at Kanematsu was helping Japanese manufacturers build factories overseas and I thought I could use the experience. Also, I thought I could be successful in the sake industry that was in a slump at the time.

An optimal place to make sake in China would be a place with high-quality rice and cold winters. While scouting locations, I met Li Hengqi, the manager of the city of Tianjin’s office in Osaka and decided to make sake in Tianjin.

In January 1995, I established Tianjin Nakatani Brewing Co. and began preparing to brew sake. Li resigned from the Tianjin government and became vice president of Tianjin Nakatani Brewing.

Q2. Can you tell us about the difficulties you encountered in making sake and operating a company overseas? How did you overcome them?

If I had created a joint venture with a Chinese company, I would have been forced to hire employees accustomed to working for state-run companies under the communist system. To avoid that, I established Tianjin Nakatani Brewing as an affiliated company of a 100-percent foreign-capital company.

In order to counter the poor reputation of Chinese products, I decided to brew pure-rice ginjo sake, a type brewed with particular care.

As there were no veteran sake brewers in China, I set up a system to manage the company with specific numerical instructions and brought in the latest equipment from Japan to support such a system.

There were no trustworthy wholesalers in China, which has only recently begun shifting from communism to capitalism. To get around this, I established sales offices in Beijing, Dalian, Shanghai, Guangzhou and other cities. In other words, I created my company’s own sales channels.

Q3. How did you promote sake to Chinese people? How are sales in China? How about the reputation in China?

Sake in China is mainly consumed in Japanese restaurants. Our main sales activity is to sell Asaka sake produced by Tianjin Nakatani Brewing. The penetration ratio of Asaka in Japanese restaurants is the best advertisement. Besides restaurants, supermarkets and department stores, including Aeon, and online shops are also sales channels.

My company accounts for a quarter of the sake market in China, while Japanese imports account for another quarter.

The brewery in Tianjin has a wholesale subsidiary, which imports “Naragin” sake from Nakatani Brewing Co. in Japan, as well as sake from other breweries such as “Hakushika” sake from Nada, Hyogo Prefecture; “Nikaido” shochu (distilled sake) from Oita Prefecture; and “Satsuma Muso” and “Kikaijima” shochu from Kagoshima Prefecture. Tianjin Nakatani Brewing is the exclusive distributor of the four brands in China.

Q4. What is your goal?

Since there are no specific manufacturing standards for sake in China some manufacturers are selling synthetic sake as pure sake. Because the cost of synthetic sake is low, they can sell it cheaper than pure sake. Although synthetic sake is gaining market share in China, I’m not going to give up, and I’m going to continue to spread genuine sake, especially junmaishu (pure rice sake), made to Japanese standards, in China.

Q5. Since washoku traditional Japanese cuisine has been added to UNESCO’s Intangible Cultural Heritage list, many breweries would wish to expand sake consumption abroad. However, at the same time, they don’t have the know-how to do that effectively. Do you have any advice for those breweries?

I know many highly motivated sake breweries have already exported their products and it may be too late for breweries to try to export now because most trading companies and local retailers are satisfied with existing products.

Taking “Dassai,” one of the most well-known and popular sake brands from Yamaguchi Prefecture, as an example, it proved effective to make it better known in Tokyo, then pitch to trading companies and local retailers. Even if a brand of sake is picked up once, there’s no guarantee lesser-known ones will get repeat business. Although continuous sales activities in local areas are indispensable, there are not many sake manufacturers with the time and money to spend on those activities.

Nakatani Brewing Co. worked on exporting 18 years ago, and now our exports account for 40 percent of our business, which, I believe is the highest ratio among Japanese sake breweries. I think it’s safe to say that it’s always better to be at the forefront in business.

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