Japan's biggest brewer Asahi trying to attract sober Generation Z
In what ways is Asahi expanding its market presence internationally, and what role does this strategy play in its overall business growth?
Asahi, Japan's largest brewer, is expanding its market presence internationally by pushing its non-alcoholic and low alcohol offerings outside of its home market. The company aims to double the share of beverages with zero or low alcohol to 20% of its overall beverage sales by 2030. Asahi's main growth opportunities are overseas, as the Japanese market is shrinking due to an aging population and falling birth rates. More than half of Asahi's sales are currently generated outside Japan, and the company has been expanding rapidly abroad for the past 15 years. One major market Asahi has yet to tap is the US, where the popularity of alcohol-free beer is not as widespread as in Japan. The company's strategy to appeal to non-drinkers and the sober Generation Z is to collect data and develop products that cater to their preferences. Overall, Asahi's international expansion strategy plays a crucial role in its business growth, allowing it to tap into new markets, attract a wider customer base, and stay relevant amid changing consumer preferences.
What strategies has Asahi Group Holdings implemented to appeal to the sober preferences of Gen Z?
Asahi Group Holdings has implemented several strategies to appeal to the sober preferences of Gen Z. Firstly, they have recognized the trend of younger people choosing not to drink as much alcohol and have adjusted their product offerings accordingly. They plan to double the share of beverages with zero or low alcohol to 20% of their overall beverage sales by 2030. This includes alcohol-free beer and drinks with less than 3.5% alcohol. These products are already popular in the Japanese market, where alcohol-free beers account for 10% of Asahi's beverage sales as people avoid drink driving.
Secondly, Asahi is expanding its non-alcoholic and low alcohol offerings outside of its home market, targeting overseas markets for growth opportunities. This is due to the shrinking Japanese market caused by an aging population and falling birth rates.
Lastly, Asahi has realized the importance of understanding the preferences of non-drinkers and is collecting data in Japan by asking those who cannot or choose not to drink alcohol to understand what kind of products they want. This shift in focus aims to help the company better appeal to the sober preferences of Gen Z and adapt to changing market demands.
How significant is the decline in alcohol tax revenue in Japan, and what measures have the authorities taken to counteract this trend?
The decline in alcohol tax revenue in Japan is significant and has been ongoing for decades. In 1980, alcohol tax accounted for 5% of Japan's total tax revenue, but by 2020, it had dropped to just 1.7%. This decline has been attributed to a combination of factors, including Japan's aging population, falling birth rates, and younger generations choosing not to drink as much alcohol.
To counteract this trend, Japanese authorities launched a national competition named "Sake Viva!" in 2022. The contest aimed to encourage young adults to consume more alcohol and submit business plans to revitalize the alcohol industry. It was open to people aged 20 to 39, with submissions focusing on promoting alcohol consumption and boosting the industry. The contest received nearly 300 proposals, and the winning idea was a sustainable gin made using local ingredients. Another proposal suggested incorporating a small amount of alcohol into various dishes.
However, the campaign has faced criticism, with concerns about promoting an unhealthy habit and the potential erosion of public trust in the government as a promoter of healthy social behavior. Despite this, the National Tax Agency commended the creative approach to tax policymaking in an attempt to increase alcohol consumption and excise tax collections.