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Business trends

Sake startups bring Japan's old brew to new markets abroad

Urban microbrewer sets up shop in France, while others target the wealthy

Takuma Inagawa, left, CEO of Wakaze, poses with Chief Technology Officer Shoya Imai in front of their brew at Kura Grand Paris, in a suburb of the French capital.

TOKYO -- Sake is winning over drinkers around the world as more people come to appreciate the subtle flavors and aromas of the rice-based brew.

A survey by Japanese sake startup Clear shows there were at least 35 sake breweries operating overseas last year. In the U.S. and Europe, several sake microbreweries have appeared in recent years. Brooklyn Kura, which began making sake in New York in 2018, has attracted a lot of attention, with many brewers visiting from Japan.

Back in Japan, the pioneer among urban sake microbreweries is Wakaze. Founded in Tsuruoka, Yamagata Prefecture, in 2016, the company opened Whim Sake & Tapas, a Tokyo restaurant with a doburoku microbrewery on the premises. The restaurant serves fresh-brewed doburoku -- traditionally a low-alcohol home brew -- as well as a unique sake matured in wine casks and flavored with yuzu citrus fruit and Japanese pepper.

Like sake, doburoku is made from rice, water and kome koji (rice malt) and fermented with yeast. What sets them apart is the final process. Sake is filtered, giving it a clear appearance, while doburoku is unfiltered, which makes it cloudy.

Wakaze also makes sake in France. Last year, the company founded Kura Grand Paris in a suburb of the French capital, brewing on site with local ingredients such as mineral water and rice grown in southern France. It also uses local wine yeast and casks made in Burgundy.

Shuhei Okazumi, head of Konohana Brewery, uses techniques he learned at Aramasa, a venerable sake brewer based in Japan's northern Akita Prefecture.

"We wanted to create a base to disseminate the culture of sake-making" said Shintaro Iwai, Wakaze's 34-year-old chief operating officer.

Kura Grand Paris aims to build awareness of sake among French consumers by deepening ties with the local community through events such as sake-brewing workshops as soon as the COVID-19 pandemic eases.

Other startups are opting instead for small-batch production of brews with distinctive characteristics. Archis, based in Yamaguchi Prefecture, in western Japan, targets upscale drinkers. Its Mujaku label has a flavor that changes over time, like wine, when kept in storage. A 750 ml bottle brewed in 2020 costs 88,000 yen ($850), much more than the typical sake.

Clear, a relative newcomer founded in 2013, also offers sake as a luxury item. It has developed Gengai with breweries in Hyogo and Yamagata prefectures. A 500 ml bottle of 25-year-old Gengai costs 150,000 yen. The company works with small brewers in rural areas, supporting their operations.

"Those familiar with the sake business say it can never be sold at high prices, but it can be done," said Clear CEO Ryuji Ikoma, 34. The company's customers include Musashi by Aman, a sushi restaurant at a luxury hotel in Tokyo, and other well-known restaurants across the country. Its business is thriving, with monthly sales topping 200 million yen in October. The company aims to expand by targeting luxury hotels in Dubai and elsewhere.

Small breweries are also trying new approaches, with some setting up shop in central Tokyo. Located in a fashionable area just five minutes' walk from the Kaminarimon Gate at the entrance to Tokyo's famed Senso-ji Temple, Konohanano Brewery specializes in doburoku. Shuhei Okazumi, the brewery's 32-year-old head, worked for five years at Aramasa, a brewery in Japan's northern Akita Prefecture that traces back to the Edo period (1603-1868).

Konohanano Brewery, which opened in June, has a pub where people can sample freshly brewed doburoku. It is eager to offer customers a new take on the drink, serving doburoku cocktails mixed with fruit, for example. The microbrewery also teaches sake-making techniques to aspiring brewers.

Annual sake shipments in Japan through June 2019 were less than 30% of their peak about 45 years earlier. The decline is mostly due to a drop in demand for standard sake. But sales of premium brews, such as junmai-shu and junmai ginjo, picked up in the 2010s, rising nearly 40% in 2018 from a decade earlier. Shipments of high-end sakes also bottomed out in value terms in 2011 and have since been rising.

Restaurants in Japan have seen a sharp decline in customer traffic since the pandemic took hold. Many breweries are trying to make up for sluggish demand with products aimed at home consumption and sales to retailers. But they continue to struggle with double-digit declines both in shipment volume and value. One bright spot is exports to China, which started to recover this summer, a sign that thirst for the ancient brew may continue to grow over the medium to long term.

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