A New Tradition: Non-Alcoholic Beer in Japan

Japan is the seventh largest beer consuming nation in the world with considerably more beer drunk than sake, that Japanese tipple often associated with evening office sessions sending Japanese salarymen staggering home late into the night. But times are changing, and the taste for non-alcoholic beer in Japan is arising. Terrie Lloyd, Asian Insiders partner in Japan explores this further.

Beer has been brewed in Japan since the 1870’s and has been the most widely consumed alcoholic beverage in Japan since then. Anyone who has spent time in Japan will have memories of social or professional drinking, often to considerable excess. Japanese brands such as Sapporo, Asahi, Suntory and Kirin are popular due to their use of rice rather than grains, allowing a lighter malt.

Domestic consumption of industrially produced beer reached a high in the 1990’s but volumes consumed have declined steadily since. There are various economic and social factors behind this and significant amongst these has been changing drinking and lifestyle preferences amongst younger people. The new generation of young Japanese, more liberated than their elders, are less inclined towards the late-night boss and client drinking sessions. Non-alcoholic beer in Japan has become one of the fastest growing segments within the broader non-alcoholic beverage industry. In 2023, this market is estimated to be worth approximately USD 1.5 billion and is expected to grow to approximately USD 3.2 billion by 2030.

Several factors are contributing to this growth:

  • Health and Wellness: Japanese consumers are increasingly health-conscious and seeking healthier alternatives to industrial beer. Non-alcoholic beers in Japan offer the traditional taste of beer without the alcohol content and calories.
  • Shifting Demographics: The aging population in Japan is driving a demand for healthier beverages, including non-alcoholic beer.
  • Changing Drinking Habits: Younger generations are drinking less alcohol overall and are looking for non-alcoholic options that allow them to socialize and participate in alcohol-free activities.
  • Premium Options: Consumers are willing to pay more for premium non-alcoholic beers that offer a superior taste experience and use higher-quality ingredients.
  • The Pandemic: More time spent at home liberated Japanese from drinking customs that often-required people to all drink the same rounds. People were able to order online and develop preferences for alternatives, often non-alcoholic ones.

Further, as this market develops various trends are shaping the future of non-alcoholic beer in Japan:

  • Increased Variety and Flavour Innovation: Non-alcoholic beers in Japan are expanding their offerings to include a wider variety of styles, flavours, and brewing techniques. These include low-calorie, gluten-free and craft-style beers.
  • Functional Benefits: Non-alcoholic beers are being infused with added vitamins, minerals, and other useful ingredients to appeal to health-conscious consumers.
  • Premiumisation and Craft Beer: Craft breweries are entering the non-alcoholic beer market, offering small-batch, high-quality beers with unique flavour profiles.
  • Focus on Sustainability: Consumers are increasingly interested in sustainable products. Brands are responding by using recycled materials in their packaging and sourcing ingredients from sustainable sources.
  • Evolving Retail Landscape: The growth of online shopping and specialty stores dedicated to non-alcoholic beverages is making it easier for consumers to find and purchase their preferred brands.

According to Suntory Holdings, Japan’s largest beverage company, the non-alcoholic beer market was estimated at 42 million cases in 2022, a record high and 15 percent up on the previous year. Meanwhile, the proportion of people who have consumed non-alcoholic beers at home has been steadily increasing each year, reaching over 77% in 2022, also an all-time high. Of those, 38% reported drinking such beverages “once a month or more” and 22% reported drinking “once a week or more” both up from the previous year.

Are there opportunities for foreign brands in non-alcoholic beer in Japan? While global beer brands have long had a presence in Japan and many of these have long standing low and non-alcohol options, they are still new to this segment in Japan. Heineken has only just launched its Heineken 0.0 product in October 2023, despite already being present in well over 100 other countries since its launch in 2017. While Japanese consumers have developed an interest in craft beers, often American as well as from Europe, Australia and New Zealand, these have been slow to recognise the looming strength of the low or non-alcoholic segment. Japanese consumers, especially younger drinkers are open to innovation, fresh social experiences around drinking culture and those that can develop tie-ins with events, festivals and large scale community activities will find a ready market in lovers of non-alcoholic beer in Japan.

Asian Insiders offers professional support and experience when approaching the market for non-alcoholic beer in Japan. We are available to discuss business opportunities for food and beverage in Japan with interested clients. For a no obligation call to discuss this please contact Managing Partner Jari Hietala: jari.hietala(at)asianinsiders.com or Terrie Lloyd, Japan Partner: terrie.lloyd(at)asianinsiders.com

#asianinsiders #foreignmarketentry #f&bjapan #beveragejapan #nonalcoholicjapan

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