Fri, Mar 12, 2021 page10

• US’ top-selling Japanese beer plans US brewery

  • Bloomberg
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  Sapporo Holdings Ltd is planning to set up a brewery in the US by the end of 2024, as the top-selling Japanese beer in the US market seeks to expand its market share and cut costs.

  “I would like to have a production base on the west coast,” Hiroyuki Nose, Sapporo Breweries’ vice president of marketing, said in an interview. “We make and import most of it from Canada and there are logistical costs. This is a challenge for us.”

  The Tokyo-based beverage maker has not been able to scale up beer brewing in North America — its largest overseas market, said Nose, who is set to become president of Sapporo Breweries at the end of this month.

  Sapporo might also look at acquiring a brewery or expanding its contract manufacturing in the US as part of the efforts, he said, declining to share more details, such as investment or the brewing capacity being planned.

  A presence on US soil would not only save transportation costs for Sapporo, but also allow it to better penetrate what the Brewers Association, a craft-beer trade group, says is a US$116 billion US beer market.

  The company predicts sales volume of its Sapporo Premium beer to increase 20 percent this year in North America, as demand recovers from the COVID-19 pandemic.

  Although it lags rivals in its home market — it is the fourth-largest beer maker in Japan — Sapporo had an early start in the US, to which it began exporting in 1964, and has become a popular offering at restaurants.

  Sapporo also owns California-based craft beer maker Anchor Brewing, which it purchased in 2017. A small amount of its Sapporo Premium beer sold in the US is currently brewed through contract manufacturing, and the rest is imported from Canada and Vietnam.

  The North American market contributed about one-fifth of the company’s alcoholic beverage sales of ￥285.4 billion (US$2.63 billion) last year. About 70 percent of its overseas beer brand, Sapporo Premium, was sold in the US and Canada.

  Beer makers worldwide have been hit hard by the pandemic, as the virus upended how consumers dine out and drink. That meant beer and alcohol sales to restaurants dropped off, while canned drinks sold through retail channels did well.

  While Sapporo’s alcohol sales fell 13.6 percent last year, the North America unit’s sales decrease of 5.3 percent was much smaller by comparison and the segment’s profit also grew.

  The fall was stemmed partially by a larger contribution from store sales, as more drinkers shopped for home consumption.

  Sales actually grew in Canada, where about 90 percent of its beer sales are through retail channels, Nose said.
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