Suntory Group Alcoholic Beverages Business Strategy for 2014

In 2013, the Suntory Group’s alcoholic beverages business was up on the previous year due to factors such as the creation of new demand by breaking ground in the RTS*category, in addition to the strengthening of its core brands such as The Premium Malt’s, Kin-Mugi, All-Free, Kakubin, Yamazaki, Hakushu, and -196°C. The group will continue to roll out proactive initiatives in an effort toward further growth in 2014.

In 2014, Suntory Liquors Limited will make “premium” in the sense of high added value our key focus and work to build demand by offering value. In addition, we will take on the challenge of innovation in every area from product development to the creation of new categories, all oriented toward creating new value.

Suntory will roll out proactive marketing initiatives for core brands such as The Premium Malt’s, Kakubin, and -196°C, RTS beverages, and more.On top of that, outside of Japan we will seek to develop a portfolio of brands that engage the unique circumstances of each region in order to establish solid bases for business.

Spirit Business

Suntory’s spirits business in 2013, due to the breaking of new ground in the RTS category and other achievements in addition to the favorable growth of core brands including Kakubin, Yamazaki, Hakushu, and -196°C, 3% growth was achieved compared to the previous year. In 2014, we will aim for 1% growth compared to the previous year by continuing to cultivate and strengthen our brands further in growing categories including highballs, premium whiskies, RTDs, and RTSs.

Whisky

Review of 2013

The whisky market is estimated to perform better than the previous year due to expanding demand for highballs and premium category beverages. With that, there were effects due to some changes in the brands of imported whiskies purveyed, but the core brands performed favorably.

Kakubin showed growth of 3% compared to the previous year as a result of efforts to more actively promote its compatibility with food with the aim of further market expansion and the establishment of highballs. Additionally, Premium Kakubin, which went on sale in May, has received high praise.

As for domestic premium whiskies, Yamazaki, Hakushu, and Hibiki 12 Years Old (in a 500 mL size) made favorable movement, up 16% compared to the previous year. Suntory’s whiskies have taken prizes in worldwide liquor competitions, with Hibiki 21 Years Old winning a “Trophy,” the highest prize in its category, “Worldwide Whiskies,” and Suntory Liquors Limited being named Distiller of the Year for the third time at the 2013 International Spirits Challenge (ISC).

Further, Jim Beam, the world’s top*6 bourbon, which Suntory began handling in January, has made great contributions in terms of acquiring new consumers and activating the import whisky market.

*6 2012 sales numbers (Source: IMPACT NEWSLETTER February Volumes 1 & 15, 2013)

Strategy for 2014

Suntory will work to activate the whisky market through such efforts as bolstering marketing activities for Kakubin, strengthening premium whisky value promotion activities, strengthening marketing activities for Jim Beam and Maker’s Mark, all with the aim of 1% growth over the previous year.

Strengthening Kakubin marketing activities

Suntory will strengthen its marketing activities related to Kakubin using good flavor and compatibility with food as themes. The relevant television commercials will be re-launched in February, and in conjunction with those commercials Suntory will make appeals to shops involving how to create delicious kaku highballs and the allure of the same as drinks to go with food. Suntory will work with drinking establishments to expand kaku highball fandom by further bolstering activities related to quality at the point of consumption.
 
Strengthening premium whisky value promotion

In order to help consumers experience the luxurious frame of mine inherent to whisky, Suntory will continue to strengthen its marketing activities related to premium whiskies with a central focus on the Hibiki brand and appeal to the high quality that comes with the group’s various malts and superior blending techniques. Additionally, by strengthening marketing activities for smaller size units of Yamazaki, Hakushu, and Hibiki 21 Years Old, the group is working to expand the arena of premium whisky drinking. The Hakushu brand has garnered high praise from the younger generation for Hakushu highballs with mint, and Suntory will work to make active proposals for television commercials and more to promote the brand and acquire new consumers.
 
Strengthening marketing activities for Jim Beam and Maker’s Mark

Suntory will be investing in new television commercials starting in mid-January for Jim Beam, the world’s top bourbon, keeping “cool bourbon” as its key message with the aim of further improving brand recognition and desirability. As for Maker’s Mark, the group will make appeals based on the high quality carefully distilled into each and every bottle through seminars and other events.

Overseas Alcoholic Beverage Business

Review of 2013In terms of whisky, our active promotion of Yamazaki, Hakushu, and Hibiki in Europe and America and Kakubin in Asia enjoyed favorable reception, and we expanded our whisky sales abroad. The Premium Malt’s showed favorable growth in Asia. With Morrison Bowmore Distillers Limited we have expanded sales with a focus on Bowmore and Auchentoshan single malt whiskies.Strategy for 2014We will strengthen marketing campaigns in accordance with the unique circumstances of each region throughout the world. In Europe and America, we will develop the Yamazaki, Hakushu, and Hibiki lines of premium whisky, as well as the liqueur MIDORI, while in Asia we will develop Kakubin and The Premium Malt’s. Similarly, we will continue our active efforts to strengthen Bowmore and Auchentoshan single malt whiskies as global brands.

*RTS (Ready to Serve): Alcoholic beverages finished with a balanced taste optimized for drinking on ice, with an alcohol content between roughly 10% and 20%.