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Food & Beverage

Japanese craft beer maker to set up shop in Russia's Far East

Niigata Beer's award-winning whisky is a big hit overseas

Niigata Beer branched out into craft whisky last year and already cannot keep up with global demand. (Photo courtesy of Niigata Beer)

NIIGATA, Japan -- Niigata Beer stands out among the brewers and distillers of Niigata Prefecture in northern Japan. It chose to brew specialty beers, and later whisky, in a region famous for sake.

The area's affinity for the traditional Japanese drink meant that demand for the company's craft whisky was low. Ninety percent of the distillery's output is shipped abroad. Overseas, however, the spirits are a hit, and the company plans to start distilling whisky in Russia through a joint venture with a Russian partner.

Demand for high-quality beer and whisky is rising in Russia. Meanwhile, Niigata's public and private sectors have long promoted economic exchanges with the Russian Far East, which lies just across the Sea of Japan. Direct flights connect Niigata and Vladivostok, where Niigata Beer's new distillery will be located, every summer.

"A friend from college pushed me to start thinking about making beer in Russia," said Ken Usami, founder and CEO of Niigata Beer. The friend told him that a Russian company complained it could not find high-quality beer domestically, and it was eager to learn brewing techniques from Japan.

Usami contacted the company and launched a project to brew craft beer in Russia. When he later shared his plans to start distilling whisky, the Russian company encouraged him to also make whisky in Russia.

Niigata Beer expects to own a 30% stake in the Russia venture. The new company will remodel an existing building into a restaurant and put the brewery and distillery next to it. Plans are for beer to go on sale first. Workers will be invited to Japan, where they will be trained to make craft beer and spirits.

Niigata Beer is also hunting for other overseas production sites. It is working toward establishing a joint venture with an partner in Singapore by the end of this year, and will produce whisky elsewhere in Asia as early as next year, as it seeks to meet growing Asian demand.

The company is still small, with annual sales of 340 million yen ($3.12 million) in the fiscal year ended in September 2019. It expects sales to increase to 500 million yen next fiscal year, but that will still leave it much smaller than other craft beer makers like Yoho Brewing, to say nothing of beverage giants like Suntory or Asahi.

Before starting the company in 1997, Usami worked as a researcher at a foreign pharmaceutical manufacturer. "One day, I found there were no beers that I really wanted to drink," he said. He resolved to make such a drink himself and quit his job to do so.

After four years of learning about brewing, he made a beer that satisfied him, and he founded Niigata Beer.

With the brewery up and running, Usami turned his attention to whisky. Niigata Beer started selling the spirit last year.

The company's Koshi no Shinobu blended whisky series won a gold medal in The San Francisco World Spirits Competition 2019, the largest competition in the U.S. It has been sold in the U.S., Hong Kong and eight other foreign markets.

After its win, the young distillery gained a reputation among aficionados. It is receiving more orders and overseas production expansion requests than it can handle.

The company is building another distillery in Japan on Niigata's Sado Island to make a single malt whisky from Sado-grown barley. The island is ideally located -- it has a relatively warm climate and low rainfall thanks to the warm ocean current in the Sea of Japan.

The new distillery will be built with a local company that invited Usami to produce whisky on Sado. It will have a visitor facility to lure tourists to the island. "It would be great if the new distillery becomes a popular tourist spot," said Usami. The distillery received its production license on Oct. 9 and intends to start operations by the end of the year.

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