Asahi fully enters battle for share of premium beer segment

Thank heaven, Japan’s brewers are finally showing some sense. The nation’s main brewers are trying to increase sales of premium beer over cheap quasi-beer, after years of focusing on “third-segment” beers, known for their low to no malt contents.

True, the beer market has been in decline for longer than most can remember and consumers have proven reluctant to spend on proper – that’s malt-based – beers. But even so, leaving a dire economy aside, how did the oligopoly brewers Asahi, Kirin, Sapporo and Suntory think they could attract consumers to the category for as long as they put all their efforts behind the cheaper stuff and only hesitantly pushed premium beers?

Last year, it seems they had a change of heart. Asahi, the brewer of the top-selling brand Asahi Super Dry, announced in December 2013 that it would turn its previously seasonal Asahi Dry Premium into an all-year-round brand, raising its alcohol content to 6 percent ABV.

It will be launched in mid-February 2014 in cans of 350 ml or 500 ml. The 350 ml can is expected to have a price tag of around 250 yen (USD 2.41), 16 percent higher than that of Asahi’s signature Super Dry, it was reported. Sales expectations are modest. Asahi Super Dry boasts sales of 100 million cases annually, while Asahi aims to sell 3.2 million cases a year of the premium version.

With annual sales of about 27 million cases, high-end beers account for roughly 10 percent of Japan’s beer market, according to Asahi. Even though the consumption tax is set to go up, demand for products with added value is potentially strong.

Sales of beer and beer-like beverages in Japan are heading for another year of decline in 2013, with the lower-taxed non-malt brews, which had propped up demand, seeing their growth slowing to just 2 percent, media report. Only the high-end segment is enjoying robust growth, forecast at 7 to10 percent in 2014.

With Asahi’s year-round presence, competition in the premium segment is likely to heat up. Suntory seeks to maintain the momentum of its entry, The Premium Malt’s, by upping its marketing spend. Sapporo saw sales of its Yebisu edge up slightly in 2013, the first increase in three years, observers say. Kirin aims to double sales of Grand Kirin, sold only at convenience stores, this year.