No.11646 January 9, 2013
In 2012, the Suntory Group's alcoholic beverages business was up on the previous year due to a variety of factors, including the strengthening of its major brands such as The Premium Malt's and Kakubin, as well as the release of new products such as Kin-Mugi (70% less carbohydrates) and the new Yamazaki and Hakushu product lines, and increased demand in the non-alcoholic beverages market.
In 2013, 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) In Japan, in addition to strengthening activities related to major brands such as The Premium Malt's, Yamazaki, and Hakushu, Suntory will continue to offer customers new values, including expanding RTDs (Ready to Drinks) and non-alcoholic beverages and creating a category of RTSs (Ready to Serves).
(2) Outside of Japan, 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 in order to secure a solid business foundation.
1. Suntory Liquors Limited
Spirits Business (Whisky, RTDs, Liqueur & Spirits, Shochu)
Overseas Alcoholic Beverage Business
The 2012 total market for beer, a category that includes beer, happoshu, and new-category beverages, was estimated to shrink by about 1% compared to the previous year, while the market for non-alcoholic beer-type beverages was estimated to grow by 36%.
Suntory Liquors Limited's beer business*1 had total sales of 68.38 million cases, a 6% increase compared to the previous year. Beer sales totaled 61.92 million cases, a 6% increase compared to the previous year.
By brand, The Premium Malt's, which was re-launched in March and garnered even higher praise for its "lively aroma" and "deep richness and flavor," showed substantial growth, selling 16.56 million cases (up 10% year-on-year) and setting a new record for sales volume for the ninth year in a row. Kin-Mugi also grew favorably, selling 26.26 million cases (up 7% year-on-year) and surpassing the previous year for the fifth year in a row since its release. Released in April, Kin-Mugi (70% less carbohydrates) also sold well, breaking the yearly plan of 4 million cases after upward revision.
Similarly, All-Free, the best-selling*2 brand of non-alcoholic beer-type beverage, sold 6.33 million cases (up 8% year-on-year), continuing to solidify its position in the non-alcohol beer-type beverage market.
The total beer market in 2013 is forecast to shrink by about 2% compared to the previous year, while the market for non-alcoholic- beer-type beverages is forecast to grow by 8% compared to same period. Here at Suntory, we are planning to further bolster our activities focused on our three key brands: The Premium Malt's, Kin-Mugi, and All-Free. In addition, we are planning to introduce Grand Dry, a new product of new-category beverage, and to provide added impetus to the markets for beer, new-category beverages, and non-alcoholic beer-type beverages. In the beer business*1 , we aim to sell 72 million cases (up 5% year-on-year); in the beer category, we aim to sell 64.5 million cases (up 4% year-on-year).
(1) The Premium Malt's
With the beer market in 2013 forecast to shrink by 2% compared to the previous year, Suntory aims to sell 17.7 million cases (up 7% year-on-year). This year, we will unveil an active marketing campaign with the new key message. To drum up new demand, we will hold a product sampling drive from the beginning of the year, in addition to rolling out new television commercials tied to a gift campaign that will present specially made glasses to a total of 1 million customers. With the beer gift market forecast to shrink by 3% compared to the previous year, we are aiming for a 19% increase in sales of gift sets, which are doing well. Also, to improve brand strength, we are planning to hold quality promotion seminars at Suntory breweries, corporate premises, and stores, in addition to strengthening our activities aimed at bars and restaurants.
(2) New-category Kin-Mugi
With Kin-Mugi, which was re-launched with a stronger barley flavor and a smoother taste, Suntory aims to sell 28.85 million cases (up 10% year-on-year). Starting in mid-January, we will roll out a new campaign aimed at attracting an even wider range of users, as well as new television commercials and public transit advertisements with actress Rei Dan in continuous rotation.
As for Kin-Mugi (70% less carbohydrates), which was re-launched with a new taste so customers can enjoy even more barley flavor and aroma, we aim to sell 5.2 million cases (up 23% year-on-year) .
(3) Non-alcoholic beer-type beverage All-Free
With All-Free, which was re-launched with a taste befitting a smoother, more refined beer, Suntory aims to sell 7.5 million cases (up 18% year-on-year). From mid-February, we will begin an active marketing campaign, including releasing new television commercials for expanding consumption experience and improving brand recognition, as well as a new campaign and a million-unit product sampling drive.
(4) New-category Grand Dry
To create even greater demand in the new-category beverage market, Suntory will release Grand Dry on March 26, with the aim of selling 3 million cases. By setting the concentration of carbon dioxide gas pressure to the highest level in the history of our company's beers, we succeeded in making "a stimulating and substantial drink".
With the new product Grand Dry, as well as Kin-Mugi and Kin-Mugi (70% less carbohydrates), we will acquire broader demand in the new-category beverage market.
In the spirits business in 2012, the newly introduced Yamazaki and Hakushu product lines of whisky, as well as RTDs, grew favorably, achieving 4% growth compared to the previous year. In 2013, we will aim for 1% growth compared to the previous year by offering new values to customers through further expanding highballs and improving RTDs and non-alcoholic beverages, as well as through such efforts as strengthening our activities in premium whisky and creating a category of RTSs (Ready to Serves).
With the whisky market estimated to grow by 1% compared to the previous year, Suntory outperformed the market, posting 3% growth.
Kakubin showed favorable growth of 11% compared to the previous year as a result of efforts to promote compatibility with food with the aim of further market expansion and establishment of highballs, along with activities to allow customers to experience high-quality highballs for themselves.
As for premium whisky, the new Yamazaki and Hakushu product lines, which were released in May, gained in popularity as "a premium whisky you can easily enjoy nearby" among new users, mainly in their 20s and 30s. As a result, sales increased by a wide margin, with the brand-wide total of Yamazaki growing by 27% compared to the previous year and the brand-wide total of Hakushu growing by 310% compared to the same period. The quality of Suntory whisky has been receiving high praise around the world as well, with Yamazaki 18 Year Old and Hakushu 25 Year Old accomplishing the amazing feat of winning double Gold Medals in the whisky category at the International Spirits Challenge (ISC), a first in the history of the ISC.
In 2013, Suntory will celebrate its 90th anniversary of whisky making. In this pivotal year for the upcoming centennial, we will work to expand the whisky market through such efforts as "Strengthening premium whisky promotion activities," "Creating demand by offering new drinking styles and business development," and "Further expansion and establishment of highballs." We will also strengthen marketing activities for bourbon whisky such as Jim Beam and Maker's Mark. Through these efforts, we will aim for 1% growth compared to the previous year.
(1) Strengthening premium whisky promotion activities
So that a wider range of customers may enjoy our whisky, we will unveil a marketing campaign utilizing handy small-capacity sizes centered on Yamazaki and Hakushu, which were released last year, and Hibiki 12 Year Old, which has been receiving high praise overseas, and we will create demand through such means as increased contact with entry-level users and personal gifts. We will also release new television commercials for premium whisky in addition to the television commercials set in the Yamazaki and Hakushu Distilleries that we introduced last year.
(2) Creating demand by offering new drinking styles and business development
So that customers may more easily experience the luxurious worldview innate to whisky, we will introduce a new "on the rocks style" for enjoying whisky-and-water and whisky-and-soda in rocks glasses. We will also work to create demand through such efforts as expanding our new bar business Whisky Bottle Bar, where customers can comfortably keep bottles. In addition, we will open Suntory Whisky House in the Umekita Grand Front Osaka (Osaka Prefecture) in April as a place where we will offer an affluent lifestyle involving whisky.
(3) Further expansion and establishment of highballs
We will promote the appeal of Kakubin and canned Kaku Highball as "alcohol to go with your meal," including introducing new television commercials in February that promote the compatibility between highballs and food. Similarly, by continuing to strengthen activities for the improvement of quality at the point of consumption in bars and restaurants, we will strive for the further expansion and establishment of highballs.
(4) Strengthening bourbon whisky activities
From January 4 of the current year, we will strengthen marketing campaigns for bourbon whisky such as Jim Beam and Maker's Mark. To expand consumption experience and improve brand recognition, we will release new products in late January such as small-capacity tasting packs and new television commercials to promote the unique appeal of bourbon whisky.
Due to the growth of fresh demand generated by the polarization of products based on factors such as alcohol content and preference for sweetness, the total market for RTDs in 2012 grew 4%*3 compared to the previous year. This is the fifth straight year of growth in this market, which is presumed to reach a record size.
Suntory pulled up the market, breaking sales records for the eighth year in a row with sales of 42.87 million cases*3 (up 7% year-on-year). Among these, -196?C Strong Zero showed substantial growth of 25% compared to the previous year, with brand-wide total sales of -196?C reaching 19.31 million cases (up 15% year-on-year). As for Horoyoi, the new Wine Sour and Lemon Ginger product lines were received well, along with canned highballs, which also showed favorable growth of 8% growth compared to the previous year.
The growing market for non-alcoholic beverages also contributed to growth, with Non-aru-kibun selling 3.04 million cases (up 222% year-on-year).
With the total market for RTDs in 2013 forecast to grow 2%*3 compared to the previous year, Suntory aims to sell 44 million cases (up 3% year-on-year).*3 In order to meet increasingly diverse customer needs, we will work to nurture and strengthen our key brands such as -196?C and Horoyoi based on a multi-brand strategy while at the same time stimulating demand by introducing new value-added products.
As for -196?C, we will strengthen marketing campaigns, including introducing new value-added products starting with -196?C Strong Zero, with the aim of brand-wide total sales of 20.3 million cases (up 5% year-on-year).
As for Horoyoi, to offer new values in alcohol, we will introduce limited-edition products, such as releasing Mugi(Barley) and Lemonade in March for young people seeking an "easy-to-drink beer-type beverage", with the aim of selling 11.2 million cases (up 6% year-on-year).
As for Calori, in addition to re-launching our three most popular citrus flavors in January, we will release a limited-edition version of Cocktail Calori Cocktail Smoothie.
As for canned highballs, we will continue active marketing campaigns centered on canned Kaku Highball and canned Torys Highball.
As for Non-aru-kibun, to further invigorate the market for non-alcoholic beverages, we will work to expand our user base in various ways, such as re-launching our two most popular chu-hi flavors in February and releasing a limited-edition plum wine sour flavor called Kishu Ume, with the aim of selling 3.5 million cases (up 15% year-on-year).
Our liqueur and spirits showed favorable growth, surpassing the previous year. We continued invigorating the market, including the October release of the imported rum Brugal, which received high praise for the dry taste of the "Brugal dry mojito," and a new event called "Cocktail Festa."
We will offer a new way of enjoying alcohol aimed at the liquor market in Japan by releasing a new brand called Cocktail Tours, a type of RTS (Ready to Serve) that can be enjoyed easily just by pouring into a glass filled with ice. Similarly, in the growing white spirits market, we will strengthen marketing campaigns for Beefeater and Brugal. In addition, we will continue our active efforts to offer cocktails that can be made simply at home.
Our shochu sales shrank by 1% compared to the previous year, on par with the market's performance. In the ko-rui shochu category, sales of Kyogetsu, which was re-launched in January, were comparable to the previous year. In the mixed-grade (ko-otsu blended) shochu category, Muginoka showed favorable growth of 17% compared to the previous year.
As for the ko-rui shochu Kyogetsu, we will continue to promote new ways of drinking it centered on mixing it with acerola juice. In the mixed-grade (ko-otsu blended) shochu category, we will work to further improve brand strength by focusing our efforts on Muginoka.
In terms of whisky, our active promotion of Yamazaki, Hakushu, and Hibiki in Europe and America and Kakubin in Asia enjoyed favorable reception, while we expanded our sales of The Premium Malt's in Asia. In addition to products such as single malt whisky from Morrison Bowmore Distillers Limited and cognac from Louis Royer S.A.S., liqueurs such as MIDORI showed favorable growth thanks to increased efforts in Europe, America, and Australia.
Aiming for sustainable growth in our overseas alcoholic beverage business, we will strengthen marketing campaigns in accordance with the unique circumstances of each region throughout the world. In Europe and America, we will develop the Yamazaki, Hakushu, and Hibiki lines of premium whisky, as well as the liqueur MIDORI, while in Asia we will develop Kakubin and The Premium Malt's. Similarly, we will continue our active efforts to strengthen Bowmore and Auchentoshan single malt whiskies and Louis Royer cognac as global brands.
With the total market for wine in 2012 estimated to grow approximately 10% compared to the previous year due to growth in the wine bar business and increased demand for drinking at home, our company's sales grew 8% compared to the previous year.
Sales o domestic wine grew 9% compared to the previous year while sales of imported wines grew 6%.
As for domestic wines, the Japanese Wine product line, which is made from 100% domestic grapes, showed substantial growth of 60% compared to the previous year. These wines earned high praise, such as the gold medals won by Tomi no Oka Winery's Tomi White 2010 and Japan Premium's Koshu 2011 at wine competitions. Similarly, in the category of casual wines, brands such as the antioxidant additive-free Sankaboshizai Mutenka no Oishii Wine and Delica Maison Delicious continued to show favorable growth.
As for imported wines, Carlo Rossi, popularly enjoyed over ice in a style called "Rossi on the rocks," grew 13% compared to the previous year. Released in September, the still wine from the Spanish company Freixenet also greatly exceeded expectations, while sparkling wines such as champagne showed favorable growth.
With the total market for wine in 2013 forecast to grow approximately 7% compared to the previous year, our company will aim for approximately 10% growth compared to the previous year. We will strengthen our main brands, which include the Tomi no Oka Winery and Japan Premium series and Sankaboshizai Mutenka no Oishii Wine from the Japanese Wine product line, made from 100% domestic grapes, as well as imported wines such as Carlo Rossi and the sparkling wine Freixenet. We will also work to establish the growing number of wines in the mid-level price range and will concentrate our efforts in still wine from the Spanish company Freixenet.
In addition, we will expand our active marketing campaigns, including offering new drinking scenes for low-alcohol wines and introducing new products.
In the beer business, there was continued growth in the premium priced Jun-nama (Chun sheng) and the standard priced Cho-jun (Chao chun), which were marketed more aggressively through advertising and other means. To make further strides in the beer business, we also signed an agreement in June to establish a joint beer corporation in Shanghai and Jiangsu Province through a joint venture with Tsingtao Brewing Company Limited. In addition, our wine business also grew through ASC Fine Wines Holding Limited, China's largest wine importer.
The Shanghai beer business will continue to boost profitability by reducing costs and other means. Through the new organization and the establishment of a joint venture with Tsingtao Brewing Company Limited, we will aim for further business expansion by maximizing the synergy between our two companies and by strengthening Suntory (China) brands such as Jun-nama (Chun sheng) and Cho-jun (Chao chun) and Tsingtao brands.
We will also increase wine sales through ASC Fine Wines Holding Limited.