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Beer Rises in the East: Japan’s Microbrewery Boom
How can craft brewers survive the global recession? Ask the Japanese.
Japan’s economy is in persistent deflation, reducing people’s prospects for financial growth and making business hard. As the country’s population ages, there’s a shrinking number of younger drinkers, themselves often burdened by having to support their elders.
Cost control is a problem, too. Only 20 percent of the country is suitable for habitation, making land prices eye-wateringly expensive. And with its climates generally unsuitable for hop and barley cultivation, most ingredients have to be imported from other continents.
Then, there is history. While beer is big in Japan—think Kirin, Asahi and Sapporo—it is not the traditional national beverage; saké, the brewed “rice wine,” fills that role. Saké has enjoyed a craft revival in the last 20 years, with 2,000 small-scale producers in the market. Ale has no such pedigree there.
So how come Japan’s microbreweries are making headway despite these currents? And are there lessons for craft brewers the world over?
Western influence in Japan dates from the mid-19th century, after Captain Matthew Perry of the US Navy, the original gunboat diplomat, eased his frigate into Uraga port, near Tokyo, and suggested the country open its borders for trade. Beer followed, and by 1869, Norwegian-American William Copeland had created the Spring Valley Brewery at Yokohama, which was sold to native investors in 1888 and became the Kirin Brewery Company.
Other government-backed, small breweries sprung up, but by 1900, fear of duplication had forced amalgamations. In 1908, a law was passed mandating a minimum annual beer production of 1,800 hectoliters. For an agrarian nation where beer drinking was confined to middle-class city types and foreigners, the target was huge.
The government-inspired result was a duopoly for Kirin and a brewery conglomerate called Dai Nippon, cemented in 1940 by a ten-fold rise in the legal minimum to 18,000 hectoliters a year.
After the war, Dai Nippon was split into Sapporo and Asahi “to increase competition,” though with another rise in the legal minimum size and existing brewers controlling all beer distribution, the only new players to arrive were Orion, set up to supply to US forces in Okinawa and, in 1963, a brewing arm for bar-owning wine and whisky makers Suntory.
To this day, Kirin, Asahi, Sapporo and Suntory retain 98 percent of the market. So how have they addressed the bad times? They have dumbed down.
Japan has a beer tax. To qualify for it, two-thirds of the fermentable sugars in a brew must come from malted barley. (The rest is usually rice.) To reduce the tax, brewers created happoshu—literally, “bubbly alcohol”—made with only 25 percent malt, and Third Category (“3C”) brews that have no malt at all, being made from maize, soy or other sugar sources.
Malt-free beer is not as alien in Japan as it might be elsewhere. As well as the saké tradition, post-war deprivation acclimatized people to characterless alcoholic drinks. By 2009, only half the “beer” on sale in the average supermarket reached the taxable definition, with over a quarter being 3C drinks.
Meanwhile, in 1994, three years into the economic downturn, the government dropped the minimum brewery size to just 600 hectoliters a year, giving newcomers three years to reach that level. Cometh the law, cometh the brewer, so enter “jibiiru,” literally “regional beer,” made by new microbreweries.
Not all of the 270 new ventures that are around in 2010 are dedicated to high-quality products, but craft beer magazine The Japan Beer Times estimates 30 percent are seriously on-message. The others are often under the wing of a bigger brewer, and play it safe.
The better producers punch well above their weight, making international standard beers in imported styles as diverse as Pale Ales and IPAs; Brown Ales, Stouts and Porters; Dortmunders, Müncheners and Bocks; Kölsch, Weizen and others.
The expansion has been nationwide, with each of Japan’s 47 prefectures (states/counties) boasting at least one new producer. The largest of these scrapes together 20,000 hectoliters a year, though most are at or below minimum size, depending on sales through a single brewery-restaurant, US brewpub-style. There’s even a BeerAdvocate-type website for crafts beer in the country: beerinjapan.com.
Some producers serve numerous local bars and restaurants, but few supply beyond their local area and most exporting is tentative. Their total market share is 0.3 percent and rising. With imports, this puts total craft beer sales at around 0.5 percent. This may not appear to be much, but in a market that’s exquisitely price sensitive, where a regular craft beer can cost five times as much as a 3C concoction, it is remarkable.
So how have these pioneers succeeded?
There are local factors. Jibiiru is increasingly found at farmers markets and in craft shops, and with Japan being a nation of gift-givers—at work, in the family and among friends—this makes it a respectable and popular present. Small brewers have also escaped the stranglehold of the large distributors by posting direct-ordering systems on their websites.
Then there is the issue of quality. During its economic boom in the 1980s, the Japanese were huge consumers of single-malt whiskies and fine wines. Hand-made beers are starting to enjoy a similar cache, but without the exorbitant price tag, playing to the Japanese love of distinctive flavors.
At Minoh on the outskirts of Osaka, sisters Kaori and Mayuko Ohshita have more or less forgiven their father for gifting them a brewery for their 18th and 21st birthdays on the condition that they brew beers for his chain of drink stores. They are currently reaping revenge in a good way by producing a range of staggering Stouts and world-standard Pales that should impress even the most discerning Westerner.
Commercially successful Yoho in Nagano produces over 10,000 hectoliters of beer a year for foreigners’ bars in Tokyo. Its prize-winning YonaYona Ale and Tokyo Porter even appear in cask-conditioned form, while English Old, a cask-aged Barleywine, sells in ceramic 75 centiliter bottles at top dollar.
But then, as with all adolescents, some are just out to shock. You can find beers made with shiso (beefsteak plant), “100 percent deep sea water” (a current health fad), yam, milk and an odd combo of seaweed and berg ice that turns beer blue. This is possibly more sensible than soothing it by serenading fermentation tanks with soundwaves of “healing music” to increase its health-giving qualities (and price).
One to watch will be the beer-brewing experiments of small-scale saké brewers. Traditional saké is brewed only in winter, leaving the equipment idle for the rest of the year. The Kiuchi Sake Brewery was first, with the Hitachino Nest brewery in 1996, whose products now include a 7.3 percent brew made with wild rice and saké yeast, and an IPA matured in cedar saké casks.
In a challenging financial environment, the “also ran” companies find it hard to survive. Two themes are starting to emerge from the successful ones. First, high-spec, authentic renderings of imported beer styles work—be it a US-style IPA or simply an all-malt Pilsner—because they can command a higher price.
Second, there is a desire to find Japan an authentic voice in international craft brewing through the development of distinctively Japanese styles. There may yet be mileage in the fusion of ancient saké brewing traditions with 21st-century craft beer making. It would be nice to see a range of drinkable rice beers at last.
If You Visit
by Taylor Seidler
Beer in Japan, the preeminent website for Western beer geeks who find themselves abroad, has developed a mobile application specifically for tourists in need of a good craft brew. The app includes a listing of some of the best beer venues in a handful of cities, including Tokyo, Osaka and Yokohama, as well as directions, contact information, available WiFi, coupons and more.
Information is stored in the app, so you can access everything offline and avoid those nasty data roaming charges. The Beer in Japan app runs on the iPhone, iPod Touch, iPad, Android and HP webOS. ■