Following the news that Japan’s National Tax Agency has launched a “Sake Viva!” contest to stimulate the consumption of alcoholic drinks among young consumers:

Biswarup Bose, Consumer Analyst at GlobalData, a leading data and analytics company, offers his view:

“Over the last decade, alcoholic beverage sales in Japan have been waning owing to the rapidly greying and shrinking population, and the declining alcohol intake among young consumers due to health or lifestyle factors. Consequently, Japan’s total alcoholic beverages sales fell from $112.4 billion in 2011 to $95.6 billion by 2021^*. The trend is visible across all alcoholic beverage categories, such as sake and beer^*. Sake sales declined from $17.9 billion in 2011 to $12.2 billion by 2021, and beer sales from $36.9 billion in 2011 to $30.8 billion by 2021^*.

“The COVID-19 pandemic accelerated the decline of alcoholic beverages sales, with the intermittent closure of restaurants, bars, and clubs. Moreover, as work-from-home has become the new normal, the social drinking occasions with office colleagues, and “all you can drink” parties at foodservice venues have become few and far between. Consequently, 19% of the Japanese respondents of age 25-34 years stated that they used to drink alcohol but have stopped now in GlobalData’s consumer survey. Comparatively, only 13% of respondents of age 55-64 years, said the same^**.

“The alcohol moderation/avoidance trend is propelling a consumer shift from hard liquor to low-alcohol beers and hard seltzers, with 42% of survey respondents finding such alcoholic drinks with low/no alcohol somewhat/very appealing. Moreover, there is a shift in the consumption pattern, with drinkers preferring value for money liquor including chuhai, sparkling liquor, and beer alternatives, over beer. Going forward, the consumption will be further hit by the inflation spiral and economic slowdown catalyzed by COVID-19 and the Russia-Ukraine conflict.

“The National Tax Agency’s Sake Viva! contest contradicts the Japanese health ministry’s mission to prevent alcoholism, thereby sending out confusing signals to consumers. Unsurprisingly, the contest has already drawn public ire as it compromises on the public health to replenish government coffers. The agency can perhaps align its goals with the health ministry’s interests, by spurring premiumization by means of encouraging consumers to drink better, not more.”

* GlobalData Consumer Intelligence Center–Market Analyzers, accessed in August 2022

** GlobalData Q2 2022 Consumer Survey–Japan with 544 respondents, published in June 2022