Business Reboot 2/Adjusting beer sales tactics in Japan to suit new environment
11:27 JST, April 23, 2021
The prolonged coronavirus crisis is slowly but surely reframing the once-familiar habits of people getting together in bars and pubs, chatting and hobnobbing, quaffing precious glasses of beer.
Beermakers have been trying to navigate through this by exploring new ways to reach the market. This is the second in a series to take a close look at the beer and similar beverage industry.
“Making a slight change to your menu could lead to a customer ordering another beer, resulting in more sales.”
Ryota Nakazato is in the sales department at Kirin Brewery Co.’s Kanagawa office and he makes the rounds to visit his customers’ eateries, whose sales have plummeted because of the coronavirus pandemic. Nakazato carries with him pamphlets titled “Kirin ga Iku,” which is a pun on “Kirin ga Kuru” (Awaiting Kirin), a historical drama series that aired last year on NHK. The pamphlets suggest menu ideas that have proven successful at other eateries, such as offering an evening drink set to a single-person customer.
A salesperson has an opportunity to shine if they are able to make a suggestion that could lead to an increase in sales for their customers. The nationwide popularity of Mongolian barbecue in the early 2000s is said to be because of a suggestion made by a salesperson from Sapporo Breweries Ltd.
Prospects remain dim for restaurants and bars in municipalities where priority measures to prevent the further spread of the coronavirus have gone into effect. According to Teikoku Databank, Ltd., there were a record 780 restaurants and pubs that went bankrupt in 2020, with bars and beer halls accounting for about ¼ of them.
As sales to eateries and pubs account for about 30% of a beer company’s sales, the success of these businesses translates to the success of the breweries. In 2020, their sales to restaurants and pubs almost halved.
“I have received more management-related questions [from my customers], such as how to apply for a subsidy from the local government or ways to cut fixed costs,” said Yumiko Ogawara, a saleswoman of Asahi Breweries, Ltd. who is in charge of about 250 restaurants and pubs in central Tokyo, including Nihombashi, Akasaka and Otemachi.
By suggesting such ideas as providing a case for customers to place their masks into while eating, or ways to procure acrylic shields, she is exploring various solutions so her customers can survive the pandemic.
Old vs new
The method in which beer breweries sell to restaurants and pubs in Japan requires a person to visit as many establishments as possible to build their customer base. During the day, a salesperson would visit wholesalers and liquor stores, and at night, they would visit restaurants in busy areas and meet with the managers. Unannounced visits by those in sales were the norm.
For example, if a salesperson overheard that someone from a rival company made a mistake and angered the owner, it could be an opportunity for their company to grab the contract. Once a deal is inked, it could lead to five or even 10 years of consistent sales.
Behind the scenes, the business was cutthroat so companies could gain market share. Since the 1990s, Asahi Breweries and Kirin Brewery fought for the top spot. Suntory Beer Ltd., which had been always ranked fourth since its entry into the beer market, finally caught up to Sapporo and took third place in 2008. Suntory Beer scrambled and fought for every crumb, even when the beer market was contracting.
“When it came to selling the product, rough estimates with no thought to actual costs prevailed and it left many people feeling skeptical about such practices,” said a Suntory senior official.
The COVID-19 pandemic has put pressure on the industry to change such sales practices.
“We are now in a time when customers would not appreciate a salesperson dropping by just to see ‘how things stand,’” said Atsushi Katsuki, president of Asahi Group Holdings Ltd. “Salespeople need to have a purpose when visiting [potential customers].”
Shifting sales strategy
At Shokuji-dokoro Aoi Honten, a restaurant in Toyota, Aichi Prefecture, Mie Ninomiya, an employee, was easily able to replace a plastic bottle of draft beer. She was refilling “Tappy,” which is a draft beer tap developed by Kirin Brewery and has been used in such regions as Chubu and Kyushu since November.
Traditionally, draft beer kegs for businesses were made of stainless steel and would weigh more than 10 kilograms, making transport labor-intensive. Then to connect it with a high-pressure gas system was not an easy task.
“It used to require two men to carry one tank. It’s so much easier now,” said Ninomiya.
The bottle only contains three liters and has to be replaced more frequently, but Ninomiya said they can serve beer that is fresh even when sales are inconsistent amid the pandemic, leading to less wasted beer.
Hiroaki Hidaka, a Kirin Brewery employee, said: “Because we got used to the conventional system, we didn’t change it for about 50 years. We didn’t understand the problems restaurants had.”
While more women and foreign residents are working in restaurants than before, labor shortage and its aging workforce have become a problem in the logistics industry.
“The challenges the industry faces could be solved instantly,” said Hidaka. “This is a container revolution.”
Takashi Nagai, a journalist knowledgeable about the beer industry, said: “Beer is deeply entrenched in everyday life. It will be necessary to change the way sales are done from having salespeople visit as many eateries as possible when the market was expanding, to a new method that would be more suited to a contracting market.”
"Business" POPULAR ARTICLE
-
Japan’s Economy Expands Annualised 0.9% in Q3 on Tepid Capex
-
BOJ Policy Normalization to Support Long-Term Growth: Ueda
-
Nissan President Uchida Facing Hard Time on 5 Years After Taking Office; Future of Nissan Uncertain
-
JETRO Draws up Guidelines for ‘Wagyu’ Labeling in U.S.
-
Ex-MUFG Bank Employee Steals Customer Assets Worth over ¥1 Bil.
JN ACCESS RANKING
- APEC Leaders Vow to Maintain Free Trade System
- Malaysia Growing in Popularity as Destination for Studying Abroad; British-style Education Available at Low Cost
- Ministry Eyes Improving Night-School Japanese Lessons; Aim Is To Help Foreigners Complete Junior High School
- China to Test Mine for Rare Metals Off Japan Island; Japan Lagging in Technologies Needed for Extraction
- Miho Nakayama, Japanese Actress and Singer, Found Dead at Her Tokyo Residence; She was 54 (UPDATE 1)