Suntory Beer Limited Business Strategy for 2019

Suntory Beer Limited conducts business based on its company vision of “bringing excitement with outstanding taste.” In 2018, we attempted to create new demand for the beer category with initiatives including changing the beer selection criterion to foam with The Premium Malt’s brand “creamy foam” promotion and revamping All-Free. In 2019, we will continue to pursue high-quality, good flavor with all earnestness, while also taking on the challenge of innovation including the creation of drinking demand for new beers.

● Review of 2018
The overall beer market in Japan^*1 was estimated to shrink about 4% from the previous year. Under these circumstances, Suntory Beer Limited sold 69.93 million cases^*2 (down 2% year-on-year), outperforming the market. Sales of the beer category, excluding non-alcoholic beer-type beverages, totaled 62.99 million cases (down 3% year-on-year).
Sales of The Premium Malt’s brand were on par with the previous year to 17.11 million cases. We thoroughly highlighted the beer-specific value of foam with the “creamy foam” of The Premium Malt’s, made possible by the carefully selected ingredients, production method, and way of pouring. We also worked on further penetration of premium ale beer made for the Japanese palate with The Premium Malt’s Kaoru Ale, achieving double-digit growth for the third consecutive year since its launch.
The new genre sales volume was 41.92 million cases (down 2% year-on-year). As for the Kin-Mugi brand, aggressive marketing activities were rolled out for the two pillars of the Kin-Mugi brand, Kin-Mugi and Kin-Mugi (75% Less Carbohydrate)^*3, and the total sales volume for the brand was 34.67 million cases (down 3% year-on-year).
In regard to the All-Free brand, the contents, package, and communication were all revamped for the core All-Free product. We also attempted to create new demand for the All-Free brand by such means as proposing adding ice to it in the summer and offering new products for drinking at work. As a result, the sales volume grew to 6.86 million cases (up 2% year-on-year).

*1 Includes non-alcoholic beer-type beverages

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

*3 Compared to Suntory’s Kin-Mugi

● Strategy for 2019
The overall beer market in Japan and the beer market in Japan excluding non-alcoholic beer-type beverages are both expected to be down about 2% year-on-year.
We will work to create new drinking demand and revitalize the overall beer market by increasing the value of existing brands and launching innovative new products. We will also work on corporate branding centered on mineral water Suntory Tennensui, including product packaging-based appeals, to create fans of Suntory beer in the medium to long term. Suntory Beer Limited’s goal is to sell 71.7 million cases (up 3% year-on-year) with the aim of selling 64.6 million cases (up 3% year-on-year) in the beer category.

▼The Premium Malt’s brand
We aim to sell 17.3 million cases (up 1% year-on-year) of The Premium Malt’s brand products. Continuing on the heels of the well-received “creamy foam” promotion, we will roll out grand promotions this year to change the criterion for selecting beer to the foam. Off-premise, we will introduce products with cans featuring impressive visual designs showing creamy foam. In February, we will open the flagship “Kamiawa Bar” in Yaesu, Tokyo. We will also launch a limited volume of The Premium Malt’s Master’s Dream (Yamazaki cask aged beer blend), highlighting our dedication to craftsmanship.

▼ICE DRAFT〈NAMA〉
On Tuesday, March 19, we will launch Ice Draft〈NAMA〉 exclusively at drinking establishments nationwide to revitalize the on-premise beer market on hot days.

▼Kin-Mugi brand
With the Kin-Mugi brand, we aim to achieve substantial growth, selling a record 37.5 million cases (up 8% year-on-year). In the 13th year since the launch of Kin-Mugi, we will revamp the contents, package, and communication for the first time. Kin-Mugi (75% Less Carbohydrate) will be renewed for even better taste, using the largest amount^*4 of umami malt^*5 ever. We will also launch Kin-Mugi (Gold Lager), the brand’s first new year-round product in five years, for further revitalization of the authentic richness category, which is experiencing growing demand within the new genre market.

*4 Compared to Kin-Mugi (75% Less Carbohydrate) of the past

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

▼MAGNUM DRY HON-KARAKUCHI
We will revamp the Magnum Dry happoshu, which was a big hit with its dry, delicious taste, and launch the new MAGNUM DRY HON-KARAKUCHI to create an authentic sharpness category within the new genre market.

▼Non-alcoholic beer-type beverage All-Free
We aim to sell 7.1 million cases (up 4% year-on-year) of All-Free brand products. Further improving the taste of the mainstay All-Free product, we will actively entice those who do not drink non-alcoholic beer-type beverage due to dissatisfaction with the taste and work to further revitalize the market.