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Suntory Beer Limited Business Strategy for 2018


WEBWIRE

Suntory Beer Limited conducts business based on its company vision of ďbringing excitement with outstanding taste.Ē In 2017, we attempted to create new demand for the beer category with initiatives including a major renewal of†The Premium Maltís†and the launch of†Itadaki*1, a new genre of high alcohol content beverage. In 2018, we will continue to pursue high-quality, good flavor with all earnestness, while also taking on the challenge of innovation including the generation of new contact points with consumers.

Review of 2017
The total market for the beer category in Japan*2†was estimated to shrink about 2% from the previous year. Under these circumstances, Suntory Beer Limited had total sales of 71.51 million cases*3†(on par with the previous year), as the sales volume surpassed the market size. Sales of the beer category, excluding non-alcoholic beer-type beverages, totaled 64.69 million cases (on par with the previous year), surpassing the results of the previous year.
Sales of†The Premium Maltís†brand were on par with those of the previous year at 17.05 million cases. With†The Premium Maltís, we engaged in thorough efforts to improve quality at the point of consumption, expanding our focus to the moment the characteristics of the product, namely the rich flavor, overflowing flowery aroma and creamy beer foam, are enjoyed at home or a drinking establishment. We also rolled out a major Friday-themed promotion to stimulate demand worthy of a premium beer.†The Premium Maltís†Kaoru Ale achieved double-digit growth for the second consecutive year since its launch thanks to efforts to popularize premium ale beer suited to the Japanese palate.
The market for new genres was estimated to shrink about 1% from the previous year. Despite these circumstances, total sales of new genre beverages reached 42.64 million cases (up 4% year-on-year) for a record-breaking sales volume. As for†the Kin-Mugi†brand, aggressive marketing activities were rolled out for†Kin-Mugi†and†Kin-Mugi†(75% Less Sugar)*4, and the brand sold a total of 35.87 million cases (down 2% year-on-year).†Itadaki†stimulated latent demand for a new genre of high alcohol content beverage, selling 2.22 million cases and contributing to an increase.
In addition to product renewal, we attempted to create new demand for the†All-Free†brand by such means as proposing adding ice to it in the summer, and 6.74 million cases were sold (down 3% year-on-year).

*1 In a comparison of original wort extract concentration, alcohol percentage and carbon gas concentration (comparison with Suntoryís Liqueur (Effervescent) (1) products [excluding seasonal products])

*2 Includes non-alcoholic beer-type beverages

*3 One case is equivalent to twenty large (633 mL) bottles

*4 Compared to Suntoryís†Kin-Mugi

Strategy for 2018
The total market for the beer category in Japan and the beer market in Japan excluding non-alcoholic beer-type beverages are both forecast to shrink by about 2% from the previous year. We will continue to focus our marketing activities on the three core brands of†The Premium Maltís,†Kin-Mugi, and†All-Free†this year to stimulate new demand and provide added impetus to the beer market. Additionally, we will develop†Itadaki†to secure a solid position in the new genre of high alcohol content beverages. Suntory Beer Limitedís goal is to sell 72.20 million cases (up 1% year-on-year) with the aim of selling 65.20 million cases (up 1% year-on-year) in the beer category.

The Premium Maltís brand
The target is to sell 17.30 million cases (up 1% year-on-year) for†The Premium Maltís†brand. We will continue to roll out big promotions focused on beer foam and Fridays and will ramp up our efforts to stimulate new demand for premium beers.

The Premium Maltís
Calling the creamy beer foam of†The Premium Maltís†produced by a special way of pouring ďCREAMY FOAM,Ē we will roll out big promotions throughout the year.
We will also roll out promotions showing people having some rich moments with†The Premium Maltís†on Fridays when there are many occasions to drink beer as a reward for a job well done.

The Premium Maltís Kaoru Ale
In December 2017, we renewed the product, further improving the refreshing aroma and pleasant aftertaste while keeping the popular fruity flavor as-is by reevaluating the manufacturing process. We aim to achieve further penetration of premium ale beer suited to the Japanese palate as the second pillar of†The Premium Maltís†brand.

Kin-Mugi brand
The target is to sell 35.90 million cases (surpassing the previous year) for the†Kin-Mugi†brand.
We will further pursue our dedication to barley, which we have placed importance on since the launch of†Kin-Mugi†in 2007. In December 2017, we renewed the product, adjusting the balance of the aroma to make it more barley-like. In November 2017, the ďumami maltĒ*5†in†Kin-Mugi†(75% Less Sugar) was increased, renewing it as a new delicious functional beer genre. This year we aim to achieve brand growth as a new delicious genre dedicated to barley with the two core products of†Kin-Mugi†and†Kin-Mugi†(75% Less Sugar).

*5 Has particularly high umami (protein) content for a two-rowed barley malt.

Itadaki brand
The target is to sell 4.8 million cases (up 116% year-on-year) for the†Itadaki†brand. As of Tuesday, February 6, the brand will be renewed with 8% alcohol content as a brand offering rich flavor and drinking sensation along with ease of drinking leading the prominent category of the new genre of high alcohol content beverages.

Non-alcoholic beer-type beverage All-Free
The target is to sell 7 million cases (up 4% year-on-year) for the†All-Free†brand. A renewal will be implemented for†All-Free, with the 0.00% alcohol, zero calories*6, zero carbohydrates*7†and zero purine*8†features left unchanged, while giving it a pleasant feeling as it goes down and providing stylish packaging using the color blue for the first time. It will be launched on Tuesday, February 13.
All-Free Collagen†will be re-launched as†All-Free Collagen Rich†and given a fruitier taste starting in late January.

*6 Based on the Nutrition Labeling Standards, less than 5 kcal of calories per 100 mL is considered zero calories.

*7 Based on the Nutrition Labeling Standards, less than 0.5 g of carbohydrates per 100 mL is considered zero carbohydrates.

*8 Less than 0.5 mg of purines per 100 mL is considered zero purine.


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