Japan: Kirin’s no-malt beer Hon-Kirin rocks the market

So called third-category beers outsell the whole beer market in Japan. While combined shipments of ordinary beer and low-malt beer (happōshu) declined last year for the 14th straight year in a row, no-malt beers, which are made from soy or pea protein instead of malt and which are also referred to as third-category beers, increased by 3.7 percent last year, the first increase in five years.

Main driver of the growth was Hon-Kirin, which was released last March by Kirin, Japan’s second largest brewing company. After only three months the company revised its sales forecast for the period to 350,000 hectoliters which was increased another time in the 10 months-period until the end of the year to more than 1.2 million hl.

Hon-Kirin mimics the taste and feel of beer but is sold at a significantly lower price due to a lower tax-rate. The alcohol laws in Japan dictate that beer be taxed according to its malt content, thus making happōshu and even more third-category beers a cost-saving alternative for consumers. A 350-milliliter can of Hon-Kirin is about 80 Yens (USD 0.73) cheaper than a normal beer of the same size.

Kirin claims that the uniqueness of the product comes from German Hersbruck hops, which is “characterized by fresh smell and high-quality bitterness”, and the long-term low temperature aging, which takes 1.5 times the time of the company's major new genre products and which reduces miscellaneous off-tastes and gives a richer taste. “By setting the alcohol content to a slightly higher level of 6%, you can also enjoy a strong drinking response,” the company says.

Owing to its success, Hon-Kirin has been the inspiration for similar products. In January this year, Asahi Breweries launched Gokujo Kireaji, and Suntory Beer introduced Kinmugi Gold Lager, as part of its revamped Kinmugi brand line. Both products were also an immediate success.

However, the recent success of third-category beers could be a flash in the pan because the Japanese government announced last years plans to flatten the tax rate of all three beer categories. The idea is to lower the tax on ordinary beer and to increase tax on low-malt happōshu and third-sector no-malt beverages starting in 2020 with the aim to have the same taxation on all products by 2026. (inside.beer, 2.4.2018)

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