While the Great East Japan Earthquake had some effect on the Suntory Group’s alcoholic beverages business, last year’s performance was up on the previous year thanks to a number of factors, including robust efforts to get our production and distribution operations back on line quickly, enhanced marketing for major Suntory liquor brands, creation of new demand in the markets for non-alcoholic beverages and maccoli, and the launch of new ways to enjoy Suntory drinks in the wine and liqueur segments.
In 2012, we will implement a range of business activities, centered on those outlined below, as a means of driving further sustainable growth and boosting profitability.
(1) Japan: In addition to stepping up business pertaining to major brands such as The Premium Malt’s, Kakubin and Horoyoi, Suntory will continue to expand its range of non-alcoholic beverages and offer consumers new values such as inventive styles of enjoying Suntory drinks, including the brandy spritzer.
(2) Global: Looking to further solidify its global business foundation, Suntory will seek to grow its brand portfolio across the whole Suntory Group in accordance with the unique circumstances of each region throughout the world.
1. Suntory Liquors Limited
Beer Business
Spirit Business (whisky, RTDs, liqueur, shochu, makgeolli)
Overseas Alcoholic Beverage Business
The total 2011 market for beer, a category that includes beer, happoshu and new-category beverages, was estimated to shrink by around 3% compared with the previous year. As it turned out, the beer market was down by around 5% and that for happoshu down by some 12%, while the new-category market grew by roughly 3%. Major growth was noted in the market for non-alcoholic beer-type beverages, which was up 18%.
Suntory Liquors Limited total sales volume in the beer business*¹ grew 6%, to 64.62 million cases*² , with beer sales totaling 58.65 million cases, which is roughly equal to the level attained in 2010.
By brand, The Premium Malt’s, which was subject to a beefed-up marketing drive, and Kin-Mugi (golden barley) sold well. The former sold 14.99 million cases (up 3% year-on-year) and the latter sold 24.53 million cases (up 17% year-on-year). Similarly, All-Free, the best-selling*³ non-alcoholic beer-type beverage, sold 5.88 million cases, 193% more than the previous year, well in excess of the target Suntory initially planned for, and helped propel the expansion of the market in this category.
The overall beer market is forecast to shrink by 3% in comparison with 2011, while the market for non-alcoholic beer-type beverages is forecast to grow by 19% compared with the same period. Here at Suntory, we are determined to further bolster our activities focused on the three key brands: The Premium Malt’s, Kin-Mugi and All-Free. Suntory’s aim in doing so is to provide added impetus to the markets for beer, new-category and non-alcoholic beer-type beverages. The company’s target for its beer business*4 is 67.5 million cases (up 4% year-on-year); for beer, the target is 60.5 million cases (up 3% year-on-year).
(1) The Premium Malt’s
The Premium Malt’s is brewed to be the best tasting beer in the world. In 2011, The Premium Malt’s sold in higher numbers than ever before-the eighth year in a row it has achieved this remarkable feat.
This year, The Premium Malt’s will be re-launched on March 13 with an improved recipe and revamped packaging. It will be marketed as the beer you drink in everyday happy times spent with loved ones-a move designed to improve communication of the true delights of the product. We will use even better ingredients and more refined production methods to ensure that The Premium Malt’s delivers on its promise of a lively aroma, a deep richness and unbeatable flavor.
A major advertising campaign will be launched upon the product’s re-release, led by the message that The Premium Malt’s sparkles with the genuine goodness of a proper beer. In addition to television commercials, newspaper advertisements and transit advertisements, Suntory will wage a large sampling campaign to the tune of 1.5 million units in order to drum up new demand. What is more, there will be a concerted effort to spread the word about the impeccable quality of the product, including seminars at Suntory breweries, corporate premises and in stores so as to expand points of contact with consumers. The seminars will be designed to afford people the chance to get hands-on experience of the wondrously delicious taste of The Premium Malt’s.
Through these endeavors, Suntory aims to sell 16.5 million cases of the new and improved The Premium Malt’s (up 10% year-on-year).
(2) New-category Kin-Mugi
Kin-Mugi has recorded dramatic growth in sales every year since its launch in 2007. This year, Suntory is aiming for sales of 27.5 million cases (up 12% year-on-year).
Relaunched in December 2011 with a new recipe and packaging, Kin-Mugi now boasts an aftertaste with a more pleasing balance, which makes it also ideal for drinking over a meal. Suntory will roll out a new marketing campaign in mid-January in order to establish Kin-Mugi among a greater range of demographics. The dual-focus television and transit campaign, which will target younger consumers as well as the main target for the product, i.e., men in their thirties and forties, will give consumers the chance to receive a "Home-from-Work Evening Tipple Set."
(3) Non-alcoholic beer-type beverage All-Free
In a market for non-alcoholic beer-type beverages that is forecast to expand to approximately 14 million cases, Suntory is aiming to sell 7 million cases of All-Free (up 19% year-on-year).
All-Free was relaunched in December 2011 with a new and improved recipe and packaging in the pursuit of an authentic beer flavor and crisp finish. Starting in February, Suntory will undertake a new television advertising campaign and a million-unit sampling drive in order to expand the volume of consumers who have tried All-Free and increase brand recognition. Meanwhile, there will also be a promotion campaign targeting restaurants in an effort to magnify lunchtime demand for All-Free.
Consumer trends regarding alcoholic products underwent major change in 2011, not the least of which was the increase in the number of people drinking at home as a result of the Great East Japan Earthquake. Amidst this uncertainty, Suntory worked hard to offer consumers new values, which resulted in larger sales of whisky-and-soda highballs and ready-to-drink beverages (RTDs), and growth in the spirit business at large.
In 2012, Suntory is determined to spark growth in its spirit business through nurturing and strengthening of its brands in growth categories like highballs, RTDs and makgeolli, through expansion of its non-alcoholic beverage line-up, and through inventive new styles of enjoying these.
(1) Further highball market expansion
By beefing up promotional activities regarding proper ways to make a delicious highball and supervising restaurants to ensure optimal quality standards, Suntory seeks to provide ever more consumers with the opportunity to enjoy tasty, high-quality highballs and, thereby, aims to further establish a solid position for the highball in the market. The company will also carry out aggressive marketing campaigns linked to seasons and events to offer consumers a greater range of scenarios in which to enjoy a refreshing Suntory highball and thereby expand the highball market.
(2) Premium whisky promotions & new products
Suntory will bolster its promotion activities regarding premium whisky in order to educate consumers who have developed a taste for the spirit via the highball on the depth and breadth of the delights and values offered by premium whisky. The company aims to communicate with these demographics regarding the total dedication of everyone at the Yamazaki and Hakushu distilleries to mastering their craft and making Suntory whisky the best there is.
In addition, there are plans to release new year-round products from the Yamazaki brand, which has seen a surge in popularity recently with the release of Yamazaki 50 Years Old, as well as the Hakushu brand. This will be the first time in 14 years a year-round product has been released under the Yamazaki name; four years in the case of Hakushu.
(3) Creating demand by offering new drinking styles
Suntory is always eager to offer new ways to enjoy its spirits and thereby drum up new demand. Recent ideas include the brandy spritzer, which is made by mixing orange and other seasonal fruits in with brandy and adding soda water.
(1) Nurture & strengthen core line-up
Suntory is aiming to sell 16.9 million cases (up 1% year-on-year) of -196°C products, with added impetus to be generated by the relaunch of -196°C Strong Zero, which has an alcohol content of 8%, in February.
Meanwhile, Wine Sour, a new flavor of Horoyoi, which has a low alcohol content of 3%, will be released in March. With this and other seasonal releases, Suntory is aiming to sell 11.3 million cases (up 5% year-on-year). Calori, a range of chu-hi drinks, are to be relaunched in January with mango to be added to the core line-up.
In a move designed to meet the needs of those who want some texture in their liquor, an Aloe Yogurito version of Cocktail Calori will be released in January containing chunks of aloe. In this way, Suntory continues to provide consumers new, value-added products.
In the canned highball segment, a continuous run of revamped products and limited editions will be a significant part of an ongoing, aggressive marketing effort centered on canned Kaku Highball and Torys Highball through which Suntory aims to reach sales of 5.9 million cases (up 11% year-on-year).
(2) Expanding demand by creating new categories
Canned chu-hi for seniors
Kodawari Kajuen no Osake, Suntory’s first canned chu-hi aimed at women in their fifties and sixties, is slated for release in February. The product is designed to meet the needs of that demographic for something that has just a touch of luxury and comes in just the right size package. As such, Kodawari Kajuen no Osake will be sold in small (250ml) cans and made from the choicest ingredients sourced from selected farms and regions. By offering consumers a new brand, Suntory aims to generate new demand.
Non-alcoholic beverages
Through Non-aru-kibun, Suntory aims to further invigorate the market for non-alcoholic beverages with aggressive marketing and products developed to meet specific consumer needs. In addition to the launch in February of the Chichukai Lemon (Mediterranean lemon) flavor, a drink designed to taste like chu-hi, Suntory will release products aimed at consumption in restaurants and designed to drum up demand for consumption over lunch and other day-time activities such as "mothers’ get-togethers." The company is aiming for sales of 2.1 million cases for the whole brand (up 53% year-on-year).
The total market performed robustly-estimated to be up 3% over 2010-on the back of growth in wine bars, which created a rise in the number of drinkers enjoying wine on a more casual basis. Suntory Wine International’s sales were up 6% year-on-year.
In the Japanese wine segment, products made entirely from domestic grapes are garnering considerable attention. Suntory’s "Japanese wine" line-up was subject to an aggressive marketing drive, which resulted in major growth with sales up 18% year-on-year. Elsewhere, Sankaboshizai Mutenka no Oishii Wine and Delica Maison Delicious all continued to perform strongly, the combined result being that Japanese wine sales were up 14% year-on-year.
In the imported wine segment, "Rossi on the rocks," a new drinking style promoted by Suntory in which Carlo Rossi wines are served over a generous amount of ice, proved popular and sparked huge growth in sales of Carlo Rossi, which finished up 54% year-on-year. Elsewhere, Viña Maipo, the Chilean brand of wines that combines great cost performance with highly popular flavors, remained a strong performer.
The total market is forecast to continue in its growth pattern, up by about 2% in 2012. Suntory Wine International is aiming to ramp up the marketing of its core brands and expand its line-up of rosé wines and smaller-sized products, categories in which there is market growth. Through efforts such as these, the company seeks to expand demand and increase sales by 6% over 2011.
In the Japanese wine segment, Suntory Wine International will continue to strive for greater recognition of Japanese wine, the company’s line-up made from 100% domestic grapes, and will step up promotions for the Japan Premium series and the Tomi no oka Winery series. Furthermore, the aggressive marketing campaigns for Sankaboshizai Mutenka no Oishii Wine, Delica Maison Delicious and Akadama Sweet Wine, which are popular as easy options for drinking at home, will continue this year.
In the imported wine segment, Suntory Wine International will endeavor to drum up more demand through strong marketing activity centering on its key brands, including Carlo Rossi, which forms the base of the popular "Rossi on the rocks," as well as Freixenet, Viña Maipo and Madonna.
