October 8, 2008

Brewers Eye ‘Youth Beer’

By Blecken, David

Japanese beer brands are introducing youth-friendly drinks to win back demand TOKYO In an effort to counter dwindling demand for beer among Japanese consumers, two of the market's largest brewers are planning to introduce an updated version of the drink modified to appeal to a younger audience.

Kirin is to launch Kirin Smooth, a low-gas beer with just four per cent alcohol that is designed to taste less bitter than more traditional Japanese lagers.

The beverage will reportedly be tested by young workers within the company, in light of findings by Kirin that many consumers in the youth sector are discouraged from drinking beer by its perceived harsh flavour.

In response, rival Asahi has developed a nev/happoshu (a widely available beer alternative which, although alcoholic, avoids Japan's high beer tax by having a low malt content). Containing ginger extract, Asahi Ginger Draft will also be positioned as a sweeter alternative to beer in its regular form.

Apart from an aversion to the typical taste of beer among young drinkers, Dentsu spokesperson Yukihiro Oguchi suggested that a change in youth lifestyle,combined with a well publicised declining population and growing 'silver' contingent, is necessitating the introduction of ne w products.

Greater attention to health is seeing an increasing number of young people abstain from drinking alcohol altogether, while wine and spirits are rising in popularity among consumers looking for a cheaper, more adventurous or less fattening alternative to the usual lager.

"Japanese beer manufacturers are working hard to cultivate marketing opportunities, even niches, to cope with the situation," Oguchi said.

Other initiatives from Kirin have included Kirin Zero, a sugar- free happoshu aimed at the health-conscious, while all major brewers produce a range of fruit-flavoured alcoholic cocktails, or chu-hi.

According to a recent report by CLSA, while beer is likely to remain the most popular alcoholic drink in Japan for the foreseeable future, total consumption in terms of volume and value will continue to decline, with the market predicted to shrink by two to three per cent annually over the coming three years.

In view of this, it is unsurprising that all Japan's major beer producers, including Sapporo and Suntory along with Kirin and Asahi, are turning their attention to China, the world's largest and fastest-growing beer market. But CLSA research indicates that late entry to a party increasingly dominated by global giants InBev, SAB Miller and Anheuser-Busch, as well as low prices, count against China as a viable profit-making option to offset difficult times at home.

Instead, the report indicates that the most viable means of growth is diversification away from beer.

Kirin in particular is establishingitself as an Asia-Pacific food, drink and drugs conglomerate, having acquired Australian dairy giant National Foods and domestic chemical firm Kyowa Hakko.

Kinn... youth-friendly drinks include fruit-flavoured cocktails

Copyright Haymarket Business Publications Ltd. Sep 4, 2008

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