import division manager Vinos Yamazaki, Japan
At first glance, Japan is an extremely attractive place to do business. The market is still in growth; in terms of consumption, it has grown consistently at around five percent per year since 2009. Moreover, over the past five years I’ve noticed a marked increase in the consumption of wine by younger age groups, while the average spend per customer is rising. Our business continues to benefit from rising turnover across our network of stores. In Japan, both the retail and online channels grow ever more important, as larger swathes of the population drink wine at home, as opposed to the traditional pattern of on-premise consumption dominating sales.
However, it should be noted that while the large cities such as Tokyo and Osaka are showing encouraging growth, suburban areas are stagnating and present a difficult market for imported brands. Indeed, the Japanese market is highly competitive with its multitude of brands. Product quality is paramount, as is packaging. For brands at lower price tiers, currency fluctuations can be a threat, as well as lack of access to free trade agreements. The business relationship with the importer is another key factor in the ultimate success of a label.
In addition, premium brands should be aware that because the price per unit is decreasing in general, it’s difficult to sell wine at higher price points without a strong background history or story. Yet overall premium brands, with the proper investment of time and resources, can do very well here. Japan has a strong distribution network, particularly in the wholesale market, and our company is trying to develop this network while concurrently growing our retail sales. This is a country where wine is marketed in a sophisticated way. Product information is widely available, educational seminars are well attended and there is a connection to the personalities behind each wine. It’s a mature market with a strong appreciation for wine sold at all price tiers.
CEO Groszer Wein, Austria
Our winery initially entered the Japanese market in 2013 — the market for Austrian wine overall is sadly flat and not growing at the rate I expected, although Groszer Wein is doing quite well. There have been significant changes in the market over the past five years, particularly in terms of rising interest in organic and natural wines, while wealthier Japanese consumers maintain their interest in classical wine regions. In terms of sales channels, the on-trade is really the only place a niche category such as Austrian wine can hope to get a foothold. The distribution of wine here is fragmented and fractured and, like all of Japan, very regional. That being said, regions with little historic exposure to imported wines are growing in importance, while demand is slowing in traditional regions such as Kansai. It is no longer the case that the large urban areas — such as Tokyo — are the only places to do business as an imported brand.
Interestingly, Japan is widely considered to be Asia’s most mature market, but wine drinking has not become as mainstream as people might believe. Most Japanese consumers are still not classical wine drinkers; by and large, the occasions to drink wine are not that commonplace. Yet it is still an attractive market in many ways; Japanese sommeliers are among the best in the world. Sophisticated Japanese customers give a lot and I have learned a great deal about our wines in Japan. Overall, it’s a good market for lesser-known wine regions and niche producers; however, the occasions that merit consumption arise less frequently than in the USA and Europe.
sales and marketing director Ornellaia, Italy
Ornellaia has been present in the Japanese market for more than 20 years. In fact, it was one of the first international markets that we targeted. Today it is a strong market for fine wine and an important “shop window” for luxury wine in Asia. Of course, the market for premium labels remains a niche market in Japan, but it is growing in line with the economy and the demand for luxury goods. In our experience, the market is still dominated by the on-trade but, like all other markets, we are seeing an increase in retail and private sales.
Doing business in Japan requires a fine-tuned, sophisticated approach to wine marketing. The Japanese have strong sense of aesthetics and style and elegance. There is definitely a more traditional approach compared with other Asian markets. Brands hoping to succeed here must understand and respect the complexities of Japanese culture. Consumer and trade customers are very loyal and so it is important to gain their trust.
In addition, the on-trade is usually served via specialised wholesalers that can be large and powerful. It is important to have personal relationships with them and with sommeliers or beverage managers and OPLs in order to influence them and secure a position or focus in the on-trade. As you might expect, most business is done in the Tokyo and Osaka areas. It’s an exciting market, and one where I honestly don’t see any risks, only opportunities. It is also a very mature market; perhaps the only risk would arise if an importer expected things to change quickly and did not manage expectations properly. This is a world away from China — expect a traditional market that is less open to change but at the same time more consistent, true to its values and extremely loyal.
managing director, Schloss Gobelsburg, Austria
Schloss Gobelsburg was first present in the Japanese market in 1992 — we left in 1999, returning to forge a new distribution network in 2004. I would say the overall market for Austrian wines is in growth, albeit on a small scale. As an Austrian winery, we do not expect much, but sales are growing, led by the on-trade in Tokyo, Osaka and the surrounding areas. However, this is a complicated market — Japan as a wine market is slowly developing and, in common with other nations where wine consumption is not traditional, it has been starting with headline countries such as France and globally recognised brands.
Yet consumers are becoming more and more sophisticated and looking to discover new regions and new wines. Concurrently, Japan is quite a trend-driven market and Japanese consumers are quick to embrace the new and exciting. Women are, in many cases, the decision makers when it comes to wine and wine consumption. In addition, Sake is becoming more and more internationally recognised, which has an knock-on effect on the self-sight of Japanese consumers in relation to wine consumption.
The key to cracking this market is doing your research, particularly when it comes to business culture and communication. I think it is important to “get into” Japanese culture and to accept how they do things. You must make regular visits to Japan and invest considerable time in this market. Brands that can show origin, history, tradition, pedigree and tout their sustainable credentials should do well. Of course, no market offers an easy ride; as elsewhere competition for on-trade listings is intense. However, Japan boasts a strong distribution network and, in comparison with China, the commitment of Japanese professionals is strong and long-lasting, which is important to know. This isn’t a fickle market, at least on the trade side. It’s the real beauty of doing business here — Japanese patience is legendary, a commodity seriously lacking in China.