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Japanese liquor companies turn to soft drinks to appeal to Generation Z By Reuters


© Reuters. Customers drink alcohol-free cocktails during a photo at Sumadori Bar in Tokyo, Japan September 2, 2022. REUTERS/Kim Kyung-Hoon


Irene Wang and Tom Bateman

TOKYO (Reuters) – Bucking the age-old stereotype of heavy-drinking college students, Monaco Akamoto looks over the next day’s schedule before downing an alcoholic drink.

“If I have to get up early and I think, ‘Oh, I should not drink,’ then I drink a soft drink to feel the alcohol when I’m drinking alone,” Akamoto, 22, said at a Tokyo restaurant. “And of course, when you’re hanging out with friends who don’t drink, it’s nice to have something to toast to.”

The popularity of low-alcohol and non-alcoholic drinks has increased worldwide thanks to the pandemic, which has made many people more health-conscious. According to researcher IWSR, the segment’s global market value will grow to just under $10 billion in 2021 from $7.8 billion in 2018.

The effect has been particularly pronounced in Japan, where the elderly population – which tends to drink more – is shrinking rapidly. According to government surveys, only 7.8% of Japanese in their 20s regularly drank alcohol 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 authorities launched a competition in July to find ideas on how to stimulate demand among young people.

Major beverage manufacturers in Japan are also looking for growth opportunities outside the country. The head of domestic beer leader Asahi Group Holdings told Reuters last month that he sees North America as a key market. Suntory Holdings Group is looking to expand its canned cocktail business there.

At home, companies are coming up with new ways to improve bars for non-drinkers.

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

Beer gardens are a summer tradition in Japan, but this one, promoted by Suntory and broadcaster TV Asahi, has skipped the beer, offering patrons a lineup of soft drinks and non-alcoholic wine.

“Consumers enjoy more than just alcoholic beverages. We believe that they value more the communication that occurs while drinking, or want to enjoy the atmosphere of the place where they drink,” said Suntory General Manager Masako Kura.

Competitor Kirin Holdings Co also offers non-alcoholic wines, cocktails and beer. The company said sales of its draft beer more than doubled in the three months to June compared with last year.

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

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

“The goal of this bar is to appreciate customers who can’t drink so they can enjoy coming here with people who drink,” Cajiura said. “If other restaurants and bars understand our purpose, I think they will get more customers.”

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