Printer Friendly

The second stage.

Sapporo U.S.A. has built a strong presence in the on-premise restaurant niche--now company president Yoshi Mochida is looking toward the next challenge.

MBA: Mr. Mochida, I appreciate your taking the time to speak with us. How did Sapporo perform last year?

MOCHIDA: Well, Sapporo sold 1.3 million cases in 1992, and this year we have been watching our depletions and shipments as a whole. Fortunately, at this time, both are up.

MBA: Did you do as well as you had hoped to do?

MOCHIDA: Actually, it was less than we expected. Our target was to increase our volume ten percent.

In 1991, we had the first decline since we established the company in 1984. So, in 1992 we wanted to come back to our starting point. We aimed to get 10 percent up. And, although the beer industry was facing serious conditions, we achieved around three percent.

MBA: How much of your volume is now outside the restaurant niche? What are the current percentages between on- and off-premise?

MOCHIDA: Our total nationwide?

MBA: Yes.

MOCHIDA: I don't have exact figures, but I can estimate based on the sales of specific items.

Our major item, the 22-oz. silver can, holds a 30-percent share of our total products being sold off-sale. Another 30 percent is the 21.4 oz. bottle, or second biggest item, and the 12 oz. bottle is the number-three item.

As you know, canned product is not a big seller in on-sale accounts. When consumers go to a restaurant, they usually don't order canned beer unless they have no other choice.-

The 21.4-oz bottle is sold mainly in Japanese on-sale. So that makes it 30-30, on- and off-, and another 40 goes to either side. Ten percent of the remaining product goes on-sale, and 30-percent goes off-sale. So it's about 40-percent on-sale and 60-percent off-sale nationwide.

MBA: Do you think there is potential for Sapporo to do more of their business off-sale?

MOCHIDA: Yes, I think so. We are certainly trying to build our brand recognition and expand our distribution network. We're attacking on-sale and off-sale.

Before we think about Sapporo, we need to consider the potential for Japanese and Asian beer as a whole. We've examined the question, "what do consumers expect from an imported beer?" Taste, image, fond memories and so on.

Traditionally, it is said that the image of the imported beer brand is the same as that of the country it comes from.

For example, the top ten brands in 1992 include four European, three Canadian, two Mexican and one Australian. American consumers have positive images of these countries. The image of Japan in the United States...well, hard to say.

Twenty years ago there were only a few people who showed any interest in imported beers from Japan. From the end of the 1970's this situation shifted due to the "boom" of Japanese products in America. It was a big chance for us. People tried to gather information about the business and culture of Japan. Japanese-made products received a significant spotlight from American consumers, and Japanese beer was no exception.

I think we were the first Japanese imported beer company to realize that movement, and we decided it was a good time to introduce Sapporo Draft in the large bottle. It had started to sell in Japan the year before, and created a big sensation.

Because it was the first introduction to the American market, it was thought to be a risky gamble. Also, our market research predicted poor consumer acceptance. Putting these negative thoughts aside, we decided to go ahead with the product. We knew with our long brewing history, since 1876, and our experience, that it is the flagship of the Sapporo company. More than that, we had confidence in the product, and its taste.

To answer your question, however, we are comfortable with the increase in our sales over the past ten years, as well as with the distribution network.

MBA: Do you think Japanese brands can ever break out of the restaurant niche?

MOCHIDA: We'd like to do it. We've tried to sell our products nationwide since the company was established. Now, we distribute in 50 states, with good distributors. It's an honor to us.

We've visited distributors all over the country, but we could not always convince them to carry our product because it was rarely sold outside small Asian restaurants. And, sometimes, even when we persuaded them to carry our brands, they soon had to drop off due to poor sales. It was so frustrating. Our situation was like trying to find water in a dry desert. It was one failure after another. It took a lot of patience and determination, and help from the distributors.

After doing business with various markets, we've found that the central part of the U.S. is a more conservative area. The cigarette is Marlboro. The beer, Budweiser. The restaurant, steak house. That area, it's hard to sell imported beer, especially beer from the Pacific Rim.

On the coastline, we believe we have potential to sell Japanese beer. The Japanese restaurants in this country are located mainly on the coastlines. From Seattle to Los Angeles, from Boston to Florida. California has more than 1200. New York has more than 500. As long as the number of Japanese restaurants has expanded, we have followed them.

But there aren't too many Japanese restaurants in South Dakota, and the state of Texas only has 50.

MBA: Will restaurants continue to be your primary means of expanding in the market?

MOCHIDA: Well, I still believe that the first place that Americans try Sapporo is in a Japanese restaurant. People who never had a Sapporo before, when they stop by the supermarket, they don't take a Sapporo. They don't know what kind of a taste it is.

Fortunately, the Sapporo Draft 21.4-oz. bottle has been carried in all Japanese restaurants, and has a good reputation in Japanese on-sale.

MBA: Is the number of Japanese restaurants still expanding?

MOCHIDA: So far, the number of Japanese restaurants has expanded. Now there are 3500 restaurants in the US, and 1/3 are in California. Along with the expansion of Japanese restaurants, sales for the Japanese breweries have increased. That was the first stage.

Now we are facing the second stage. We could not expect the number of Japanese restaurants to continue increasing at that pace. I don't think that we'll see another few hundred Japanese restaurants opening the Midwest, or even in California and New York.

During the first stage, our sales performance was very successful. The first stage, we have achieved. The first stage, we have achieved. Now? It's a good question. Do Japanese beer companies still have potential in the US market?

The sales increased along with Japanese restaurants. Now that the growth of Japanese restaurants has stopped, it will be difficult to increase our sales dramatically. Without Japanese on-sale, how can we sell Japanese beer to the American consumers? That's a good question.

MBA: Sapporo produces a number of critically-acclaimed specialty beers, the Sapporo black beer, Yebisu and Ginjikomi. Will you try to sell these beers as specialty products, outside the restaurant niche?

MOCHIDA: Well, we're trying to. We introduced the Ginjikomi, the large-size package, in October 1991. The 11.8 oz. can was introduced in the beginning of 1992. In September 1992, we introduced the 12-oz. six-pack of Ginjikomi. Unfortunately, sales have not expanded as much as we expected.

The American consumer isn't sure what the product is, because it's hard for Americans to identify the product from the Japanese name.

We considered it before we introduced it. Should it be the same package and name as in Japan, or not the same. For two or three months we discussed it. The decision was that it would be the same as the original. So we introduced it with the same product name and label as in Japan.

And we are asked all the time, "Ginjikomi? What does it mean?"

MBA: What does it mean?

MOCHIDA: It means "special brewing method" in English, because its made using a process which involves peeling the husk of the malt before mashing.

MBA: Have Japanese restaurants been receptive to carrying the additional brands, like Ginjikomi?

MOCHIDA: The first year, 1992, yes. They are always searching for new products, so they accepted it.

The Sapporo Draft is much more popular than the other products, and they are comfortable selling it. They want to take the Sapporo regular first, because they don't want to have any risk. They don't want to have any failure.

They know exactly how many days it will take to sell ten cases of Sapporo regular. But they don't know about Ginjikomi. If they purchase five cases, how many days will it take to be sold? And they have tried, but every time the sales of Sapporo regular are higher than Ginjikomi.

Also, not many restaurants want to carry two brands of Sapporo. They already have a brand from each of the other Japanese breweries, and all the different sizes, large can, large bottle...and they don't want to carry too much.

So, sales are O.K. But not as good as we had expected.

MBA: The Sapporo Black Beer seems to be in very limited markets. What are your plans for building that brand?

MOCHIDA: It's a very special beer. At convention tastings and at restaurant shows, people taste it, and say, "That's great, where can we buy it?" but it has never become a big seller.

Case sales are small, but there is no reason to quit, so we will continue, because we like to keep this item to show Sapporo's technical abilities.

MBA: How about Yebisu?

MOCHIDA: It's also a very special product, only sold in California. In the beginning, it was also sold in other areas, like Georgia.

Price-wise, it's higher than Sapporo Draft, and we've seen some of the same reaction as we experienced with Ginjikomi. The consumer doesn't know what it means. The name "Yebisu," in Japan is a god that brings us good luck, but American consumers don't know that.

Now we only sell it in our 1200 on-sale accounts in California. They know it's a special, higher-cost beer. So people who know their beer, they will drink it. But we cannot expect that much growth from the brand. Keeping it as one of the lines is our responsibility.

MBA: I notice that Sapporo has done some advertising in beer consumer publications, like All About Beer. Has that been effective in drawing beer enthusiasts to the brands?

MOCHIDA: Yes, I believe so.

MBA: Do you plan to introduce any additional Sapporo brands?

MOCHIDA: Now we have regular Sapporo, Ginjikomi, Yebisu, the Black beer, in large-size bottle, 16-oz. and 12-oz. cans and 12-oz. bottles.

We have full lines except light beer, so we may already have enough. But we do plan to do limited-edition beers for the summertime. We will be introducing a summer beer called "Hokkaido," named for the northern most Japanese island. It's made only with Hokkaido ingredients--Hokkaido barley, hops and water. We will introduce that in California. It will be sold June 1st to August 1st, as a limited edition, mainly sold to the Japanese market in California.

MBA: The Sapporo silver can is a very unique package. Does that continue to do good volume?

MOCHIDA: Yes, it does. It is such a unique shape, and it has been very well-received by the off-sale market, and now throughout Europe as well.

At restaurant shows we used to bring the silver can, and people would drink it, and say "Oh, it's very good, can I keep the can?"

MBA: Is the Japanese home market still as trend-driven as it was? Do you foresee any new trends from Japan making to the U.S. market?

MOCHIDA: In the past, the percentage of new products on the Japanese market was 15 percent of new product. Back during the time when dry was introduced, for example, each brewer would introduce 3-5 new beers each year. So there were 20-30 new products a year.

At that time, 15 percent of the market was new product, volume-wise. Now, it's less than 10 percent, more like 8 percent.

This means that general consumers in Japan, they don't care as much about the new products. They've realized that there's not a big difference; just name differences, package differences, design differences, and sometimes a brewing method difference, but not a major deal for the consumers.

If they find there is not a big difference, they forget about it. So the percentage of new introductions has declined.

Sapporo Japan, January through May, has not introduced any new products. Other breweries have introduced new products, but Sapporo has concentrated on a strong program for the regular draft. Sapporo's sales so far, percentage-wise, are number one. Sapporo Japan is 4.5 percent up, while the others are down a little bit, even with new products.

The beer industry in Japan has changed a bit. Consumers have decided to consume their preference. It used to be, when there was a new introduction, consumers would rush out, "I need to buy, I need to try."

Once somebody tried something, everybody wanted to try it. Then, six months later, "You're still drinking that?" So breweries were introducing all kinds of stuff.

Now, customers are checking out new products only if they are something really different or special. Also, many industries have been effected by the explosion of the "bubble." The economy has been bad; Everyone is cutting overtime, cutting the payroll, and fewer people are going out to the on-sale accounts.

MBA: Here in this market, what will you do to retain, and build your volume?

MOCHIDA: We will do what we can. Spread a few seeds, water them, give them light. Our market in the Japanese restaurant segment is secure, and we will try to expand from there.

MBA: Are you optimistic about Sapporo's prospects in this market?

MOCHIDA: Yes. We are encouraged by increasing sales and we will continue to develop packaging that reflects the image of Sapporo, and we will try our best to create a pleasant atmosphere for consumers.

MBA: Thank you for your time, Mr. Mochida.

Yoshi Mochida is the president of Sapporo U.S.A., the importing arm of Sapporo Breweries, Ltd. of Tokyo, Japan.
COPYRIGHT 1993 Business Journals, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Sapporo U.S.A. President Yoshi Mochida evaluates company
Publication:Modern Brewery Age
Article Type:Interview
Date:Jul 12, 1993
Previous Article:Beer from around the world.
Next Article:Uncapping a trend.

Related Articles
Sapporo selects Team One for draft account.
Sapporo U.S.A. opens two new branches.
Sapporo names new U.S. branch head.
Sapporo USA announces restructuring of distribution system.
Sapporo launches "ultra-premium" beer.
Sapporo unveils two-liter mini-keg.
Beers of the world.
Sapporo introduces Ginjikomi six-packs.
Sapporo plans aggressive campaign to expand its U.S. market presence.
Sumiyoshi appointed president of Sapporo.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters