E-Malt.com News article: Japan: Japan fighting heat with cheap beer

Japanese retailers are headed for hot summer sales of cheap beer, driven by above-average temperatures and consumers with fatter wallets, Deutsche Bank AG’s Takahiro Kazahaya was quoted as saying by Bloomberg on July, 26.

Japan’s Meteorological Agency is forecasting the hottest summer in 100 years globally after a heat wave snaked into Tokyo last week via North America and Europe. Temperatures in the capital exceeded 95 degrees Fahrenheit (36 degrees Celsius), providing a boon for breweries including Kirin Holdings Co., garment makers and air conditioner manufacturers, Kazahaya said.

Japan’s weather agency says most of the nation has more than a 60 percent probability of hotter than average temperatures over the next month. When the temperature is 1 degree Celsius above average in the July-September period, consumer spending expands by 433.3 billion yen ($4.9 billion) and the gross domestic product by 345.6 billion yen, according to Dai-Ichi Life Research Institute.

A heat wave in July 2004, which saw Tokyo temperatures rise to a record 39.5 Celsius, drove monthly retail sales up 0.7 percent, according to the Trade Ministry.

Consumer confidence in June rose for the sixth straight month to the highest level since September 2007. Summer bonuses increased about 0.8 percent this year, reversing a 17 percent decline in 2009, the Nikkei newspaper reported, citing a survey conducted by Nikkei Inc. and Nikkei Research Inc. The average summer bonus before taxes was 701,687 yen ($8,000), according to the survey.

Japan’s major brewers are churning out non-alcohol and no- malt beers to tap into demand for cheaper beverages. Kirin Holdings Co., the nation’s biggest beermaker, will double the annual sales target of its non-alcoholic Yasumu Hi No Alc. 0.00% drink after an initial annual target of 400,000 cases was achieved within about two months after its release in April.

“New types of beers have been expanding the market,” said Naomi Takagi, an analyst at JPMorgan Chase & Co. “People who can’t drink alcohol such as drivers and pregnant women can have a taste of beer.”

No-malt beers, which are cheaper than regular brews, rose to more than 30 percent of total beer shipments for the first time in June, according to the Brewers Association of Japan and the Brewers Council of Happoshu Taxation. Asahi Breweries Ltd., Japan’s second-largest, said it plans to launch the first non- calorie beer in the world next month.

The question now is whether retailers have the capability to ride the summer wind, analysts said.



28 July, 2010