Can Asahi Brew Up Another Blockbuster?Karen Lowry Miller
Yasuo Matsui loves his job as managing director of marketing for Tokyo's Asahi Breweries Ltd. In 1987, the Super Dry beer he helped concoct reversed a 40-year slide in Asahi's Japanese market share, catapulting it from 9.6% to almost 25% today. Inspired by Japanese exports, U. S.-made dry beer went on to become a smash hit among Americans.
Now, after years of taste-testing, Matsui is betting big that he can uncap another winner. This time, it's Z, pronounced zed in Japan. It's a new draft brew that Matsui boldly claims is the ultimate in taste and aroma--a superbeer. If Z scores at home, Asahi may also begin selling it in the U. S. to strengthen its American foothold and accelerate its global expansion.
Oddly enough, Asahi is a victim of its own success in Japan and now desperately needs another powerful entry to increase sales in Japan and abroad. Japan's No. 2 brewer emerged from the frothy dry-beer wars as undisputed champion in that market segment--but dangerously dependent on it as well. Super Dry accounts for a hearty 95% of Asahi's beer sales. But Japanese demand for dry beers is going stale even as Asahi has spent more than $2 billion since 1987 to triple production capacity. Analysts say the resulting depreciation and interest costs held 1990 net profits flat at $44 million on sales of $5.4 billion and may keep them down in 1991.
STATESIDE BREWING. A global marketing strategy could help re-ignite profit growth. Last fall, Asahi purchased just under 20% of Australia's troubled Elders IXL Ltd.--a stake that archrival Kirin Brewery Co. had earlier rejected. But of Japan's four major brewers, only Asahi plans to build a brewery in the U. S., probably on the West Coast. Initially, it will turn out Super Dry, since Asahi already exports 400,000 cases of it to the U. S. annually. Asahi may also brew Z stateside if the new beer catches on. Two of the three other Japanese majors have agreements allowing Canadian brewers to produce the Japanese beers under license and export them to the U. S.
The odds of Asahi coming up with another hit are long. "It's a big gamble for them, but they've got their backs against the wall," says Eleanor Marsh, beverage analyst for S. G. Warburg Securities (Japan) Inc. At a time when most new Japanese brands were lucky to sell a million cases in their first year, Super Dry sold 13.5 million. But since then, Japanese beer guzzlers have turned up their noses at dozens of other new brands, including Asahi's only new entry in three years, Super Yeast. Thinking big, Asahi President Hirotaro Higuchi aims to sell 30 million cases of Z in its first year--equal to a 5% market share.
Matsui and his 15-person development team took more than four years to develop Z. They tried more than 900 varieties of yeast and studied the aromas of 50 beer brands. The new beer is brewed and fermented at higher-than-usual temperatures, using an unusual yeast that floats rather than sinks. Matsui says the result is a full-bodied beer with no aftertaste or grainy aroma. Z has the normal 4.5% alcohol content but, he says, is less sweet and less filling.
'SHEER AGGRESSIVENESS.' In the end, Z will rise or fall on its marketing. To launch Z in late February, the company is kicking off a nationwide television, radio, newspaper, and magazine blitz. The $31 million budget for the campaign is twice what was spent launching Super Dry. "We've learned we can win by sheer aggressiveness," says Akira Ohara, Asahi's advertising manager. Asahi research indicates that to sell beer in the `90s, it should target success-oriented males from 25 to 35. To capture that image, Asahi picked Australian golf star Greg Norman as Z's spokesman.
Japanese beer consumers now expect fresh concepts and gimmicky names. Industry leader Kirin as well as Suntory Ltd. and Sapporo Breweries Ltd., Japan's other big brewers, are also launching new beers this month. But, playing it safe, they're still using Japanese names for their suds. Kirin's brew is called Ichiban Shibori Premium. It's a fancier version of an existing brand. Asahi boldly went for the Western Z sound, hoping consumers would think of Z as the ultimate. But competitors wonder if it will work. "Z means last, doesn't it?" asks Nobutada Saji, a Suntory executive vice-president.
Asahi's biggest worry is Kirin, whose goal is to drive its market share back up over 50% with the help of Ichiban Shibori, which it introduced a year ago. Ichiban Shibori was a huge success in its first year, with sales topping 35 million cases. To counter such threats, Asahi is counting on Z. "Z will decide the fate of our company," says Matsui. It's the most serious drinking game he has ever played.