The total sales volume of sake including exports in 2019 was 53 million 8.64L cases, representing a drop of 5.7% on the previous year. This continues the downward trend since the 1973 peak of more than 200 million cases. The off-premises sales of sake was only 4.7% of all alcohol beverage categories in 2019.
About 80% of this off-premise consumption was by people aged over 50, and half of that is by people aged 60 and over, a testament to the aging population in Japan.
Meanwhile, the Japanese response to the new coronavirus pandemic began in earnest in March, followed by the (now-lifted) emergency declaration in April. Despite the significant easing of restrictions, the habit of eating out has not returned to pre-COVID levels.
According to Japanese law, restaurants are not normally allowed to sell alcohol to consumers except for onsite consumption, but the National Tax Agency relaxed the license system from April 9, and restaurants were able to apply for a permit to sell alcohol. Some approved restaurants have begun selling take-home sake by volume on request. However, since April, there are quite a few breweries whose revenue has have fallen below 50% from the previous year.
Meanwhile, in Japan, each brewery is strengthening its efforts to talk directly to consumers about its brand using social media such as Instagram and Facebook Live, as well as by providing webinars such as a dialogue between brewers or a direct interview with a senior brewer. And like Imayo Tsukasa Sake Brewery in Niigata prefecture, some sake breweries have even commenced virtual tours for domestic and international customers and consumers.
Mr. Yosuke Tanaka, president of Imayo Tsukasa brewery, said “We already had a reputation for innovation. Our popular new opportunities such as virtual tours and Social Distance Sake are just an extension of this”. So not only the virtual brewery tour but also just launched “Social Distance Sake” have been evaluated positively by many existing customers. One webinar or virtual sake brewery tour generates around 50,000 to 100,000 yen in revenue, and this will only increase as we gain new followers. We must constantly devise our programs so that they are always fresh and interesting. ”
In an attempt to appeal directly to consumers, 18 brewers have joined the trend of “choirs at home” to sing “Let’s drink at home”, a parody of a song by a well-known Japanese artist. Mr. Kenji Miwa of Miwa Sake Brewery, famous for “Shirakawa-go” in Gifu prefecture, said “We wanted to blow away the fear of economic turndown, COVID worries, and everyday anxieties with a light-hearted positive message about staying home. The sake industry is special because both individuals and the whole industry can collaboratively take action for our society.”
While off-premise sake consumption is less than 5%, we at Sake Experience Japan hope that, especially in these challenging times, the consumption of sake at home will grow.
Before COVID-19, brewers could visit many liquor shops and restaurants to talk directly to consumers about their sake, but since the transition to a virtual world, the barriers to connecting with consumers have been drastically lowered, and cost-effectiveness has increased because they can do it from their brewery or even from their home. We believe and hope that this game-changer will be adopted broadly across the sake industry.
This industry in general has a lower profit margin than the wine and whiskey industries. Based on an NTA survey of 1,378 sake breweries, the average sales per brewery in 2017 was 310 million yen and the average operating profit was a deficit of 3.2 million yen. The average operating profit margin was only 0.6% in the three-year average from 2015 to 2017. Directly connecting with consumers will lead to increase profit which is good for the industry. If it goes well, they will be able to invest more in both equipment and brand promotion, leading to better sales outcomes, which is a growth cycle already common in other alcohol categories.
Currently, a brewery webinar attracts roughly 50 participants but it has not yet become their main business. In the US, there are approximately 10,000 wineries, and the direct sales ratio to consumers (including over-the-counter sales at the winery) is approximately 30%. We hope that the changes in new sales and promotional methods triggered by COVID-19 will be a ray of light in a key cultural industry at this difficult time.
 Japan Sake and Shochu Makers Association
 SCI data period January-December 2018 / January-December 2019
 Wine and Vine Analytics