Spirits in Japan

PROSPECTS

Whiskies stands out

Whiskies was the standout category in spirits at the end of the review period. The category’s strong growth has been spurred by the ongoing fashion for highballs - which has extended from Japanese whisky to other types, including bourbon and Scotch whiskies - in both on-trade and off-trade channels.

Potential in highballs and craft

Beyond whiskies, only tequila (and mezcal) and gin registered volume growth in 2018, and this is also expected to be the case over the forecast period. With whiskies requiring years of ageing, the faster production cycle of tequila and gin has enabled them to tap into the strong demand for highballs initially driven by the whiskies category.

Difficult times for dominant category

Shochu/soju, a traditional local spirit distilled from barley, rice or sweet potatoes, continued to dominate overall spirits volumes at the end of the review period. However, the category is set to see ongoing volume decline over the forecast period as it continues to suffer from the ageing of its core consumer base.

COMPETITIVE LANDSCAPE

Leaders targeting key mixed drink trends

Suntory Spirits extended its lead over Takara Shuzo in overall spirits in 2018. The leader continued to benefit from the boost the highball trend is giving to its core whiskies brands, which include Kakubin, Jim Beam, Torys Classic and Maker’s Mark.

Tapping into the craft trend

The emergence of Kiuchi Shuzo’s Nukada Distillery suggests that the craft trend may attract a growing number of smaller players to enter spirits. The company’s new Yasato Distillery will be strongly focused on craft-orientated demand.

A way forward for shochu producers?

The craft trend also offers a potential way forward for shochu/soju producers. The rapid expansion of Japanese craft gin has been driven by companies with a grounding in traditional areas such as shochu/soju.

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