Current Market Development and Potential of Japanese Sake in Australia

Mar 23, 2010


Demand for sake in Japan has been on a declining trend over recent years. Consumption of sake overseas, however, has continued to rise based on an increasing popularity for Japanese food. Australia is no exception—in particular, both public and private sectors have recently been active in promoting Japanese sake.

Seeking overseas markets due to shrinking domestic demand

The recent shift away from sake in the Japanese domestic market is severe. Statistics from the Japan Sake Brewers Association show domestic consumption of refined sake fell to 664,000 kilolitres in 2007, down almost 60 per cent over a ten-year period compared to 1997; this represents around a 40 per cent levelling off from the peak of 1975 (1.675 million kilolitres). The average consumption of 6.4 litres per adult has dived dramatically from 11.5 litres per adult in 1997 further demonstrating the contraction of the Japanese domestic sake market.
In contrast to stagnating domestic demand, overseas exports are on the rise. Apart from severely diminishing exports to Taiwan that was once the largest export market, exports are booming to Korea, Hong Kong, China, East Asia and North America on the back of increasing global popularity for Japanese food.

While the volume of exports to Australia is still somewhat small in comparison to other countries, the following table shows double-digit growth for three consecutive years since 2005. Figures for 2008 show a 14.4 per cent increase on the previous year to 135 kilolitres.

Shifts in refined sake export volumes per major market

Source: Japan Sake Brewers Association
08 ranking Country/Region 2004 2005 2006 2007 2008
1 USA 2,616 2,997 3,354 3,852 3,843
2 Taiwan 2,080 2,133 1,991 1,700 1,626
3 Korea 230 399 665 1,069 1,529
4 Hong Kong 987 961 877 1,006 1,213
5 Canada 410 462 490 484 530
14 Australia 95 81 92 118 135
(Unit: kilolitre)

Exploring sales opportunities of Japanese sake in Australia

Information from the Australian Bureau of Statistics indicates alcohol consumption per capita in Australia has been on a steady increase since 2006. Both public and private sectors have increased their efforts to promote sake in Australia, as the potential for this market is extremely high.

To give an example, in July 2009 Testuya Wakuda, owner and chef of the world famous restaurant Tetsuya’s, worked together with the Consulate-General of Japan in Sydney to host a reception An Evening with Sake Samurai at the official residence of the Consul General of Japan in Sydney. Executives from eight sake breweries – members of the Japan Sake Brewers Association Junior Council – also attended the event. Local journalists were offered choice sake from these breweries and Japanese cuisine prepared by Testuya Wakuda.

With the cooperation of local Japanese companies, JETRO Sydney hosted the first Japanese food PR booth at Fine Food Australia—Australia’s largest foodservice exhibition held in Sydney in September 2009. The exhibit supported exploring new sales opportunities in Australia for Japanese-manufactured food products. There was also sake sampling as part of the PR strategies for sake.

JETRO was the only booth at the exhibition to offer sake taste testing. There was positive feedback from visitors, and there were times during the day when the booth was very crowded.

Many visitors who sampled sake said they had heard of sake but had not had an opportunity to taste it. Moreover, visitors also said that sake was more delicious than they expected, it was pleasant on the palate and they would like to try it again.

Many visitors inquired which bottle shops sold sake, resulting in a list of inner Sydney outlets stocking sake being prepared and distributed at very short notice. Sake A to Z, an English pamphlet on sake published by JAL (Japan Airlines), was also handed out during the exhibition; visitors taking this brochure home further give glimpses into the increasing interest in sake.

Sake market opportunities today

So what is the current market for sake in Australia? The following information is regarding Kontatsu Australia and AUN Trader, two participants at the JETRO booth.

Established in 2008, Kontatsu Australia currently wholesales sake to bottle shops and restaurants. Kontatsu Australia’s parent company, Kontatsu, was established in Yaesu, Tokyo in 1924, and has a near 90-year history as a wholesaler of sake.

Supported by a large selection of products and a parent company with specialised knowledge, Kontatsu Australia not only promotes high-quality products but also believes it is essential in developing the sake market in Australia to educate customers accurately on knowledge about sake and how to appreciate it.

For example, consumers are introduced to easy-to-drink or fruity, sweet sake along with various ways of enjoying sake from warmed sake to sake at room temperature or cooled sake depending on the product. Likewise, bottle shops are also advised to avoid direct sunlight or high temperatures when storing sake products because sake is delicate.

AUN Trader began distributing Hananomai sake products from Shizuoka in 2008. Currently stocked mainly at bottle shops, the product line up includes Ginjo-shu (60% semi-buai), semi-sparkling sake, and umeshu (plum wine) using premium-quality ume (plums) called nankōume. These products would be considered distinctive even in Japan.

Because these products do not use any preservatives, one can appreciate the sweetness of the carbohydrates derived from rice. AUN Trader representatives began stocking these products because they are passionate about them; as such, these products have earned a good reputation in Australia receiving favourable feedback for its lightness and quality of the palate.

AUN Trader is experienced in marketing and promotion therefore gives due consideration to naming and bottle design—for example, it has named a semi-sparkling sake Glow, which is bottled in a sleek-designed almost perfume-like bottle.

The key is a sound understanding and providing high-quality products

While we are at the beginning of developing the sake market in Australia, there are signs of steady growth.

The food culture of dining in a restaurant in Australia is to leisurely enjoy a starter and main with wine to match. One key marketing strategy is to have consumers understand and accept that, like wine, sake can also be enjoyed with a meal.

In comparison to wine and beer that is already widely distributed in Australia, sake becomes expensive because it is subject to taxes and transport costs. On the other hand, because sake is a high-quality product with intrinsic health and beauty benefits such as properties to maintain beautiful skin, lower cholesterol and contains anti-aging agents, there is considerable scope in market development to focus on high-end wealthy categories.

Even in Australia, the numbers of Japanese restaurants are increasing, and the number of ‘Aussies’ that can use chopsticks well is more than you think. It is not a fantasy that these people will become sake drinkers.

Sadaka Inasawa is the Director of Administration at the Japan External Trade Organization’s Sydney Office.

The views represented within this article are those of the writer and not necessarily the views of JETRO or the Japanese Government.