News: Analysis: A sobering strategy for pandemic times – Japan brewers bank on alcohol-free beer boom.
TOKYO (Reuters), – Tadasu Masuda, who had severely restricted his social life as a result of the coronavirus pandemic, took the opportunity to use so-called “liver rest days” in Japan and to try a range of alcohol-free beer brands.
They tasted much better than expected, and while Masuda doesn’t skip regular beer, he’s now committed to the occasional break.
“I want to keep drinking these and make sure my liver has days off,” said the official, who lives in Kobe, western Japan, adding that he has become more health conscious since entering middle age.
The pandemic is triggering an unexpected boom in non-alcoholic beer, with Asahi Group Holdings forecasting a 20% jump in sales of non-alcoholic and low-alcohol beer this year to expand its offering.
Leading competitor Kirin Holdings, which had a head start in this category, expects sales volume in this segment to grow 23% this year after increasing 10% in 2020, and recently revamped one of its top non-alcoholic beers.
Industry officials said the extended period of time at home freed Japanese drinkers from social norms, where beers with work colleagues often order a round of the same lager for everyone – a change that has also helped boost sales of spirits and hard liquor cocktails.
With non-alcoholic beer, other factors also played a role, including constant reminders on TV and other media to help you stay healthy during the lockdown, and a chance overlap with what executives called taste enhancements. Alcohol-free beers have often been described as too yeasty, watery, or sweet.
The boom was a rare trigger for a 3.3 trillion yen ($ 30 billion) industry in which demand declined as the Japanese population ages and as wine and other alcoholic beverages grew in popularity.
In fact, Japan’s beer consumption has more than halved in the past two decades, and the pandemic has exacerbated the pain as restaurants and bars have been forced to close prematurely.
Asahi’s total beer sales, dominated by the flagship Super Dry brand in bars, fell 16% last year. At Kirin, which has a larger range of beer, sales volume fell by 5%.
A second state of emergency, which was imposed this year, applies until March 21st to Tokyo and its environs, where 30% of the Japanese live.
Alcohol-free beer is increasingly available in many countries as Anheuser-Busch InBev and Heineken have launched versions of well-known lagers such as Budweiser and Stella Artois in recent years.
While alcohol-free beer is estimated to make up only 1% of total beer sales worldwide, rapid growth is forecast. According to a forecast by Global Market Insights in January, the global market could grow to $ 29 billion in 2026, up 65% from 2019.
However, Japan’s pandemic-induced trend has surprised many in the industry as the segment hadn’t gained ground for a long time. Sales of non-alcoholic and low-alcohol beer accounted for less than 5% of all Japanese beer sales in 2019, well below 20% in Australia and 12% in Germany, according to Euromonitor.
Like other industry leaders, said Takeshi Niinami, CEO of Suntory, brewers have made strides to bring the taste of non-alcoholic beer closer to regular beer.
To do this, they have worked to reduce artificial flavors and sweeteners that are used to simulate the flavors produced by regular fermentation. Some have also used manufacturing processes that allow for a gentler removal of alcohol, thereby preserving the taste of beer.
“Of course there’s the health aspect … but it wasn’t until the taste improved that people really reacted,” he said at a recent event in which he outlined the company’s strategy.
For example, Asahi’s 0.5% “Beery” uses the slower alcohol extraction method and is said to have more “umami and wealth” than other beers alternatives.
It hits the market later this month, but the ad campaign started before it went on sale – rare treatment for the niche category. Asahi plans to add more low-alcohol and non-alcoholic beer products this year and intends to triple the number of products in this segment by 2025.
Kirin launched its non-alcoholic “Green’s Free” beer at the end of February and marketed it with high-quality malt and barley as well as hops from Nelson Sauvin, which give ales an aromatic kick. Suntory recently updated its non-alcoholic, calorie-free beer “All Free” with a new recipe.
Kazuo Matsuyama, director of marketing for Asahi’s domestic beer business, said the dwindling appeal of regular beer means it is time to look beyond the company’s core clientele of lager-loving men.
“So far, of the broader population of 80 million in their twenties to sixties, we’ve been targeting the 20 million people who enjoy drinking every day,” he said. “But we have to look at others now.”
($ 1 = 108.5000 yen)
Reporting by Ritsuko Ando; Additional coverage by Phil Blenkinsop; Arrangement by Edwina Gibbs
Original Source © Reuters