In 1996 when Japan lowered the minimum production mandate to 60,000 litres (from the previous 2 million litres that helped keep the industry leaders entrenched) smaller domestic brewers began to pop up around the country and with it the widening of the taste for craft beer.
As the market appeal for smaller, independent or unique beers expands it presents new opportunities to both domestic Japanese brewers and international companies prepared to navigate Japan’s alcohol market.
Twenty years ago there were very few brewers but with the deregulation came new entrants. Some of these have gone onto become established brands with many of them now looking at growing internationally in part due to the highly competitive craft beer market. A significant number of breweries have an on-premises bar, and some bars have expanded to add a microbrewery to their premise.
Taxes for beer in Japan are some of the highest in the world with a tax of ¥220 per litre (compared with approximately $1.50 in Australia (¥115). This adds a substantial cost to the price of a standard drink. Japan doesn’t have a customs duty for imported beer so this evens the playing field for international brands looking for slice of the Japanese beer market.
For international craft brewers two key pieces need to be put in place for successful export market development in Japan: distribution and marketing. Finding a distributor or distributors willing to help build the sales channels is a pivotal component of market entry. Given Japan’s geographic area and population spread Japan isn’t a single homogeneous market. Once the distribution angle is covered the brand building and marketing can ramp up. Japan’s advertising laws aren’t nearly as restrictive as many western nations it allows for a rethink on advertising. With that in mind, the Japanese culture is something many western brands struggle to reconcile.
As the craft beer market in Japan evolves, expect to see many new domestic and international entrants into the market and creative way of marketing those products to the ever increasingly sophisticated Japanese beer tastes.