Unfortunately beer drinkers have not been
turning Japanese, at least not at the rate they were last year.
Recently, Kirin Holdings Co. reported lower-than-expected semi-annual
earnings. Compared to the same time period in 2006 Kirin Holdings,
which owns Australian Lion Nathan and Philippines San Miguel Group,
reported that sales in 2007 are down 12%. Sighting an unforseen rise
in the cost of raw materials and slower turns of their numerous brands
over the last six months.
Kirin President Kazuyasu Kato explained, “We had a much
higher-than-expected impact on our earnings from higher raw material
expenses.” The Japanese beer giant hoped efforts of its Marketing
Departments through cross-promotion and increased point of sale
merchandise would carry them through the increased raw material
spend. However, this strategy ultimately fell short of its target.
Kato mentioned that he did not foresee the cost of raw materials to
drop down to their 2006 price range. He has not ruled out the option
to raise the cost of their products, but hopes further marketing plans
will bring Kirin’s sales back toward their 2007 forecast. To make
matters worse, rival Japanese brewer Asahi took over the top spot as
Japan’s number one beer.
Although not mentioned in the release, another reason why
many large brewers and well-known brands have been struggling in 2007
is due to the growth of the craft beer industry. More and more beer
enthusiasts are buying outside of the traditional brands. Although
import brands have seen steady growth over the last few years, tried
and true brands like Kirin and others are beginning to suffer
as consumers are venturing out to newer, smaller and local beer