Third beer in Japan

Competition escalates with entry of "third" beer

A Beer, Buddy? New "beer" types intensify competition. With a new beer variation dubbed "the third beer," beer makers brace for yet another round of competition. The summer kicks off with renewed advertising promotions highlighting the new beer on the block that features even lower malt content than the low-malt beers introduced just a few years ago.

1. Alcohol Beverage Market

Mainstay Japanese brewers Asahi and Kirin have entered the market with a new "third beer," following on the heels of similar product introductions by Suntory and Sapporo. There is an on-going boom in distilled Shochu products (clear drinks distilled from potatoes and other vegetables and with alcoholic content of around 25%). This non-beer consumer interest has traditional beer makers scrambling for new ways and products to attract thirsty consumers. JMR conducted an internet research survey of its registered monitor database to find out the current state of beer drinking affairs. Next, let's look at the competition situation in the alcohol market and its customers' characteristics in the different alcohol beverage categories.
According to our internet research survey, among drinkers including those drinking at home and drinking at restaurants and bars, the 3 most popular alcohol beverages of respondents in a recent month were as follows (percentage of those favoring a particular type):

1. Beer                             73.8%
2. Low-malt beer      61.7%
3. Wine                             50.6%

However, among people who, on average, drink more than 3 times in a week, the top 3 alcohol beverage were all in the beer category:

1. Low-malt beer             73.8%
2. Beer                           61.7%
3. Third beer 50.6%

Based on the same recent survey month, consumers' preference for beer was the highest. However, among frequent alcohol drinkers who drink averagely more than 3 times in a week, the percentage of those preferring regular, full-malt content beer drinking narrowly lost out to drinkers of low-malt beer.

2. Competition among alcohol makers

In comparing the change in drinking frequency over a recent 12-month period, the following trends were found. Drinkers favoring the new "third beer" drink showed the greatest difference between those who increased consumption of "third beer," compared to those who decreased consumption of "third beer" drinks (see Chart). At the bottom of the chart were those who drink whiskey: people in this category overwhelming decreased consumption of whiskey so that the margin of difference between increased whiskey consumption group and decreased consumption group was -30.4%. The kinds of alcohol beverage that people increased drinking frequency were:

1. The Third Beer                                      27.6%
2. Low-malt Beer                 23.1%
3. Canned Chuhai & canned cocktail       9.3%

Since the third beer and low-malt beer are new categories, it is not surprising that the drinking frequency has increased compared to when the product was less available. On the other hand, the top 3 categories that people reduced drinking were:

1. Beer                         37.5%
2. Cocktail                    35.0%
3. Japanese sake       34.6%

Traditionally-brewed beers lost customers to the "third beer" and low-malt beer categories. Meanwhile, some Japanese sake drinkers switched to Shochu drinks. We noted the tendency of consumers to switch to closely-related drink categories.

Changes in drinking frequency by alcoholic beverage category

Subjects: 826s, over 23 years old.

3. Who are the supporters for the third beer?

Among people who increased drinking frequencies of the "third beer" and low-malt beer types, men and women in their 40's are high. For canned Chuhai (a mixture of a Shochu alcoholic drink plus a soda mix) and pre-mixed cocktails, the number of women in their 20's and 40's are high. Finally, for Shochu drinkers, both males and females in their 20's and men in 40's and 60's has increased sharply.

Strategy

Richard's Eye

Case Studies/Japanese Market

JMR in Print

Third beer in Japan