Japan: Kirin targets 5.6 pct rise in 2007 beer sales

Kirin Brewery Co. said in its Press Release on Wednesday, January 10, it plans to sell 5.6 percent more beer and beer-like drinks in 2007, helped by a launch of the first major beer in Japan in 17 years.

Year 2006 was characterized by a combined domestic market for beer, happo-shu and new genre contracted, influenced by Japan's aging and declining population, the diversification of individual tastes, alcohol tax revisions and other factors.

Despite this difficult market background, Kirin outperformed the industry and delivered its second consecutive year of growth recording sales of 187.10 million cases (up 4.8% year-on-year; 12.66 liters/case). Kirin Nodogoshi, which was launched in 2005, continued to perform well in 2006, and Kirin recorded year-on-year growth in happo-shu —despite a major decline in the happo-shu industry—due to proposing and launching products such as Kirin Enjuku that meet customers' expectations. In beer, Kirin has revitalized the market through its new value proposals for special premium beers* such as Kirin Ichiban Shibori Muroka.

In order to ensure a stable domestic alcohol business as the foundation of the Group's operations, Kirin aims to secure high levels of customer support and loyalty and achieve a growth rate that significantly outperforms the industry, by responding to customers' diverse needs and engaging in marketing that is closer to customers than anyone else.

Through addressing these issues, Kirin aims to achieve a sales target of 197.50 million cases in 2007 (up 5.6% from the previous year), and forecasts a slight decline in the industry as a whole. Kirin's 2007 targets for the major categories are as follows: beer: 83.40 million cases (up 4.6%); happo-shu: 70.90 million cases (up 3.5%); new genre: 43.10 million cases (up 10.8%); chu-hi: 34.60 million cases (down 7.7%; 250ml can basis).

Kirin, which lost the title as the country's biggest beer maker to rival Asahi Breweries Ltd. in 2006, expects the overall industry to see sales falling around 1 percent in 2007.

Kirin said on Wednesday it would introduce Kirin The Gold beer in Japan on March 20, targeting drinkers in their 20s and 30s. The launch, marking the company's 100th anniversary, is the first introduction of regular beer in 17 years by a Japanese brewer that will be sold all year around.

The happo-shu market contracted in 2006 due to the influence of new genre products and other factors, but Kirin maintained its strong position in the home-use market, supported by its top brands and brands with a distinct individuality. In addition to the Tanrei series, Kirin offers Kirin Enjuku, which has won the support of customers as a full-bodied happo-shu.

New genre market continued its expansion in 2006, and grew to comprise approximately 20% of the total beer, happo-shu and new genre market. Kirin Nodogoshi Nama sustained its strong performance, and Kirin maintained its clear lead in this market, with annual sales volume of approximately 38.90 million cases. In 2007, we will carry out a renewal based on the current highly rated flavour and respond to customers' needs with further refinements.

Kirin also said it aims to sell 28 percent more Kirin brand beer overseas in 2007, helped by growth in China.

Kirin last month said it aims to increase its operating profit by 28 percent or more in the next three years, led by growth in overseas operations and non-beer alcohol and soft drink businesses. The company said it was open to new alliances in such areas.

After the announcement, shares in Kirin closed down 3.6 percent at 1,832 yen, underperforming a 1.71 percent fall in the benchmark Nikkei average.

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