Japan’s Cider Market Snapshot: A Booming Niche Market

Snapshot of Japan's cider market, a booming niche offering great potential to foreign brands, with consumers growing an appetite for international ciders.

October 28, 2020
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5
min read

While Japan’s cider market is still a niche in comparison with adjacent categories such as ‘ready-to-drink’ (or ‘RTD’) and wine, cider is having a major moment with Japanese consumers developing a growing appetite for this drink with a rich tradition and heritage.

Enjoying a soaring success worldwide, the cider market is expected to grow in Asia and notably in Japan. In 2019 leading research companies estimated that Japan’s cider market represented a value of 1.2 to 3 billions Japanese yen ($11 to $29 million) with 1.7 million liters and a volume growth of 2%. An estimation that GourmetPro experts found to be significantly below the actual volume, estimated above 6 million liters with a value of 8+ millions.

In Japan, cider gained visibility next to RTDs as a healthy, easy-to-drink, low alcohol beverage

The worldwide renaissance of cider goes along with the resurgence of the RTD category, booming across widening demographics. Since cider shares characteristics with RTD’s - low-alcohol, sweet and fruity, and Japan being the world’s largest RTD market, this beverage naturally fits with Japanese consumers’ ever more health-focused lifestyles. To consumers seeking out products that seem to offer moderation, cider offers approachable flavors and stands as a good alternative to beer, traditional spirits and mixers

Cider’s success in Japan, notably with consumers in their 30s-50s, hinges on how this category's functional benefits perfectly fit their preferences: easy to drink, low alcohol, healthy (high polyphenols, almost purine-free) and photogenic. Particularly attractive for women in their 20s-40s, cider is perfect for joshikai (“girls’ night out”) and generally speaking, social gatherings.

Long associated with regional food, French galette bistro and the likes, this segment now benefits from a national visibility in convenient stores and supermarkets, promoted by leading manufacturers, importers and retailers.

Japan’s cider market can be divided into three major segments

Japan’s cider market is largely dominated by domestic brands with more than 80% share in volume. The domestic production can be divided into apple producing regions’ well-established local cider makers and Japanese beverage industry leading players.

Japanese Local cideries

While Japan has a long history of growing high-quality apples, Aomori Prefecture notably producing more than half of Japan's annual harvest with over 50 millions tons of apples, its cider culture is relatively recent.

However, Aomori and Nagano prefectures’ local governments are actively supporting local brands educating the public through events and providing subsidies and programs for the establishment of new breweries. Japanese cider makers (TENTO, VinVie, Ringo School Cidery, Kamoshika Cider...) also partnered up to proactively promote cider through cidery tour and online campaign.

Japan's Cider Market_Cidery Tour
Promotional pamphlet promoting Cidery Tourism

If Japanese consumers tend to purchase local brand directly from cider makers - through agro-tourism or, in the recent years, through e-commerce, craft ciders are also distributed by high-end supermarkets and department stores, which offer upper-market goods in a curated setting.

Mainstream cider brands

The market distribution by volume showed that Japan’s top 3 brands are all domestic, with Nikka (Asahi Holdings), Hard Cidre (Kirin) and Additive-free Wine Cidre (Mercian/Kirin) accounting for 79% of the volume in 2019. What’s more, Mercian’s Additive-free Wine Cidre barely launched in 2019, was propelled to the top within 9 months, a success story that could better engage the trade with the cider category.

Both by volume and value, analysis shows that Japan’s cider market is mainly driven by off-trade channel sales, with respectively 65% and 62% . Asahi’s Nikka and Kirin’s Hard Cider’s presence in convenience stores and supermarkets contributed to raise cider awareness and usage within RTD drinkers

Japan's Cider Market leading brand Nikka
Nikka, top 2 brand leading Japan’s Cider Market

Market leaders Kirin (48% of the market share) and Asahi (37%) are driving the on-trade channel sales with a wide distribution in Japan’s French bistros.

Imported cider brands

With 42% of imported cider market share in volumes and 58% in value, France is the largest cider import country. The bigger market share in value than volume is explained by higher price and ratio of on-trade sales. Next in line, Belgium stands as the second largest import country with its popular brand Strongbow, largely distributed in bars, pubs and entertainment channels. Quite interestingly, imports from the United Kingdom, United States and Ireland are still very limited despite internationally renowned brands.

Japan's Cider Market_French import brands
French brands of cider imported in Japan

If only a minority of foreign brands are imported to Japan today, they hold a higher market share in value due to overall higher price per liter and more on-trade sales.

Promising, Japan’s cider market entry isn't without obstacles

The cider segment is showing signs of growth and the time is right to enter the market. However, foreign operators looking into expanding their business in Japan’s cider need to pay attention to key barriers, starting with cider’s positioning.

Cider still needs to “cross the chasm” in Japanese consumers’ minds

Cider clearly gained national visibility, particularly in stores. But its positioning in terms of consumption, occasion and taste, isn't clear yet in Japanese consumer's mind. Borrowing the sophistication of sparkling wines, while sharing the complex distinctive taste of craft beers, cider is neither and this unclarity definitely represents a key barrier the industry needs to overcome.

Not mainstream enough for the industry to push cider development

Side effect of the lack of a clear positioning, early cider consumers community did not yet reach a critical size enough to influence the trade. Thus the beverage industry manufacturers have low incentive to allocate resources on cider development while adjacent categories - beer, wine and RTD’s, are heavily impacting their businesses.

Pricing competition from the sparkling wine segment

With Japan-EU Economic Partnership Agreement entered into force in 2019, imported sparkling wines are now booming with low prices, in particular Spanish Cava. As a result, imported cider, French brands in particular, became less competitive. Breaking into Japan’s cider market requires serious price strategy and analysis.

Are you a leading producer looking to expand on Japan’s cider market? We can help your company strategize your market entry.

GourmetPro is a market consulting company based in Japan committed to helping the food and beverage companies grow by offering end-to-end customizable market-entry solutions in areas of value chain assessment, competition analysis, conducting store checks, and carrying out negotiations supported by tailor-made sales presentations in Japanese.

We also assist F&B companies by identifying prospects and placing them in strategic positions through; recognizing potential areas, screening distributors, matching them with the appropriate businesses, setting up supply chains, and a lot more. Contact us today.