Japan Beer Market Assessment, By Product, By Concentration, By Quality, By Alcohol Volume, By Pasteurization, By Packaging Type, By Production, By End-user, By Distribution Channel, By Region, Opportunities and Forecast, FY2018-FY2032F

Japan beer market is projected to witness a CAGR of 2.5% during the forecast period FY2025-FY2032, growing from USD 28.63 billion in FY2024 to USD 34.91 billion in FY2032. The factors which drive the growth of the market includes a growing number of craft breweries, consumers' preference for specific beer styles, such as stouts, IPAs, or lagers, increasing consumption in social drinking occasions such as parties, events, and marriages, along with the boost in beer tourism, including brewery tours and beer festivals and innovation in the brewing techniques enhancing the taste of the beer.

As per the estimations of Kirin Holdings Company, Limited, Japan is one of the largest consumers of beer globally, with a total consumption of 4,294 million liters in 2022. The region is showing a year-on-year growth rate of 2.5%. This is attracting various foreign companies to establish themselves in Japan and increase their revenue streams.

Acquisitions and collaborations have been key factors in facilitating the growth of the beer market. Key players have been acquiring craft breweries due to their distinct brewing techniques and rich flavor. The craft beer industry has been evolving rapidly, significantly driving the growth of the Japan beer market. Moreover, acquisitions promote economies of scale and efficiency in operations, resulting in the minimization of production and distribution costs.

The hospitality industry is fostering the growth of Japan's beer market. Pubs and bars enable consumers to try out a wider range of beers, contributing to the expansion of the beer market. Social events such as parties, food drives, beer festivals, and concerts further support the market growth.

Furthermore, the retail distribution channel is fostering Japan's beer market growth due to the ease of product availability for consumers and better brand visibility. For instance, in August 2023, AnyMind Group, a commerce enablement company, partnered with UUUM, a Japan-based multi-channel network, to announce the launch of their direct-to-consumer craft beer brand, Sakasuki, on the official Sakasuki online store.

Global Collaborations to Support the Market Growth

Acquisitions are majorly driving the beer market growth in numerous aspects. Acquisitions enable giant and large beer manufacturers to expand themselves in the newer marketplaces and extend their distribution channels, enabling them to reach more consumers and increase their market share. Acquisitions help the key players gain popularity in international beer markets and expand their options from the local region to a relatively larger marketplace.

The major players in the Japanese beer market are acquiring and collaborating with other players in the beer market to expand their operations overseas and represent Japanese beer on a global stage. For instance, in February 2024, Kirin Holdings Company, Limited invested USD 25 million in India's B9 Beverages Limited, owner of the craft beer brand Bira 91. In August 2022, Sapporo Breweries Limited closed an acquisition of Stone Brewing for USD 165 million. With this acquisition, the oldest Japanese beer brand will carry its operation in the United States markets, namely, Escondido, Richmond, California, and Virginia. In January 2024, Asahi Group Holdings, Limited announced the acquisition of Octopi Brewing. With the help of the acquisition, Asahi Super Dry, which is Japan's most famous beer will now be brewed in the United States for the very first time.

Craft-Beer Driving the Market Growth

Craft breweries are preferred by the consumers because of their unique techniques of brewing, artisanal taste, and rich flavors. Japanese consumers are increasingly valuing quality, authenticity, and craftsmanship which is associated with the craft beer. Moreover, consumers' growing interest in exploring flavors and unique taste profiles which are often offered by the craft breweries due to their innovative recipes and brewing techniques is driving the market growth. Thus, the increasing preference by Japanese consumers for craft beers is offering an opportunity in the market.

Various players from different regions are expanding their operation and establishing themselves in Japan, witnessing the growth opportunities of beer in the region. Foreign craft brewers recognize the potential for partnership with local restaurants, bars, and retailers, enabling them to promote their brand in the region.

In January 2024, Great Dane Pub and Brewing Company, a U.S. based craft brewer announced the establishment of a brewhouse in Sendai, Japan. The latest brewhouse launched with two locally brewed beers, namely, Amber Ale and Great Lager. Great Dane Brewing Japan is the first foreign-owned brewer in Japan with a bricks-and-mortar brewery.

Standard Beer Dominates Japan Beer Market Share

Standard beer dominates the Japanese beer market over the premium beer market due to the Japanese government's high liquor taxation. Due to the rise in prices, consumers gradually started shifting to other types of liquors or towards cheaper-quality beer. Moreover, the heavy taxation on beer by the Japanese government has prompted the production of lower-tax alternatives such as Happoshu or other low-malt beers.

The lower quality substitutes have been dominating Japan beer market since past three decades. Additionally, consumers might find beer less affordable due to the high tax rate, which is hindering the market growth, as a solution to which manufacturers are introducing standard and low malt beer for the consumers. For instance, in April 2024, Kirin Holdings Company, Limited introduced Harekaze, a standard priced beer. The latest beer offered by the company provides consumers with a unique drinking experience without the accompanying sourness which is typically associated with such beverages.

Future Market Scenario (FY2025 - FY2032F)

In the latest market trend, the Japanese government has planned to introduce liquor tax reforms, which will reduce the taxes levied on beer. The latest national liquor tax law applied by the Japanese government in 2017 impacted the liquor tax rates for beer in Japan in three stages over a decade, starting from 2017 until 2026.

The tax lowering has been implemented to improve the quality of Japan's brews. The Japan liquor tax is divided into three different categories, but it will be unified into a single category in 2026. As a result, the liquor tax on malt-based beer (not less than 25% malt) will be lowered, and the rate for beer-flavored liquors (25% malt) will be increased.

Key Players Landscape and Outlook

Key players are helping in the growth of the market by focusing on continuous product innovation, retail expansions, and strategic marketing. The manufacturers are actively expanding their product portfolio, increasing the base of the customers, and catering to their evolving needs.

The key players are expanding their productive capacities by establishing new production units and plants. For instance, in November 2023, Asahi Group Japan, Ltd. announced that it will soon launch its latest brewery in Tosu, Saga Prefecture, Japan. The establishment is scheduled to be inaugurated in 2029. Through this expansion, the company intends to produce a variety of beverages, including beer and soft drinks. Moreover, the Tosu plant is expected to handle a substantial portion of shipments for Kyushu, the southwestern region of Japan's main island.