Japan: Suntory beer sales dropped 8% in 2005, brewer turns to low-alcohol fruit cocktails

Suntory Ltd. said August 22 it will debut premium canned cocktails using fresh fruit on Sept. 26, hoping to lure people who want high-end, sweet alcoholic beverages, The Japan Times released August 23.

In collaboration with Ginza Sembikiya Co., a long-established fruit importer and chain of cafes specializing in fruits and sweets, Suntory will introduce low-alcohol premium melon-based and mango-based cocktails.

The company said a 280-ml Ginza Cocktail of either flavor will cost 209 yen to differentiate the new product from cheaper drinks.

As beer sales slip with people turning to cheaper beerlike beverages and other alcoholic drinks, brewers have been battling to sell low-alcohol canned beverages whose prices range from 140 yen to 150 yen. Their alcohol content usually ranges between 5 percent and 7 percent.

The segment includes canned and bottled cocktails, such as canned "chuhai," drinks that blend "shochu" spirits with fruit juice and carbonated water.

"We are seeing an increasing number of people drinking fresh fruit cocktails priced above 1,500 yen in bars," said Tetsu Mizutani, manager at Suntory's low-alcohol drinks division. "But there aren't such high-end canned low-alcohol drinks available" at retail stores.

Canned chuhai and other such cocktails have been popular especially with young people and women who favor a sweet taste instead of the bitterness of beer.

Kirin Brewery Co.'s Hyoketsu canned chuhai, launched in 2001, sparked the trend for low-alcohol drinks. Suntory followed with its own canned chuhai in 2003, adding more in 2005.

Shipments of canned cocktails, including chuhai showed double-digit year-on-year growth in 2003 and 2004, but the rate stood about 5 percent in 2005, according to Suntory. The company hopes to stimulate the market with the new high-end cocktails.

Beer shipments have continued to shrink, dropping 8 percent year-on-year in 2005.

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