Japan: Suntory Boosts Whisky Production and Facilities

Celebrating its 100th anniversary in the whisky industry this year, Suntory is proactively boosting production to meet the escalating popularity of its products. As part of these efforts, Suntory Spirits has initiated a two-year renovation project at its Yamazaki distillery in Osaka Prefecture and Hakushu distillery in Yamanashi Prefecture.

President Nobuhiro Torii, the great-grandson of Suntory founder Shinjiro Torii, shared in an interview that the company is investing approximately JPY 10 billion (USD 66 million) in these expansions, with a specific focus on enhancing capacity to meet the surging global demand for Japanese premium whisky. Over the past decade, Suntory has dedicated over JPY 60 billion (USD 395 million) to bolster production capacity, including the expansion of storage facilities.

Given the time required for whisky maturation, Torii acknowledged that the company might only be able to "ship out a little more" around 2027. He also highlighted the improving quality of Suntory's overseas distilleries, particularly since the acquisition of U.S. spirits maker Beam in 2014. Torii expressed optimism that Beam Suntory's U.S.-made whisky would gain even greater international recognition in the next decade. Recently, blenders from Suntory gathered at the Yamazaki distillery for an exchange of opinions.

The renowned Yamazaki 55 Years Old single malt whisky, achieving prices of up to USD 780,000 at auctions, epitomizes the global appeal of Japanese whisky. Sotheby's has declared it the most expensive Japanese whisky, solidifying Japanese whisky's standing as the second most valuable category on the secondary market.

In an effort to uphold the quality of Japanese whisky on the global stage, leading distillers in the country, such as Suntory, Nikka Whisky, and Kirin Holdings, have collaboratively established voluntary standards through the Japan Spirits & Liqueurs Makers Association. Beginning in April, these standards will be rigorously implemented, mandating that Japanese whisky must be crafted with malt and employ water sourced from Japan. Additionally, whisky products produced from rice by craft brewers will no longer be recognized as Japanese whisky.

Suntory's expansion aligns with the surge in craft whisky distilleries in Japan. The number of licensed distilleries specializing in whisky production has increased over fivefold by 2021 compared to a decade earlier, according to data from the National Tax Agency.

Addressing expansion plans in China, Suntory’s CEO Takeshi Niinami told Nikkei Asia that he aims for growth in China, acknowledging geopolitical risks as "anxious but thrilling." Niinami added that China's growth, currently estimated at "a rate of 4% - it may be 3.5%, depending on the circumstances," presents a massive market opportunity and Suntory is determined to capture it, despite potential challenges. “We would want to capture this market at whatever cost," Niinami said.

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