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Yo-ho cracks open a cold one for Japan's craft beer market

Brewery looks to preserve character while keeping popularity bubbling at home

Yo-Ho Brewing President Naoyuki Ide presents the all-new Yona Yona Ale in Tokyo on Thursday.

TOKYO -- With consumers across the world developing a taste for craft beers, Japan's leading player, Yo-ho Brewing, has revamped its mainstay ale for the first time in 20 years as it treads a delicate line between competing with the big brands that dominate the Japanese market and maintaining its distinct identity.

"We were after the more classic flavor that is popular in the U.S.," President Naoyuki Ide said at a launch event on Thursday. This is the first change in Yona Yona Ale since it hit the shelves in 1997.

Yo-ho spent a decade trying to replicate the stronger hoppy aroma and other flavors commonly found in American craft beers. The new Yona Yona Ale is priced at 248 yen ($2.28) plus tax, slightly above the big-brand products.

Many consumers are attracted to the variety of flavors and branding that often characterize craft beers. Even beverage titan Kirin Holdings is making serious inroads in the field.

Craft beers are said to account for only around 1% of the Japanese beer market now, but are expected to hit 3% in 2021. "The market share will definitely reach 10% over the medium to long term," Ide said.

Beer makers around the world are facing an increasingly tough environment. Global production dipped 0.6% in 2016 to 190 million kiloliters, according to Kirin. Even the mega-brands such as Budweiser have suffered a decline in sales for three straight years. Meanwhile, craft beers are gaining ground in major markets like the U.S., Germany and China. They are now said to account for more than 20% of all beer sales in the U.S.

More than 200 breweries have jumped on the trend in Japan. But about 90% of them are small or midsize regional companies that do not have the necessary production and distribution system to go national, even if they have a distinctive and appealing product.

Yo-ho, which began as subsidiary of Hoshino Resorts, entered a capital partnership with Kirin in 2014, because it could no longer keep up with demand on its own. Some say that such partnerships undermine the independence of craft beer breweries.

As it becomes a more established name, Yo-ho could turn into another run-of-the-mill beer maker. Its relaunch of Yona Yona Ale will be a test of its identity.

(Nikkei)

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