Suntory Beer Limited Business Strategy for 2020

Suntory Beer Limited conducts business based on its company vision of Brewing the Ultimate Beer Tradition. In 2019, we attempted to create new demand for the beer category with initiatives such as accelerating promotions for “Kamiawa”, which characterizes The Premium Malt’s brand, revamping the Kin-Mugi brand for the first time in the 13th year since its launch, launching Kin-Mugi Gold Lager in the authentic richness category and launching the KARADA-WO-OMOU All-Free , which is an All-Free brand with function claims. In 2020 too, we will continue to earnestly pursue high-quality craftsmanship and the best taste while working on new innovations, including creating new value for beers.

●Review of 2019
The overall beer market in Japan^*1 was expected to shrink about 2% from the previous year. Yet, our key brands The Premium Malt’s, Kin-Mugi and All-Free outperformed the market by selling 71.07 million cases^*2, up 2% year-on-year due to successful marketing. Excluding non-alcoholic beer, our beer sales volume was 63.65 million cases (up 1% year-on-year).
The Premium Malt’s brand sales rose 1% year-on-year to 17.26 million cases. We thoroughly highlighted the beer-specific value of foam with the “Kamiawa” of The Premium Malt’s, made possible by the carefully selected ingredients, production method, and way of pouring, and rolled out promotions to change the criterion for selecting beer to the foam. 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 fourth consecutive year since its launch.
The new genre sales volume was 43.21 million cases (up 3% year-on-year). In the 13th year since the launch of Kin-Mugi, we revamped its contents, package, and communication for the first time. As for the Kin-Mugi brand, we launched the Kin-Mugi Gold Lager in the authentic richness category, in addition to the existing Kin-Mugi 75% Less Carbohydrate^*3. The new product achieved 2.2 times the annual sales volume initially planned and the total sales volume for the brand drastically increased to 38.47 million cases (up 11% year-on-year).
In regard to the All-Free brand, we launched KARADA-WO-OMOU All-Free, the brand’s first product with function claims for visceral fat. It performed well, with an annual sales volume 1.7 times the initial estimate. As a result, the overall sales volume of the brand grew to 7.35 million cases (up 7% year-on-year).

*1 Including non-alcoholic beer

*2 Converted to large bottles (1 case=633 ml x 20)

*3 Compared to our Kin-Mugi product

●Strategy for 2020
The overall beer market in Japan and the beer market excluding non-alcoholic beer are both expected to shrink about 4% from the previous year.
We will work to create new drinking demand and revitalize the overall beer market by increasing the value of our key brands Kin-Mugi, The Premium Malt’s and All-Free as well as delivering new value. We will continue our corporate branding centered on mineral water to create fans of Suntory beer in the medium to long term. Our aim will be a total of 71.50 million cases (up 1% year-on-year) and 64 million cases of beer (up 1% year on year).

▼Kin-Mugi brand
For the brand total, we will aim for 38.70 million cases (up 1% year-on-year). We will simultaneously renew Kin-Mugi 75% Less Carbohydrate and Kin-Mugi Gold Lager and start the use of luxury malt^*4 to strive for a delicate balance between the “umami” found in malt and an easy-to-drink characteristic so that customers can enjoy them with everyday meals. From spring this year, we will also highlight the new value of drinking the Kin-Mugi by offering products tailored to the four seasons of Japan. We will adjust the flavor in each season based on the careful craftsmanship of the Kin-Mugi brewers.

*4 A blend between carefully cultivated domestic malt and umami malt, which has particularly high umami (protein) content for two-rowed barley malt.

▼The Premium Malt’s brand
We aim to sell 17.35 million cases (up 1% year-on-year) of The Premium Malt’s brand products. Continuing on the heels of the well-received “Kamiawa” promotion, we will strive to change the customers’ criterion for selecting beer to the foam. We will also simultaneously renew The Premium Malt’s and The Premium Malt’s Kaoru Ale for better taste and foam quality. We will use our in-house rich Kamiawa manufacturing technique^*5 to give The Premium Malt’s an aftertaste with a greater balance between “deep richness”, “gorgeous aroma” and “pleasant mouthfeel.” We will also use the same technique for The Premium Malt’s Kaoru Ale to increase its taste and foam quality. We will enhance its “light aftertaste” using the rare Calista hop while maintaining its characteristic “fruity and rich flavor.”

*5 A brewing process to increase the density of high molecular weight proteins in beer

▼All-Free non-alcoholic beer
We aim to sell 7.50 million cases (up 2% year-on-year) of All-Free brand products. We will revamp the contents and packages of the All-Free brand products and increase their beer-like taste to make them more refreshing while maintaining the claims of their alcohol-free, calorie-free^*6, sugar-free^*7 and purine-free^*8 functions. We will also strive for further expansion of the foods with function claims category by rolling out grand promotions in the seasons of increased health awareness for the well-received KARADA-WO-OMOU All-Free with function claims.

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

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

*8 Based on the Nutrition Labeling Standards, less than 0.5 mg of purine per 100 mL is considered purine-free.

▼Tokyo Craft brand
For the Tokyo Craft brand, we will aim for 160,000 cases (up 42% year-on-year). The Tokyo Craft brand is a beer brand created with affection and respect for “Tokyo” by Suntory Beer, which has brewed beer based on themes of tradition and innovation in Musashino, Tokyo, for half a century. As globally recognized events and sports tournaments bring more and more of the world’s attention to “Tokyo,” we plan to renew both the contents and the packaging for sale.