Ichiban' purveyor Kirin becoming distant second to Asahi

SHOHEI KONO, Nikkei staff writer

TOKYO -- Once the undisputed king of Japanese beer, Kirin Brewery is struggling to retake the market share crown from Asahi Breweries, which has enjoyed a nearly unbroken rule since 2001.

     Kirin's hard times were the talk of the industry Thursday, when top brewers issued their January-June shipment figures.

      Asahi led the pack for a fifth straight year. The purveyor of Super Dry saw its share grow 1 percentage point on the year to 38.1% and stands a good chance of topping 40% on a full-year basis for the first time.

      By contrast, Kirin was the only one of the big four to lose market share. A drop of 1.9 points took it to an all-time low of 33.1%. Kirin was supposed to cut into Asahi's lead, not fall further behind.

     The fight for Japan's beer drinkers has gotten so intense that for the first time, Asahi brought out its president last month for an in-store promotion during "chugen," the midyear gift-giving season.

     The battle on the commercial front is no less fierce. Asahi poached Colowide, a big operator of Japanese-style pubs, as a customer from Suntory Liquors late last year. In March, Asahi invested in Chimney, a pub group that pours Kirin's flagship beer, Ichiban Shibori, at many of its locations.

      But not all of Kirin's troubles can be blamed on the competition.

      The company declared this would be a year of consolidation. The first step would be to "re-establish" its core brand, President Yoshinori Isozaki said. An in-store advertising campaign touted Ichiban Shibori's production method -- the name means "first press" in Japanese -- and quality. Kirin also released a premium version of the beer last month for gift sets only. The results could have been worse: shipments of Ichiban Shibori and its spinoffs fell only 0.4% in the first half.

     But Kirin's other brands got shortchanged. Shipments of Lager and low-malt brew Tanrei dropped by about 10%. Sumikiri, a new variety that sold well after its debut last year, suffered a 50% volume plunge in June.

     After watching its sales shrink last year even as rivals grew theirs, Kirin seems to have tried to avoid overextending itself in the first half. Yet for all the energy it poured into Ichiban Shibori, volume went down.

     "Kirin's brand strategy seems a little aimless," an executive at a rival brewery says.

     As luck would have it, Kirin's hopes for a World Cup boost fizzled. The Japanese national soccer team, star members of which adorned Kirin cans, failed to advance beyond the group stage.

Sales pitch from the boss

To try to turn things around, Isozaki has traveled across the country, trying to drill a new, more aggressive approach into sales teams sometimes criticized as afraid to get their hands dirty. He has also made personal sales pitches to big restaurant groups.

     "We're looking to make a comeback by going on the offensive," a senior executive says.

     Back in the 1970s, Kirin boasted a market share of around 60%. But since losing the top spot in 2001 to Asahi, Kirin has managed to climb back only once, in 2009. Nor can it rest assured of remaining No. 2. Although Kirin still commands a wide lead, third-place Suntory's market share hit a record-high 15.5% in the first half.

     Japanese brewers are rushing to expand overseas, but their home country still provides an essential earnings base. From the corner office on down, Kirin will need to see itself as not a champion but a challenger in that market.