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Japanese sparkling water beer is the medicine that helps the salaryman endure their boss’ off pitch karaoke during the frequent work parties. It is the refreshing, crisp drink that gets the common Japanese red-faced in only half a pint. Those who have had the pleasure of drinking the more popular “dry” variety  can probably describe them as having a distinct mute flavor and aroma, yet sharp delivery. Definitely a departure of the pale lager’s typical hoppy bitterness.

But has Japanese beer always been so light and easily drinkable? Nope.

Before the bubble, Japan’s beer market was populated by the more typical pale lager with the bitter note flavor profile. The similar flavors that the Japanese was introduced with when the Dutch opened beer halls in the 17th century to accommodate the sailors running the trade routes. Why the transition to a lighter tasting beer? It’s the result of one of the many beer wars among Japan’s four major breweries that began in the 1960s.

In order to understand the Dry War, some context is needed. So grab a Super Dry, or the equally appealing, a Kirin Ichiban and kick back.

Events leading up to the Dry War

Modified Source: Tofugu / Original Photo Source: Asahi

Prior to the Dry Wars that began in 1985, Japan’s beer industry was made up of an oligopoly of beer brewers: Kirin, Asahi, Sapporo, and Suntory.

Kirin dominated the market after World War II and had a 61% share between the mid 70s and up until ’85. Sapporo was a distant second with its 20%-25% variable share, followed by Asahi’s 9%-13% and Suntory’s 5%-9%.

Asahi and Sapporo used to be one entity known as Dai Nippon Brewery. Due to postwar anti-monopoly laws set out to dissolve the zaibatsus, the clique was split into the two we are familiar with today: Asahi Brewery and Nippon Brewery (shortly renamed to Sapporo Brewery).

Because of the high entry barriers in advertising costs, distribution, and government regulations, the four breweries dominated the market. Prior to 1985 and after World War II, only two firms have attempted entry into the beer market. Takara, a distillery, entered in 1957, but shortly withdrew eleven years later. The other was Suntory, whom entered in 1963 and still remains despite having a weak presence in the beer market.

Ok. Not exactly a commercial dating before the 1980s. But it has the Yellow Magic Orchestra!! Ryuichi Sakamoto!

Government regulations at the time favored nonprice competition in the beer industry, meaning a stable and reliable source of taxes for the government. With no option of competing in price, the available points of engagement for the breweries to compete with their competitors were product quality, advertising, and control & development of distribution channels. This favored heavily with Kirin since it had the resources to invest heavy-handily into the three groups. Kirin also established a strong reputation among the consumer, having it’s name synonymous with beer.

The bottom trifecta’s best chance of gaining any marketshare was to invest in product development and innovation. This led to many mini wars.

Up until 1964, Japanese canned and bottled beer went through a heat pasteurization process. Interest in draft beers grew in the nation, which led to R&D investments into bottling “draft” beers. What is known as the draft wars came into fruition. Suntory marketed the first pure draft beer in 1967, which utilized a microfilter developed by NASA. Asahi followed with their pure draft variant in 1968, followed by Sapporo in 1977, and Kirin in 1981. Shortly after its introduction, draft beers accounted for 41% of the market share in 1985. However, the total marketshare in the beer industry between the four groups have not change significantly.

The next notable war was dubbed the container wars in the late 1970s. Each company attempted to differentiate themselves by coming up with various bottle and can designs. Asahi and Suntory started the fight, then Sapporo and Kirin joined soon after. Just like the draft wars, the war fizzled out in the early 1980s with no change in marketshare.

From these two wars, a certain pattern became clear. Whenever one of the lesser breweries introduce a new innovation into the market, it was quickly imitated. If the trend was any threat to Kirin, the brewery would use its overwhelming resources to suppress their competitors growth and the market would be back to its original balance.

Why didn’t Kirin just come out and crush the competition with their own innovations? Why were they so slow to react when a new innovation into the market comes along? Anti-monopoly laws. Already a dominant force in the market, Kirin tried not to be heavy-handed in their reactions to avoid being in the spotlight of anti-monopoly whistle blowers. The bottom three also learned that any form of aggression must be handled carefully, otherwise Kirin will step in and subdue any of their attempts.

Then came the mid-1980s, the decade where the Japanese economy was at the top of the world and the center of attention.

Wave of new beer products

Photo Source: Tofugu

The 1980s brought about a new wave of changes in the Japanese consumer and the market environment.

  • Changes in competition
    Foreign brands of beer had entered the market at full force and marketed at well below cost when compared to the domestic brands (due to the favorable exchange rate at the time).
  • Changes in distribution
    Due to more singles and younger couples living in small urban apartments, the option of buying larges cases of beer was forgone for buying individual cans from vending machines, convenient stores, and the market. This opened up the option for the consumer to explore different brands and types of beers.
  • Demographic trends
    The dominate consumer of beers has now transitioned to those born postwar, a generation that has acquired more modern tastes and are looking to distinguish themselves from the older generation
  • Dietary changes
    Japanese diet had grown more richer. To complement the richer diet, a lighter-tasting beer is more suited. Oil and fats purchased per household nearly doubled, while sugar and salt consumption drop by half between 1965 and 1985.
  • Social change
    More and more females, especially the younger trend setters, began drinking beers. Their taste was found to be more towards the lighter spectrum.
  • Economic change
    Income for the typical Japanese has rised dramatically. With the increased income, self-expression replaced homogeny. Beer became less of a commodity.

From the list of changes, it became clear that the consumers were demanding for new tastes and variety.

Three out of the four breweries took note of these changes and started introducing a variety of niche beer products produced in low volumes.

Data Source: [1] / Photo Source: Tofugu

Producing niche products in small volumes didn’t affect the marketshare landscape. And one of the breweries recognized this.

Asahi in the 1980s had fallen in a rough patch. Due to poor profit performances, decreasing marketshare, and forcing early retirements for senior employees, the company was forced to come up with a new bold product strategy.

Instead of making niche products that would offer small marginal returns, Asahi’s product researchers knew they needed to create a new flagship product. Analyzing the environmental changes, it was hypothesized that beer taste preferences were related to dietary makeup. Before the changes, Kirin’s flagship lager dominated the market due to it’s bitterness complementing well with the lighter Japanese diet. Since the Japanese diet has shifted, the consumer taste in beers was ready for a shift as well.

To test this hypothesis, a survey was conducted in 1984 and it was found that Japanese beer drinkers were looking for two qualities: く koku (rich taste) and kire (sharp and refreshing). Conventional wisdom at the time suggested that you can have one or the other, but not both.

That didn’t stop Asahi, though.

Asahi R&D was tasked to create a beer that was both more koku in taste than the Kirin Lager and more kire than the most kire beer out the in the market, Sapporo’s Black Label.

And they delivered. The introduction of the new koku-kire beer in 1986 helped increased Asahi’s sales by 12%.

With the newfound success, Asahi knew they were on the right track. Asahi researchers then hypothesized that the market was moving further and further away from koku and more towards kire. This hypothesis resulted in the birth of Asahi’s Super Dry.

Modified Source: Tofugu / Original Photo Source: Asahi

On the date of its release in 1987, the dry lager immediately became the company’s top seller. It was so popular that Asahi prohibited its employees from purchasing the product in order to save it for the customers. Kirin, Sapporo, and Suntory brushed it off as a fad and thusly didn’t immediately produce a rival product.

This was a big mistake.

13.5 million cases of Super Dry was sold in 1987, which led to a 33% jump in sales. By 1989, Asahi’s marketshare increased to 25%, overtaking the second marketshare leader, Sapporo. The dry brew cannibalized into Kirin’s market share, which dropped by 11%. By the end of 1989, Super Dry accounted for 20% of all beers consumed in Japan. This success allowed Asahi establish important new distribution channels and sales outlets.

By the time the other breweries wisened up, Asahi solidified itself as the king of dry beers.

Aftermath

How did it play out for Asahi and the others since the introduction of Super Dry? Many attempts of introducing the next beer or imitating the dry taste fell flat. By 1993, all attempts of copying the dry beer was abandoned, conceding the dry beer segment entirely to Asahi. As of 2010, Asahi held the number one marketshare spot with 38%, while the runner-up, Kirin, is not far behind with 37% [2].

All thanks to the watery light, cool, sharp, refreshing taste of Super Dry.


[Header Source] Tofugu

[1] Craig, T., (1996). The Japanese Beer Wars: Initiating and Responding to Hypercompetition in New Product Development. Organization Science, Vol. 7, No. 3. Retrieved January 5, 2012.
[2] Fujimura, N., (January 16, 2011). Asahi Reclaims Lead in Japan’s Beer Sales Over Kirin as Market Declines. Bloomberg, http://www.bloomberg.com/news/2011-01-17/asahi-reclaims-lead-in-japan-s-beer-sales-over-kirin-as-market-declines.html. Retrieved May 1, 2012.

  • Anon

    I love Asahi beer.  It’s such a nice change from all the draughts here in Australia :)  I always get Asahi if i’m buying beer from a liquor store.

  • Mescale

    So you feel that Japanese Beer is like Sparkling Water because of the flavour? 

    Tell us your beer preferences so we can judge you.

  • http://www.tofugu.com koichi

    C’mon, mang. Miller High Life > Asahi Super Dry. It’s the champagne of beers, after all. So classy.

  • Michael

    Tried Asahi and Kirin Ichiban for the first time pretty recently, actually.  Not exactly a big drinker, but I definitely preferred Asahi.  Kirin had a bit of a… strange taste to it.  Can’t quite think how to describe it, but it was a little… grape-like? Haha.  Still need to try Sapporo (the little supermarket where I live sells all 3 brands; seem to be pretty common in the UK, though not sure about Suntory).

  • http://www.tofugu.com koichi

    Porters, Browns, and Stouts are where all the fun’s at.

    I will probably indeed be judged heavily by this, but I think my favorite mainstream-ish beer is the Rogue Hazelnut Brown.

  • http://www.vietamins.com Viet

    My mother told me not to feed the trolls. Especially one’s that have cooties and refuse to go to the doctor :)

  • http://www.vietamins.com Viet

    But really Mescale. What Koichi listed plus IPAs.

  • http://www.tofugu.com/ Hashi

    I only drink Zima.

  • Issississimo

    Sparkling Water actually is a pretty good way to characterize the taste and I’m not saying that as an insult.  I’d rather be drinking sparkling water than some of the domestic macro-brews here in the US. *shudder*

  • http://www.tofugu.com koichi

    Mmm, Hite… good memories of living next to Korean groceries…

  • Mescale

    I suppose I get where you’re coming from, now I think about it I’m preferring the stout end of the spectrum myself. 

    But then in old blighty we call that kind of stuff real ale, I’d consider the J-beers to be more akin to the hideous mass produced stuff like Fosters, Carling, Heineken, Stella, etc. I guess you could say that they’re lagers and not beers, I don’t care the difference, calling them either is perhaps more of an insult to true beers and lagers.

    Next an article on Japanese whisky, then I can get all high and mighty about single malt single cask non chill filtered etc. etc.

  • Mescale

    You’re mean でござる

  • http://www.vietamins.com Viet

    We <3 you here Mescale. It's not mean if we <3 you.

  • http://www.tofugu.com koichi

    I would love to do a whisky post… I imagine it would involve a lot of taste testing… yes..

  • Brandon Inoue

     Been noticing a few micro brews coming out of Japan lately.  Probably have more stage presence here than there though.  I still want to try the Hef and Stout.

    Ah, Japanese Beer.  Doesn’t matter which one you pick.  They all taste better than the macros here.  Some of my fondest memories are after long days of travel, eating Japanese “stamina” bar foods, and chugging a huge ice cold glass of Nama Asahi. 

  • HonestAbe

    “What kind of beer do you like? Heineken. Heineken? Fuck that shit! Pabst Blue Ribbon!”

    All joking aside, I have to agree sparkling water is a pretty good description for Japanese Beer. Not to say that I wouldn’t drink Japanese beer over say Bud, Bud Light, Coors, etc..

    My beers of choice are La Fin Du Monde, Pliny the Elder, Damnation and for cheap beer (buy a 12 pack for 4 bucks) is hands down….Pabst Blue Ribbon!

  • ChaseM314

    I hate the US. Macro-brews.  I mistakenly thought that was all there was, and hated beer, untill I lived in Germany for a short time.  Now I love some beer.  Hofbrauhaus Dunklel, St. Bernardus, and Rochefort 10 are my favorite.  The later two are actualy Belgian ales. 

  • Mescale

    They must do brewery tours, I don’t suppose the breweries are all lined up on a single river though like in scotland.

  • http://www.tofugu.com koichi

     ooh yeah, German/Belgian brews are my faves too

  • HonestAbe

    …and Boone’s.

  • http://www.tofugu.com koichi

     Pabst Blue Ribbon: The beer of hipsters.

    That being said, I enjoy a Pabst after a softball game or something. So hydrating!

  • Mescale

    You should know my computer was poorly for a while, but I made it better (without doctor help) and now I am trolling in 64 bits. I did this for you.

  • http://www.vietamins.com Viet

    Ahh didn’t know our vampire hunting former President was a hipster…. 

    .. or maybe a blue collar worker??

  • Mescale

    I think you’ll find he liked Pabst Blue Ribbon before it got popular.

  • http://www.vietamins.com Viet

    Yeah, it seems the microbrew scene is picking up some in Japan. I’ve been eyeing Hitachino for a while. http://www.kodawari.cc/?en_home/products/hitachino-nest-beer.html

  • http://www.vietamins.com Viet

    I imagine so. But he liked PBR before it even existed. Totally hipster.

  • http://www.tofugu.com/ Hashi

    If Gran Torino taught me anything, it’s that PBR is the beer of crotchety old white dudes.

  • http://www.tofugu.com koichi

     Obviously a play from hipsters to try and make pbr more ironic.

  • トム ジェンセン

    Super cool article!

  • kuyaChristian

    Today’s the worst day to be under US legal drinking age… I’m completely lost. At first I thought all beer tastes the same… oh such ignorance. My 21st birthday need to come soon. And I still owe Viet a beer.

  • ですこ

     Rubbing alcohol. I put that s*** on everything.

  • http://www.tofugu.com/ Hashi

    Oh boy, will you be in for a surprise.

  • http://www.vietamins.com Viet

    Ahh, my dear young kaibigan. Beer comes in many shapes and flavors. For example, this gross monstrosity http://rogue.com/beers/voodoo-bacon-maple.php

  • http://hanlonsrzr.blogspot.com/ Antisthenes

    In that case, let me introduce you to ‘Nonjatta’, an excellent J-whisky site (not mine), with a review of a whisky I rather like:
    http://nonjatta.blogspot.jp/2007/04/miyagikyou.html

  • Conpanbear

    Even though Suntory is the weakest of the 4 in the beer market, it’s the company I think of when we’re talking Japanese whisky, so perhaps their focus is in that field because they can’t contend with the other 3?
    I was under the impression that American beer is sparkling water. The few macro-brews I’ve had confirmed this, but perhaps it is a different story with Micro-brewery products? I dunno, in Australia, we have a bit of an affinity for beer… booze in general…

  • http://www.vietamins.com Viet

    You are correct about Suntory. Their main focus is elsewhere, but their presence in the beer market is large enough for them to be mentioned.

    Most of our macro brew products are piss water, not going to lie. Different ball game with the micro brews though. Some would say they rival the European beers :)

  • Gigatron

    I used to really enjoy beer, or at least (for the sake of trendiness), I tried to convince myself I did. I found that a lot of the stuff my more “connoisseur” mates recommended was just really not to my taste.

    Now I’m older, more jaded, and I dislike all alcoholic beverages in general. Except I still have a soft spot for Japanese beer. It’s refreshing and easy on my taste buds.

    It’s the only beer (or alcohol in general) I’ll let anywhere near me now, and even then I drink it rarely.

  • http://twitter.com/arleas_ Lee Rolfing

    I don’t drink much, but when I do, it tends to be pretty damn thick stuff (Guinness extra stout).  I don’t know how I’d feel about a watery beer.  Actually, if it’s anything like Zima in the US then it’s probably either relegated to “girly drink” status, or maybe a beer you can actually mix into drinks.  I remember someone trying to get us to try zima mixed with some kind of flavored drink mix to make a pseudo wine cooler.

    Anyway, I’d be interested in trying one (in the name of Science) but like I said, I don’t drink much anymore and prefer the thicker stuff when I do.

  • http://www.facebook.com/profile.php?id=1092450533 Bianca Sanchez

    Great article! Next time, could you do one on Chu-hai? Please. :)

  • naglfar

    Is 酷 really the kanji to use here? Shouldn’t it rather be 濃くinstead?

  • http://www.vietamins.com Viet

    You are correct. The latter is the more correct adverb to use. Updated!

  • Jesse

    Just “XX” and “Heineken” for me. I’m not one of those frou frou drinkers. Eventually where heading in the same destination.

  • TripMasterMunky

    Yes! I experienced Chu-Hi when I went to Japan last year, and it’s amazing. Super Dry is okay, but I love the fruity stuff. Chu-Hi comes in so many different flavors and varieties – it’s awesome.

  • Guest

    You think that’s gross? I live in Kentucky, and every year around the Kentucky Derby (which is tommorrow) one of our local breweries releases a novelty beer called “Horse Pi$$”. To be served at room temperature or warmer. I’m not kidding.

    I’ve heard that it’s quite popular, but I’ve never seen it sold anywhere or drunk. But then again, I’m under 21 so I don’t know what people are drinking.

  • http://www.vietamins.com Viet

    I don’t think its gross, I KNOW its gross :)

  • http://www.tofugu.com/ Hashi

    Zima mixed with anything sounds horrendous.

  • Crowbark

    I’m putting in a good word for American micro-brews. I live in Arizona, where you might not expect much from the local product, but if you have the chance to try beer from Four Peaks, Beaver Street (also brewing as Lumberyard), Sleepy Dog, or Papago Breweries you’re in for a nice surprise. I lean toward the stouts and porters, but there are excellent Belgians and IPAs from all four in season too.

    That said, one of my favorite hot-weather beers is Sapporo Premium. I think goes very well with either light or spicy food, and we’ve got hot weather and spicy food in abundance down here.

  • http://twitter.com/RyuLindsay Ryushi Lindsay

    For relaxing times, make it Suntory time.

  • http://twitter.com/CrocStock Croc Stock

    Reminds me of some College Business Studies case study, but in a very good way :D

    Really interesting post, thanks!

  • http://www.tofugu.com koichi

    It is indeed very gross D:

  • http://www.tofugu.com koichi

    Pro Tip: Don’t buy anything named Horse Pi$$

  • http://www.tofugu.com koichi

    Especially because those dollar signs make me think it costs a lot of money.

  • http://www.tofugu.com koichi

    Yeha – <3 <3 <3 American Microbrews. Go Portland, tho!

  • http://www.tofugu.com koichi

    As long as it involves copious amounts of… uh… testing.

  • http://www.vietamins.com Viet

    For science, of course!

  • http://twitter.com/onorland Oskar Norlander

  • Roentgen Del Mundo

    I want!!!!!!

  • grotesk_faery

    I always see a lot of stuff about Japanese beers and of course sake and shochu, but what about other stuff? I’d be curious to know about some of the foreign drinks, especially liquors, because that’s mostly what I drink because I don’t like beer or wine (I know, I know, shameful display). I’d be curious to know what/how much of things like vodka, rum, whiskey, brandy, etc. that the Japanese drink. Can anyone offer any insight into this?

  • hatumai

    +1 on the American Microbrews.  Go Salt Lake City tho!

  • http://www.vietamins.com Viet

    I had the Hitachino Nest Sweet Stout the other day. It was pretty good, I have to admit.

  • RIchard

    Japanese beer is great with food. Served in glasses not much bigger than shot glasses. It should be judged as a compliment to salty and spicy foods not as the type of beer you drink in pints in a pub. I Personally love Super Dry . It has an mild yet addictive taste to it. Very quaffable and morish!

  • sc’Que?

    Guiness Extra is not particularly thick. Try a Harviestoun “Old Engine Oil”. Or Hair of the Dog’s “Adam”.