Kanpai to the Japanese Whisky Industry!

Back to Contents of Issue: October 2005

by Kym Hutcheon

Ten years ago, try to order a Japanese single malt in almost any bar on the planet, and your best return would probably be a doubtful "Japanese whisky? From, uh Japan?" Not anymore, however. The world of whisky has been made anew.

Just a decade ago the idea of Japan producing whisky, and very good whisky, would have been a source of wonder for most tipplers around the globe. Fast-forward to a better-informed present, and we now have the noted beverage writer Michael Jackson predicting that by 2020 Japan could rival current industry leader Scotland. Understandably, Jackson's claim has not found universal agreement -- a thoughtful pause would probably be a better description -- but the parallel between Japan's rise and the challenge to France's traditional dominance by New World wines is hard to miss.

Japanese distillers may seem to have appeared on the international scene out of nowhere. Yet the top two local companies, Suntory and Nikka, have actually been gradually building their overseas businesses since the late 1950s. But it was not until 1994, when Suntory acquired Scotland's award-winning Morrison Bowmore group, trumping Nikka's 1989 purchase of the Ben Nevis distillery, that the Japanese industry really announced itself.

Even at this point, many probably saw the acquisitions as simply glory buys -- a natural progression from the golf course purchases of the 80s. This changed significantly in 2001, when Nikka took first place in Whisky Magazine's biannual tasting competition. Suddenly people were showing Japanese whisky a little more respect. Suntory proved Nikka's win was no anomaly by pulling off a similar gold-medal coup at the 2003 International Spirits Challenge, followed by a series of equally desirable awards in 2004 and 2005.

Distilling a Japanese market
If this seems like a dramatic turn in the story of Japanese whisky, it is only par for a heavily twisting narrative. The industry has come a long way in its brief 80-odd-year history, but if Suntory founder Torii Shinjo had heeded general opinion when he announced his plans to produce locally, it would probably not exist at all. Fortunately, as he had been on previous occasions, Torii was sure of his judgment, and established Japan's first distillery at Yamazaki near Kyoto in 1923.

The naysayers had a straightforward case: Scotch-style whisky's full-bodied flavor would be too strong for sensitive Japanese taste buds. However, while Torii was a man with a vision, he was not blind to his market. His mission was to produce a whisky with a delicate taste pleasing to Japanese palates and compatible with the subtle flavors of traditional dishes.

Creating a whisky specifically to be drunk with food was, and still is, fairly left-field thinking for most Western distillers.

But Torii's marketing nous did not end there. His second goal was to infuse the new spirit with a taste that would be impervious to dilution by water. The idea of adding mixers to a quality whisky is a thought crime for serious connoisseurs, but this has not stopped Suntory from using the concept as the basis for its highly successful mizuwari ("whisky and water") drinking style, today promoted as "half rock." This long-running marketing campaign has been the key to building a whisky culture in Japan. Indeed, local whisky is often drunk with a meal, rather than before or after as in the West.

Unluckily for Torii, despite the Yamazaki area's excellent water, early results justified the pessimism of the naysayers. Suntory legend has it that with all the supplies going into the distillery and little coming out locals began to whisper the company was creating a kind of Frankenstein's monster. They may not have been far wrong. It took Suntory until 1937 to release what it touts as "the first real Japanese whisky," its still-popular Kakubin line.



Absent from Suntory's official version of the early times is the name of Taketsuru Masatake. Which is inexplicable; Taketsuru played a central role in setting up the Yamazaki facility. He was a unique figure, travelling to Scotland to study whisky production at Glasgow University and local distilleries, before returning home in 1921 with his Scottish bride. He was also the man behind Nikka. Both Suntory and Nikka claim the title "father of Japanese whisky" for their founder, but this is one paternity dispute not even DNA testing can resolve.

Information about the relationship between Torii and Taketsuru is scant, but it seems Taketsuru became disillusioned with Suntory and in 1934 headed for Hokkaido to set up the Yoichi distillery. He was a man with a mission: the introduction of the pleasures of authentic Scotch-style whisky to the Japanese. Taketsuru continued to guide Nikka even after it was absorbed by Asahi Breweries in the mid-1950s. Nikka claims it has remained true to Taketsuru's original real whisky ideal -- which may provide a clue to Suntory's 60-plus percent armlock on the market.

Regardless of who was the dominant partner in the cult of personality that launched the industry, neither Torii nor Taketsuru received much credit until the postwar economic boom of the 1950s. As the economy grew, so did the nation's desire for symbols of its success: Cue the lights center stage for the entry of a sophisticated Western beverage, whisky. The salaried workers lapped it up, and Suntory, in particular, did its best to ensure Japan's polyester-suited stars always had a taste of the good life close to hand. As well as setting up a nationwide chain of budget Tory's bars, Suntory launched Yoshu Tengoku ("Western Liquor Heaven"), a magazine it used to promote its whisky-and-water drinking style.

The image of whisky has become closely linked with prosperity in Japan, making the liquor a good barometer for the state of the economy. The industry's mercury continued to rise into the late 1980s -- or until the government lanced the bubble economy. Domestic whisky sales have been in a major slump ever since. And with fewer young Japanese acquiring the taste, the market can only be described as maturing.

Uncorking international sales
Ironically, the protracted recession may have ultimately benefited both the industry and the nation. The recession encouraged Japan to stand down from the growth-at-all-costs, semi-war economy footing adopted in the late 1940s, allowing more creative forces to bubble to the surface. Businesses are slowly realizing the potential of lifestyle-related products, and that Japaneseness itself is a highly marketable attribute. The most obvious example of this is Japanese food, currently hitting big worldwide, but local entertainment, fashion and sports people are also selling well.

Beverage writer Michael Jackson makes the case for local drams in his latest volume Whisky: The Definitive World Guide (April 2005): "When a Japanese whisky won Whisky Magazine's 2001 international tasting... it caused people to sit up and take notice." He continues, "Japanese oak casks bring a joss-stick-like quality to it as well. People used to laugh at Japanese cars, but they are now a by-word for reliability. And look how sushi has taken off."

Jackson may be no Japanologist (a joss-stick-like quality?), but his comments do touch on several key points underpinning the international prospects of Japanese distillers. The main one is that they will have to overcome lingering skepticism among consumers to duplicate the success of automotive and electronics manufacturers. A quick survey of responses to Jackson's comments on news groups and mailing lists shows he definitely has this right.

However, the door is open. The global malt whisky market, already worth billions, is currently growing at record speed. This expansion is being pushed along by international beverage corporations, which have now acquired all but one of Scotland's main distillers, with a view to slaking the growing thirst for whisky in countries such as China, India, Russia and Brazil. Factor in the present surge of interest in things Nipponica -- the afterglow of Jackson's sushi boom? -- and the chances of Japan increasing its small sliver of the market start to look rosy.

Suntory and Nikka certainly have the product to convince tipplers, as their awards prove. And contradicting the persistent image of Japanese as imitators, they also have innovation on their side. Suntory has led this innovation, adventurously using Japanese oak in its maturing barrels, as well as experimenting with different still sizes, yeast types and malt drying ingredients. Each of these factors leaves a distinct and, judging by the praise from critics, highly marketable imprint on the bouquet and flavor of the spirit.



Having the critics and other opinion leaders with you is, of course, critical in the upper-end single malt segment targeted by Suntory and Nikka. Fortunately, both companies have their champions. Jackson has consistently given the Japanese industry positive press, and Whisky Magazine's website also carries some very warm reviews. This all builds credibility -- as does the Scotch Malt Whisky Society's recent addition of Japanese drams to its official register. On the flip side, the vocal resistance by some society members to this listing gives an indication of the entrenched attitudes J-whisky is up against.

You have to wonder what these connoisseurs will make of Suntory's latest release, Aqua Vitae. This new drop is based on the company's research into the health properties of whisky's "soothing aroma" and high polyphenol levels. Polyphenols are the antioxidants that had people running out to load up on red wine a couple of years back. So, indisputably, Suntory has the product. And the production and delivery systems: Suntory's Hakushu distillery is the world's largest, while its international distributor, Allied Domecq, weighs in as the globe's number two beverage corporation.

But do Japanese distillers have the will to make inroads into world markets? Nikka sends mixed signals on this point. Its PR staff claim the company is fully committed to promoting its top single malts in Europe, yet they also say Nikka is working first to revive demand in the domestic market. Suntory's people are far less cryptic about international strategies -- they simply decline to comment. However, Suntory is clearly a step ahead in the world arena. That was clear with the release of Lost in Translation, in which an American (Bill Murray) comes to Tokyo to promote Suntory whisky.

Sophia Coppola's surprise 2003 hit is probably the longest example of product placement marketing in cinema history, and Suntory's profile has benefited significantly from the exposure. Even Nikka has enjoyed a rub-off effect: particularly in the U.S., the film was the first indication for many people that Japan actually produces whisky, of any sort. Suntory has been busy trying to farm this seed of awareness since. The LiT link was a central point of reference in the follow-up promotion the company unrolled in mid-2004, initially in New York and Chicago, via the American arm of Dentsu, the behemoth Japanese ad agency.

Suntory has also been working to redefine itself as an international, but still uniquely Japanese, whisky maker in other less obvious ways. For example, the labels of its export lines now carry the distillery name written in muscular Japanese calligraphy, and some of these labels have the look of traditional Japanese washi paper. Suntory has also changed the product description on its premium lines from "pure malt whisky" to "single malt whisky," the latter being more familiar to overseas drinkers. So, where does all this leave our man Michael Jackson and his prediction? To distill it right down: looking like he may be right. The groundwork has definitely been laid. As Suntory notes, "the year of 2004 turned out for... Japanese whisky to be internationally acclaimed for its technology and uniqueness." The task ahead is to convince more punters in more places to suspend preconception and take that first all-important dram. If Suntory and Nikka's marketing teams can do this, their whisky has the power to convert non-believers.

It will be a long-term mission, but patience is a virtue whisky people have by the barrelload. Let's hope so. The idea of enjoying a slow, healthy finger of Aqua Vitae in an exotic locale appeals. Kanpai, Skoal, Slainte Mhath to Japan's whisky makers! JI

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