How Japan’s population crisis quietly made Asahi one of Europe’s biggest beer makers
Asahi has achieved what many international beer brands could dream of.
Ten years ago, when legendary Japanese brand Asahi was trying to solve the way it invaded the European beer market, it turned into a familiar enemy of the time as a benchmark: premium Italian brand Peroni nastro azzurro.
But soon, when Asahi acquired the brand in 2016, Peroni sales became a much more important benchmark for Beermaker.
Premium Japanese beer emerged in Asian restaurants, and the rise in pubs across Europe have quietly grown a huge wave in the region thanks to the parent company’s large acquisitions over the past decade and solidifying its position as a major batsman on the continent.
Brewer increased revenues of $5.4 billion last year from Europe alone, jumping 13% from 2023, and earnings of $697 million. Currently, Europe is Asahi’s largest market outside of Japan, accounting for 27% of sales in 2024.
Japan’s population crisis
Asahi’s venture into the European market was no coincidence. One CEO, Atshushuchchuki, says he has something to do with Japan’s constantly challenging elderly people.
Japan’s working-age population has faced a merciless decline in numbers between 15 and 64 years of age over the past 30 years drop down It ranged from the peak of 87.1 million in 1994 to 72.8 million in 2023. The decline in working-age populations has become an existential crisis for Japanese companies, including Asahi.
“If you look at the Japanese beer market, since 1995, the market has been contracting at a rate of 1-2% per year. I think this is likely to continue,” Katsuki said. luck On a visit to London.
In many ways, Japan serves as a precursor to the Western world. The Western world is facing its own demographic crisis with a decline in fertility rate decades after it began to affect Japan. In the meantime, however, Asahi has been making hay while the sun shines in the European beer market.
Although successful domestically, for niche Japanese brewers like Asahi, the challenge of invading Brandroy’s beer sector was substantial, despite its advantage in Europe.
Japanese brewers have created a popular innovation in the country to help local people flock to the beer. Asahi’s domestic competitor, Kirin Ichiban, introduced frozen beer to Japanese drinkers. Asahi has experimented with its own sub-zero beer in Japan.
“I don’t think it’s going to work if there’s a unified global marketing strategy,” Katsuki said, explaining why these innovations have not reached Europe.
Rather than attracting Europeans with Japanese innovation, Asahi took a different approach. In other words, if you can’t beat, join them.
Asahi acquired Peroni and Outch Lager Grolsch from AB InBev in a multi-billion dollar deal in 2016. The group then purchased beer assets in 2019 for £250 million ($326 million) from British Brewer Fuller, Smith & Turner.
In recent years, there has been a strong shift towards “premium” in the alcoholic beverage market, and beer is no exception. Buying Peroni seemed like a natural next step in its premium evolution.
In fact, as part of a strategy to expand the global sales of Asahi Super Dry, Asahi used Peroni’s sales in London as a benchmark before the group acquired the Italian beer brand.
In the face of that, Asahi Super Dryness and Peroni Nastro Azurlo appear to be heading towards the same type of consumer.
“The fact that these value propositions are two brands is similar in that they propose this idea of being stylish, high-end, premium and refreshing.”
Katsuki said he is leaning towards Peroni’s “Italians” and that Asahi’s Japanese link has acquired strategies that drinkers would want to experience when they buy beer.
Working in Europe has other benefits, and Katsuki has other benefits, such as learning about profitability growth management strategies and building popular brands.
Asahi is currently the number one beer supplier in Poland, the Czech Republic, Romania and Hungary, and Katsuki says the group is “one of the biggest players” in the UK’s super premium category.
European stolen prohibition movement
One of the trends that Asahi expects Europeans to follow Japan is in the movement towards abstinence.
Asahi aims to reach 20% of global sales, up from alcohol-free and low-alcoholic drinks by 2030, up from current 12.1%. In Japan, that figure is already around 15%.
Low-alcoholic beer sales in the UK are growing faster than any other market last year, partly supported by post-Brexit regulations claiming cheaper obligations for low-alcoholic beverages. But it reflects the broader movement towards alcohol consumption across Europe.
Katsuki says his company is seeing more diverse demands, even in the low and non-alcoholic sector of his business, and consumers are quenching their thirst by demanding more diverse beers.
“The fact that flavored non-alcoholic beers are truly popular suggests future growth in the adjacent beer category.
The challenges of Europe
The quest to compete with native European rivals like AB Inbev and Carlsberg continues to face challenges for Japanese brewers.
last year, Katsuki highlighted A serious risk to beer supply across Europe is the lack of barley and hops. While the invasion of Ukraine by major Russian grain suppliers has affected supply, the more existential risk comes from climate change.
The group is working with Microsoft to diversify production while improving crop detection, but climate change remains an unforgiving risk to European beer supply.
Another quirky challenge that appears to have become an increasingly European event is the challenge of fake continental lagers.
British drinkers have been brewed entirely in the UK, beating Madri, a Spanish-themed beer with a tenuous link to the country
This trend sparked Spanish Estrella CEO To call Madri, he accuses Beermaker of dishonest, eating up the market share of his company.
Katsuki says he understands why there is dissatisfaction with the vague beer nationwide among producers and consumers.
“In a way, they think that the producers are probably fake the origins of the beer,” Katsuki said.
“But when you produce beer in Italy or Spain and ship it to the UK, consider the impact of the climate crisis. This will increase CO2 emissions,” he added, adding that imported beer does not have returnable bottles, further reducing sustainability. ”
There are more expansion plans coming from Asagi. Its famous whiskey brand Nikka has been limited primarily to Japan due to a long-term lack of important liquids. In other words, only 10% of sales are outside of Japan.
Katsuki says Nikka is regularly inquiring from customers in overseas markets, and Asahi is developing plans to enhance production.
In any case, Europeans can expect to become accustomed to the Japanese touch to their favorite drink, even if they may not know it.
Editor’s Note: The version of this article was first published on October 1, 2024 on Fortune.com
This story was originally introduced Fortune.com