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Japanese liquor businesses turn to non-alcoholic beverages to attract Generation Z According to Reuters

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© Reuters. Customers drink non-alcoholic cocktails during a photo opportunity at Sumadori Bar in Tokyo, Japan on September 2, 2022. REUTERS / Kim Kyung-Hoon

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By Irene Wang and Tom Bateman

TOKYO (Reuters) – Against a longstanding stereotype of college students having a hard time drinking, Manaka Okamoto considers the next day’s schedule before opening an alcoholic drink.

“If I have to get up early and I think ‘Oh, I should stop drinking’, then I’ll go for a non-alcoholic drink to get the alcoholic sensation of drinking alone,” Okamoto, 22, said at one home. shop in Tokyo. “And of course, when hanging out with friends who don’t drink, it’s nice to have something to raise a glass.”

The popularity of low- and non-alcoholic beverages has increased worldwide, accelerated by the pandemic, making more people health-conscious. According to researcher IWSR, the global market value of this segment has grown to just under $10 billion in 2021 from $7.8 billion in 2018.

This effect is particularly pronounced in Japan, where the population is shrinking and young people drink much less than in previous decades. According to a government survey, only 7.8% of Japanese in their 20s drank alcohol regularly in 2019 compared with 20.3% in that age group in 1999.

In the face of a steady decline in alcohol sales, in July, Japan’s tax agency launched a contest to find ideas on how to stimulate demand among young people.

Major Japanese beverage manufacturers are also looking outside the country for growth. The head of domestic beer group Asahi Group Holdings told Reuters last month that he sees North America as a key market. Suntory Holdings Group is looking to expand its canned cocktail business there.

Back home, companies are coming up with new ways to improve the bar experience for non-drinkers.

On a recent afternoon at the Roppongi entertainment district, groups of mostly young women gathered at an alcohol-free “beer garden” set up in the shadow of one of Tokyo’s tallest buildings.

Beer gardens are a summer tradition in Japan, but this tradition – promoted by Suntory and TV broadcaster TV Asahi – omits beer, instead offering customers a wide range of mocktails and liquors no alcohol.

“Consumers don’t just enjoy alcoholic beverages. We think they value more than the communication made when drinking or want to enjoy the atmosphere of the place they drink,” said Suntory General Manager Masako Koura. know.

Competitor Kirin Holdings Co also offers non-alcoholic wines, cocktails and beer. The company said its non-alcoholic beer sales more than doubled in the three months to June from a year ago.

Sapporo Holdings Ltd said domestic sales of low- and non-alcoholic beer grew 20% in the half year to June, while sales of canned beer fell 4%.

In Shibuya, the newly opened Sumadori Bar – a Japanese pun for “smart drinking” – offers elaborate, sugary cocktails that can be made without alcohol or up to 3%. Mizuho Kajiura, chief executive officer of the Asahi-led venture, said it offers an environment where people can enjoy drinks together.

Kajiura has worked for two years in Indonesia and says his experience in the predominantly Muslim country has helped him appreciate creating a welcoming environment for non-drinkers.

“The purpose of this bar is to value non-drinking customers so that they can happily come here with drinkers,” said Kajiura. “If other restaurants and bars can understand our goal, I think they will get more customers.”

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