JCBA

History

Beer first appeared in Japan in the mid 1800s, it was introduced from Europe and was consumed mainly by foreign traders and seamen. The first brewery, Spring Valley in Yokohama, was opened in 1869 by an American, William Copeland, but was taken over by the Japan Brewery Company in 1884 and four years later the brewery company combined with Meiji-ya to market Kirin Beer for the first time. The brewery still produces beer today.

Beer gained in popularity after World War II and surpassed sake as the No. 1 alcoholic drink in the 1960s. The industry was dominated by Japan’s big four brewers (Kirin, Asahi, Sapporo & Suntory) who still control 96% of the market today.

In 1994 Japan's strict alcoholic beverage tax laws were relaxed allowing smaller breweries producing 60,000 litres (15,850 gal) per year to enter the local market; before this change breweries were unable to get a license without producing at least 2 million litres (528,000 gal) per year. This led to a boom in the establishment of small breweries throughout the country, many of them linked to the traditional sake breweries. Today in excess of 200 microbreweries and brewpubs are producing beer from Okinawa to Hokkaido.

The Modern Market

There are three distinct beer markets in Japan: the national brand beer market, the local brand craft beer market, and the imported beer market.

With regards to the national brands; the four giant breweries (Asahi, Kirin, Sapporo, and Suntory) have dominated the market for many years. The main beer style brewed by these giants is a gold-colored light lager with alcohol strength around 5.0% ABV. Since 1950, the total consumption of beers from these four breweries had increased year by year in line with the tremendous economic growth witnessed in Japan. Production, however, peaked at a record 71,350,200 hl in 1994. Since then, however, production has seen a gradual decline; in 2000 only 55,214,730 hl were produced and 2005 witnessed production of just 35,605,780 hl. Consumption within Japan of these national brands has also declined (believed to be due to the depression of the economy, and an increase in people looking for a "healthier" lifestyle. During recent decade particularly, the long-pending business stagnation so oppressed the average household economy that the beer consumption at home was reducing to 53.5% (2009) from 60.1% (2001) of the total production volume.

It appears evident in the market that people who had formerly drunk the national brand beers as thirst-quenchers have switched to the lower-priced "Happoushu" (a beer-like alcohol drink with malt-ratio under 25 percent) or the lowest-priced "The Third Beer" category (a non-malt, carbonated drink with beer-like flavor and alcohol strength of 5 to 6% ABV), especially when drinking at home. Thus, the consumption of such beer-like drinks as "Happoushu" and "The Third Beer" is increasing yearly, and the four giants have shifted their main forces to production of these varieties. As a result, the "real" beer production of the four giants dropped to approximately 30,184,000 hl in 2009, less than a half of 1994 production.

In contrast to the national beer brands, the local brand craft beer market has shown strong activity although its production and consumption scale is very small in comparison, the craft beer market being a mere one percent of the national beer market. Craft beers known as "ji-biiru" (meaning "local beers") are supplied to the market by the many microbreweries scattered around throughout Japan. As of October 2010 there were 238 microbreweries spread from Hokkaido to Okinawa.

The national brands mostly produce "light lagers", however the craft beers produced by the many microbreweries are rich in variety. Pale Ales, IPAs, Brown Ales, Stouts, Porters, Old Ales, Barley Wines, Belgian Wits, Kolsches, Dusseldorfer Alts, South German Style Weizens/Weiss biers, German/Bohemian Pilsners, Munchener Helles, Munchener Dunkels, German Schwartz Beers, German Bocks, Doppel Bocks, various Fruits/Spice Beers as well as seasonal and experimental beers are among the many varieties produced. In terms of taste and flavor the Japanese craft beer market also provides many versatile choices to customers: hoppy or malty, spicy or fruity, bitter or sweet, light body or full body, low alcoholic or high alcoholic, etc.

These special characters which are not found in the national brand beers have contributed to an increasing demand and thus a dramatic raise in the production volume of craft beers; up to 340,000 hl/year (estimated figures of 2009) from 147,620 hl/year (estimate of 2003). An increase of over 100% in 6 years.

The best opportunity to customers for purchasing craft beers is currently through internet web-sites or mail-ordering systems in Japan. Approximately 41% of all craft beer production is sold online. Craft beer bars/pubs account for the consumption of around 27% of production with restaurants belonging to the microbreweries accounting for 18% of the market. Consumption both at home and on-premise is equally popular.

The third main beer market in Japan is that of the imported beers. Total imports per year stabilized at around 334,000 hl from 2000 to 2005. Among these, beers from Australia, Ireland, Mexico and Holland dominated 61.5 percent of the market with beers from Ireland (mostly Guinness) and Holland (mostly Heineken) occupying more than a quarter (28.4%). This is mainly due to the licensed production by two of the four Japanese giants: Guinness by Sapporo & Heineken by Kirin. These brands are sold not only at Sapporo and Kirin’s tied-beerhouses but also at many convenience stores throughout the country.

Another success story in the imported beer market has been beers from Belgium (though currently to a lesser extent). Thanks to its unique taste, flavor, and brand stories behind the labels, imports from Belgium jumped up to 18,666 hl/year in 2005 from 8,720 hl/year in 2000. Recent years have seen further growth in this market; many Cafés and liquor shops specializing in Belgian beers have appeared in large cities and their numbers are still increasing year by year.

The profile of consumers who enjoy imported beers today can be roughly split into three categories: people who like the beer from the country where he once visited or lived; people who think that imports have more prestigious brand images or higher quality than Japanese national brand beers; people who like beers with rich taste and flavor such as Belgian beers. To these customers and the consumers of craft beers in Japan the price they pay for their brew is not so important as the brands and quality of the product they are drinking.

Consumption

Beer related products account for approximately half of all alcoholic consumption in Japan. As the big four commercial brewers have been experiencing declining volumes over the past five years, craft beer has been experiencing an increase in popularity.

• Total beer production (excluding Happoushu & Third Category) in Japan in 2005 stood at 35,605,780 H/litres, but by 2009 it had dropped by 15% to 30,184,000 H/litres.

• Craft beer production, on the other hand, experienced a dramatic growth in volumes from 174,030 to 340,060 H/litres during the same period – an increase of over 90%.

Over the past decade the national brand beer market has shrunk considerably though still dominates the Japanese beer scene, local craft beers and imported beers, however, have witnessed considerable growth, continue to perform strongly in the high end of the market and display a strong potential for growth will into the future.

This increase in consumption and interest in craft beer has also been reflected in the attendance at the beer festivals run by the Japan Craft Beer Association. In 2005 the Great Japan Beer Festival attracted 5,500 visitors, but by 2009 this number had grown to 19,500. The 2010 festival experienced in excess of 20,000 visitors.