Craft Gin In Japan Is Taking Off
Is it almost gin o'clock in Japan?
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Is Japan Thirsty for a Craft Gin Craze?
Assuming no one forgets about gin o’clock, the global gin market is poised to grow to almost $20 billion by 2026. Craft is really driving the gin boom globally, according to these data points:
Craft Gin is expected to register 23% CAGR in the US market until 2025
Between 2020 and 2022, over 100 new gin distilleries sprung up in the UK, bringing the total number to 820.
Australian gin specialist Four Pillars declares “APAC craft gin boom” in 2021after sales in the region rose 121% in 2020, despite the pandemic
Global consumer demand for craft gin is attracting investment from big players. Alcohol giant Diageo has built up quite a tab recently, investing $610 million to buy British distillery Chase Gin in 2020, and the same amount to acquire Ryan Reynold’s craft gin company, Aviation Gin in 2021. The world’s second-largest wine and spirit seller, Pernod Ricard, made a significant investment in Japan’s Kyoto Distillery which makes premium gin Ki No Bi. Even whisky makers are turning to gin in droves to capitalize on the trend while their main product lines mature.
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With the world’s thirst for gin showing no sign of sloeing down, could it be the tonic that invigorates the craft spirit market in Japan?
Craft Gin Market in Japan
“Japanese gin” has acquired the prestige of scotch whisky outside of Japan, where consumers can’t get enough of it. In 2021, Japanese gin exports reached a value of over USD$21 million. This has skyrocketed from the 2011 lows of USD $10,00. Forecasts predict even more extraordinary growth in the future.
Japanese consumers don’t seem to have the same Don Draper-esq thirst for their local product compared to overseas drinkers, however. Only 10% of Suntory’s popular Roku gin was sold in the domestic market in 2020.
This situation is getting shaken and stirred. In 2021, sales of domestic Gin surpassed imported gin in Japan for the first time, a sign of increased local interest in the spirit. Japan’s liquor giants are picking up on the trend and planning to increase their focus on domestic drinkers. Earlier this year, Suntory Gin launched an RTD version of their Sui gin soda, showing their intent to drive the gin trend in Japan by offering a tonic to highball fatigue.
They face stiff competition from the craft distilleries. 22 (and counting) having been established since 2014. A clear trend is the number of sake and shochu distilleries launching their own gins, utilizing their craft distillation expertise to capitalize on the booming gin market. Interestingly, this also means a lot of Japanese craft gins take shochu or sake as a base, making for nuanced, rich flavours. For this reason, Japan’s artisanal products are starting to appeal to domestic drinkers as well as those overseas. Let’s meet the brands and their makers.
Introducing the players you need to know
The Kyoto Distillery - Ki No Bi
The Kyoto Distillery makes Japan’s No. 1 craft gin, Ki No Bi which translates to The Beauty of the Seasons. They are owned by Number One Drinks, the worldwide distributor of fine Japanese whiskeys. Ki No Bi has won awards from IWSC, the World Gin Awards and Tokyo Whisky and Spirits competition for their gins.Chugoku Shuzo - Sakurao Gin
Chugoku Shuzo is a sake brewery founded in 1918. They opened their Sakurao gin distillery in 2018. Their gin combines 14 local Japanese botanicals including Hiroshima lemon and matcha. It has picked up awards at major events including the World Gin Awards.
Komasa Shuzo - Komasa Gin
Continuing the trend of the gin-trification of traditional alcohol makers, shochu distiller Komasa Shuzo founded a gin distillery in 2018. Their gin uses rare Japanese citrus botanicals to make an easy to drink, refreshing tipple.
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Masahiro Shuzo - Masahiro Okinawa Gin
Masahiro Shuzo is an Okinawa based awamori maker established in 1883. In 2017 they released Masahiro Okinawa Gin which uses two blends of awamori, a traditional Okinawan rice spirit, as a base, macerated with juniper and 5 botanicals from Okinawa. This multi-award winning gem of a gin picked up bronze at the 2020 World Gin Awards.
Honbo Shuzo - Wa Bi Gin
Honbo Shuzo is a historic shochu distillery that has expanded operations into whisky and wine. In 2017 they venture into craft with their Wa Bi Gin (Japanese beauty gin). The juniper based gin uses 9 botanicals and in 2019 they won a gold medal at the San Francisco World Spirits Competition for a rose flavoured version.
The amount of gin imported to Japan has been declining since 2017 when it peaked at 3.5 million litres. The most-imported gins come as no surprise. Beefeater, Wilkinson, Bombay Sapphire, and Tanqueray dominate, but import numbers declined from 2020 to 2021. Even imports of craft gins like Hendricks and Monkey 47 are flat.
There are a few hints of an appetite for overseas brands. French brand G-Vine, No. 3 London Dry, and The Botanist saw an increase in the number of bottles imported between 2020 to 2021. The challenge of competing with quality domestic gins remains to be taken on, however.
What trends will shape the market?
Japan has some top-class craft gins, which locals are slowly developing a taste for. So what are the opportunities to capitalize as the craft gin wave begins to form in Japan?
Strategic partnerships: Following Pernod Ricard’s investment in Ki No Bi in 2020, other global players may seek to invest in Japan’s craft distilleries to profit from growing brands outside Japan where overseas drinkers continue to crave Japanese craft.
Sparking a G&S boom: Whisky high-balls boomed in 2020, but the hysteria is starting to wane. A likely successor is Gin and Soda which is being positioned to take off by Suntory who recently released an RTD Gin soda, using their Sui gin as a base.
Shochu and Sake Masters turn to Gin: taking advantage of their craft know-how, sake and shochu distilleries will increasingly produce high-quality craft gins to capitalize on global demand.
Grassroots Ginovation: While alcohol giants like Suntory are making a market for gin in Japan, local distillers are making waves too. The sake and shochu distilleries making craft gin are all regionally dispersed across Japan. There are also innovative local distilleries popping up in the capital. The Hachioji Distillery opened earlier this year in Tokyo. Before that, Shushokudo Toranomon Distillery opened inside Toranomon Business Tower in 2020. Expect Japan’s craft gin market to maintain this kind of unique local flavour over the coming years.
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