HomeBusinessJapanese beverage companies are turning to non-alcoholic drinks for Gen Z. ...

Japanese beverage companies are turning to non-alcoholic drinks for Gen Z. to attract

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TOKYO, Sept. 12 (Reuters) – Manaka Okamoto ignores the age-old stereotype of hard-drinking college students and considers the next day’s schedule before cracking open an alcoholic drink.

“If I have to get up early and I’m like, ‘Oh, I need to stop drinking,’ then I go for a non-alcoholic drink to get a sense of alcohol when I drink alone,” Okamoto, 22, said at a restaurant in Tokyo. “And of course, when you hang out with friends who don’t drink, it’s nice to have something to toast with.”

The popularity of low-alcohol and non-alcoholic drinks has soared worldwide, accelerated by the pandemic, making many people more aware of their health. According to researcher IWSR, the global market value for the segment rose to just under $10 billion in 2021, from $7.8 billion in 2018.

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The effect is particularly pronounced in Japan, where the population is shrinking and young people are drinking much less than in previous decades. According to government surveys, only 7.8% of Japanese in their 20s were regular drinkers in 2019, compared to 20.3% of that age group in 1999.

Faced with a steady decline in revenue from alcohol sales, Japan’s tax office launched a competition in July to gather ideas on how to boost demand among young people.

Japan’s major beverage companies are also looking for growth outside the country. The head of domestic beer leader Asahi Group Holdings told Reuters last month that he saw North America as an important market. Suntory Holdings Group is looking to expand its cocktail canning business there. read more

At home, the companies are inventing new ways to improve the bar experience for non-drinkers.

On a recent afternoon in the Roppongi entertainment district, groups of mostly young women gathered in an alcohol-free “beer garden” in the shadow of one of Tokyo’s tallest buildings.

Beer gardens are a summertime tradition in Japan, but this one — promoted by Suntory and broadcaster TV Asahi — skipped beer and offered a range of mocktails and non-alcoholic wine instead.

“Consumers don’t just enjoy alcoholic beverages. We think they value the communication generated while drinking or enjoy the atmosphere of the place where they drink,” said Masako Koura, general manager of Suntory.

Competitor Kirin Holdings Co also offers non-alcoholic wines, cocktails and beer. The company said sales of its liquor-free beer in the three months through June were more than twice as high as a year ago.

Sapporo Holdings Ltd (2501.T) said domestic sales of low-alcohol and non-alcoholic beer increased 20% in the half-year to June, while canned beer sales fell 4%.

In Shibuya, the recently opened Sumadori Bar – a play on the Japanese words for “smart drink” – offers elaborate, sugary cocktails that can be made without alcohol or up to 3%. It provides an environment where everyone can enjoy a drink together, said Mizuho Kajiura, chief executive of the Asahi-led company.

Kajiura spent two years in Indonesia and said his experience in the predominantly Muslim country gave him an appreciation for creating welcoming environments for non-drinkers.

“The purpose of this bar is to value customers who can’t drink so that they can happily come here with people who do drink,” Kajiura said. “If other restaurants and bars can understand our purpose, I think they would get more customers.”

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Reporting by Irene Wang, Tom Bateman, Akiko Okamoto and Rocky Swift. Editing by Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

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