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January 12, 2005
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Kirin
Brewery Company, Limited
Business Approach for 2005
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Kirin Brewery Company, Limited (President: Koichiro Aramaki), has formulated its
business strategy for 2005, the second year of its 2004-2006 Kirin Group Medium-Term
Business Plan.
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| Overview
of 2004 |
In 2004, the first fiscal year of the medium-term business plan, the
Kirin Group strove to achieve a qualitative transformation into a corporate group
with maximized development and proposal strengths through concerted efforts to
improve the value of the Kirin brand. Throughout the Kirin Group, we are enhancing
performance by creating a new business framework with the soft drinks business
and improving profitability.
In the mainstay domestic alcohol beverages business, the beer and
happo-shu (low malt beer) markets appear to be shrinking in scale with
the emergence of new categories*1 and the uncertain
prospect of the domestic economy.
At Kirin, the sales volume of beer and happo-shu totaled 178
million cases, a decrease of 2.8% from the previous fiscal year (633ml bottle
x 20). ‚The sales volume of low-alcohol beverages*2
declined 1.7% year on year to 196.8 million cases.
| *1: |
New
category products entered the market in 2004, following on from beer and happo-shu.
Under the Japanese liquor tax law these products are taxed at a lower rate, under
a section of the ‘miscellaneous liquors’ category, because of the nature of their
ingredients. |
| *2: |
Low-alcohol
beverages with less than 10% alcohol content including beer, happo-shu
and chu-hi. |
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| Objectives
for 2005 |
Basic Companywide Policies:
| · |
Accelerate
our qualitative transformation into a corporate group with maximized development
and proposal strengths through concerted efforts to improve the value of the Kirin
brand and realize the 2004-2006 Kirin Group Medium-Term Business Plan. |
| · |
Aim
to strengthen competitiveness by prioritizing measures aimed at bolstering the
domestic alcohol beverages business while developing the comprehensive alcohol
beverages business centered on the low-alcohol beverage market. |
1. Initiatives in the Domestic
Alcohol Beverages Business
In 2005, the
emphasis will continue to shift to growing product categories in the alcohol beverages
market, and divisions between product categories will become less clear in the
low-alcohol beverages market.
Primary Measures:
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In
the main product categories of beer, happo-shu and chu-hi, Kirin
will further enhance its product brand names while also entering a high-potential
new category. The Company aims to steadily attain its numerical targets by acquiring
a leading position in each low-alcohol beverage category. |
| · |
Kirin
aims to boost competitiveness by expanding Group synergies and accelerating the
shift from price marketing to value marketing through the establishment of new
transaction system (open pricing), as well as the strengthening of the sales structure
and area communications. |
Through these measures, Kirin aims to achieve sales volume of 203.1
million cases of low-alcohol beverages, for an increase of 3.2% year on year.
Our numerical targets in each major product category comprise 91.3
million cases in beer (3.8% year-on-year decrease), 70.7 million cases in happo-shu
(14.9% year-on-year decrease), 19.7 million cases in new product categories, and
41.7 million cases in chu-hi (15.5% year-on-year increase; 250ml can conversion:
250ml x 24 cans).
(1) Reinforcing Brand Value
1. Happo-shu
In 2004, the happo-shu market exceeded for the second consecutive
year the scale of the beer market in the household market. Regarding happo-shu
as a standard product category, Kirin will drive the market with more appealing
products such as its mainstay Kirin Tanrei Nama, Kirin Green Label,
and Tanrei Alpha, all of which were renewed in 2005. Kirin will launch
new TV commercials featuring celebrities such as Kenji Sakaguchi as a part of
large-scale advertising campaigns. At the same time, we will also hold large sampling
events.
Reaffirming its advantageous position in the market, Kirin will continue
to lead the happo-shu market through the development of unique brands in
tune with diverse customer needs, such as Yawaraka, which offers a new
taste with lactic fermentation, and Kirin Komugi, which uses wheat as a
basic ingredient.
2. Beer
In line with the popularization of happo-shu, customer expectations
are rising for beer to provide a difference with premium value. Kirin believes
that beer contributes the most to improving its corporate brand. Accordingly,
we aim to further increase customer support for our beers by enhancing brand value
both in the household and on-premise markets through initiatives to clarify the
value of Kirin beer.
Following its renewal in 2004, Kirin Ichiban Shibori Nama Beer
achieved positive year-on-year growth for the first time in a decade. In 2005,
we will continue advertisements featuring Koichi Sato and further appeal with
high-quality taste in tandem with the promotion of the Kirin Tarunama System.
With Kirin Classic Lager and Kirin Lager Beer, the Company will
continue to run advertisements that appeal to the Lager brand’s image
of ‘bringing people together.’ With ‘chilled beer,’ a value-added
area Kirin pioneered ahead of competitors, the Company is redesigning the packaging
and taste of Maroyaka Kobo in an aim to firmly establish the chilled beer
category along with Hojun. For Heartland, Kirin will implement unique
marketing that conveys brand value and expand sales of single-serving bottles
in the on-premise market.
3. New products
In 2004, the scale of new product categories was approximately 5%
of the beer and happo-shu market. To meet customer needs, Kirin aims to
gain support for a new product to be launched in spring 2005, developed with the
Company’s combined technological expertise and market-creating product development
capabilities.
4. Chu-hi
Due to diversification in products and drinking opportunities, the
chu-hi market has nearly doubled in size over the past four years. With
Kirin Chu-hi Hyoketsu, we will introduce new lychee flavor in March 2005
and continue expanding our original lineup to further ensure an overwhelming position
in the market. Kirin also aims to create a new market by strengthening promotions
of our sugar-free, non-carbonated Kirin Yoicha Chu-Hi.
5. Shochu and other categories
We plan to reinforce the positioning of Kirin Mugi Shochu Pure
Blue as a high-quality brand. In the wine category, Kirin aims to increase
sales of Franzia table wines and Café de Paris sparkling wines.
In the whiskey category, Kirin will focus efforts on strengthening Chivas Regal
and Four Roses brands while invigorating domestic whiskeys. In the beer-flavored
beverage category, we are redesigning the packaging and taste for Malt Squash
in an aim to win further support.
(2) Reinforcing the Sales Structure and Marketing Capabilities
In January 2005, Kirin is implementing a new transaction system
(open pricing), putting in place an environment in the industry to ensure an appropriate
level of profits, and propose value-added products and services. In addition to
engaging in merchandizing activities at chain retailers, Kirin Communication Stage
Co., Ltd. is expanding in January 2005 from specific regions to taking over nationwide
quality assurance activities for our products in the on-premise market. Kirin
aims to become more proficient at proposal-based marketing that conveys the value
of its products to customers by promoting area communications through the Internet
and joint efforts with chain retailers, engaging in activities to create core
fans through collaboration with local companies and groups, and making quality
improvements to its marketing organization. |
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