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By: Debbie Howard

Amidst flat to declining total alcohol consumption in Japan, wine consumption has risen more than threefold since 1965, and is now enjoying wider acceptance by Japanese consumers than ever before.

From the start, however, wine faced some of the same challenges encountered by other products in Japan, such as:

· Lack of traditional context (i.e., low per capita consumption and low share of alcohol consumed);

· New concept to market (i.e., high ratio of imports, with initial market entry only at high end); and

· Limited distribution opportunities (i.e., main distribution via foreign, high-end restaurants).

In addition to greater at-home consumption, wines are increasingly characterized by a wider range of:

· Price ranges (not only high-priced, exclusive wines, but also low-priced, everyday use wines);

· Sources of origin (not only French- and Euro-sourced wines, but also “new world” wines from California, Australia, New Zealand and Chile); and

· Distribution channels (not only high-end but also mainstream restaurants, as well as supermarkets, discount and convenience stores, and direct marketing channels).

Today, annual per capita consumption of from 2–3 liters (depending on the source) is still low compared to Western countries. However, based on value, wine expert Robert Parker’s website proclaims Japan as the largest wine importer in Asia — due both to its comparatively higher per capita consumption than other Asian countries, as well as the quality of wines imported.

The Japanese wine market is highly competitive, with imports from over 30 countries. France and the EU lead in terms of share, followed by the U.S. Import volumes for 2008 are expected to remain on par with 2007, which was typified by increases for Chile, Australia, and New Zealand. Meanwhile, values have held strong and are rising for EU and U.S. wines, based on growing consumption of mid-level priced wines (i.e., 1,500 yen or higher).

Momentum for imports is also receiving a turbo-charged boost from the weekly manga (comic book) called Kami no Shizuku (Drops of God), which focuses on fine wine and has 500,000 readers, particularly those aged 30–49, who are the highest potential market for increased wine consumption.

Drawn by a brother/sister team under the pseudonym of Tadashi Agi, Kami no Shizuku features two half-brothers — one a sommelier and one a wine novice — who travel the globe in search of the “12 best wines in the world.” The manga serves as a wine textbook for young and amateur wine drinkers, intertwining stories with appealing wine descriptions.

Featured wines become overnight hits, with one French winery selling 20,000 bottles of its special vintage release in one day. The manga’s influence is spreading to other Asian markets, creating boom wine sales in Taiwan, South Korea and China.

Wine importers and restaurateurs acknowledge its powerful influence in inspiring Japanese wine drinkers towards a more sophisticated experience. Sommelier courses for reportedly fully booked, and classes on wine appreciation are also increasing.

Yes — wine is a category that has grown and matured over a long period, and it will be fun to observe how it develops further!

Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.

Originally Published in Nikkei Weekly, 10th November 2008

CarterJMRN is a strategic market research agency that has been helping clients with consumers and businesses in Japan and beyond since 1989.

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