Ken Research has recently announced its publication, “Failure Case Study: 1% Alcohol Drinks; The risk of innovation blurring the identity of alcoholic and soft drinks’’, which aims at providing in-depth market analysis of Japan’s alcoholic beverage market and deep understanding of consumer trends and attitudes that drive innovation. Further, it explains the product concept and positioning of 1% alcohol drinks and elucidates the causes of failure of such drinks in Japan. It also discusses the elements of alcoholic drinks that must be undertaken for future product development.
Japan has always been considered as a leading export nation of the world with immense prosperity and wealth. In 2011, Japan’s Gross Domestic Product (GDP) was USD5.8 trillion which was one of the highest in the world. This report seeks to provide a detailed analysis of Japan’s alcoholic beverage market and an understanding of consumer trends and attitudes that drive innovation. Further, it explains the product concept and positioning of 1% alcohol drinks and elucidates the causes of failure of such drinks in Japan. It also discusses the elements of alcoholic drinks that must be undertaken for future product development.
Japan’s flavored alcoholic beverage market witnessed record high in 2013 where the market volume hit a high of 2.5 billion liters which was 4.5 times larger than that in 2003. Market has been steady and major manufacturers have focused on flavored alcoholic beverages as one of the core categories. Major market players of Japan’s alcohol industry are Kirin Brewery Co. LTD, Asahi Breweries, LTD., Suntory and Sapporo Brewery, LTD. Major segments of alcohol beverage industry include beer, wine and spirits.
Influx of many global alcohol brands can also be observed in the market as a consequence of globalization and reduced tariffs. Japan’s import of alcoholic beverages has also shown an upward trend recently.
|Commodity||Imports 2011 – value USD millions||Imports 2011 – volume million liters||Compound annual growth rate (CAGR) 2006-11(value)||Compound annual growth rate (CAGR) 2006-11(volume)|
(Source: Global Trade Atlas)
1% alcohol beverage fiasco
Kirin and Suntory released canned alcoholic drink with 1% alcohol content, both using slogans that they allow consumers to enjoy alcohol without getting too drunk. But this rather turned out to be biggest fiasco in alcohol industry of Japan and production of both brands terminated shortly after their launch. There are many reasons for the failure of these drinks such as:
Key Macroeconomic trends of the Japanese alcoholic market
Alcohol industry plays a crucial role in economy of Japan. Volume of alcoholic beverages is an important indicator of the overall consumer sentiment in the country. Following are key consumer and market trends that explain enormous demand for alcoholic beverages in Japan:
However, many market and consumer trends also prove that though Japan still has a huge demand for alcohol but there is fading optimism associated to this industry. Many factors are responsible for steady decline in demand for alcohol:
Recession and falling Gross Domestic Product (GDP) of the nation attributing to global slowdown and global economic crisis. This has led to fall in expenditure of consumers on alcoholic beverages.
High amount of taxes are levied on consumption of alcohol and related beverages which is reducing demand for such beverages.
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