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Japan's alcohol companies are turning to non-alcoholic drinks to attract Generation Z

Image: Reuters Berita 24 English - Manaka Okamoto goes against the old idea that college students drink a lot by thinking about what she ha...

Image: Reuters

Berita 24 English - Manaka Okamoto goes against the old idea that college students drink a lot by thinking about what she has planned for the next day before she cracks open a drink.

"If I have to get up early and think, 'Oh, I shouldn't drink,' I get a non-alcoholic drink to feel like I'm drinking," Okamoto, who is 22 and lives in Tokyo, said at a restaurant. "And of course, it's nice to have something to toast with when you're with friends who don't drink."

People are becoming more health conscious because of the pandemic, which has led to a rise in the popularity of low- and no-alcohol drinks around the world. IWSR, a research firm, says that the value of the segment's global market rose from $7.8 billion in 2018 to just under $10 billion in 2021.

The effect has been especially strong in Japan, where the number of people is falling and younger people drink much less than they did in the 1980s and 1990s. In 2019, 7.8% of Japanese people in their 20s were regular drinkers. In 1999, 20.3% of people in that age group were regular drinkers.

Because of a steady drop in sales of alcohol, Japan's tax office started a contest in July to find ways to get younger people to buy more alcohol.

The biggest drink companies in Japan are also looking for growth opportunities outside of Japan. Last month, the head of the largest Japanese beer company, Asahi Group Holdings, told Reuters that North America was a key market. Suntory Holdings Group wants to grow its business of selling canned cocktails there.

At home, the companies are thinking of new ways to make bars better for people who don't drink.

A "beer garden" with no alcohol was set up in the shadow of one of Tokyo's tallest buildings in the entertainment district of Roppongi. This is where groups of mostly young women got together.

Beer gardens are a summertime tradition in Japan, but this one, sponsored by Suntory and TV Asahi, didn't have any beer. Instead, it served mocktails and wine without alcohol.

Masako Koura, the general manager of Suntory, said, "Consumers don't just like alcoholic drinks. We think they like the conversations that happen when they drink, or they like the atmosphere of the place where they drink."

Kirin Holdings Co, a competitor, also sells wine, cocktails, and beer without alcohol. The company said that sales of its alcohol-free beer were more than double what they were a year ago in the three months leading up to June.

Sapporo Holdings Ltd said that sales of low-alcohol and non-alcoholic beer in Japan went up 20% in the six months leading up to June, while sales of canned beer went down by 4%.

The new Sumadori Bar in Shibuya is a play on the Japanese words for "smart drinking." It serves complicated, sugary drinks that can be made with or without alcohol (up to 3%). Mizuho Kajiura, the CEO of the Asahi-led venture, said that it gives everyone a place to hang out and drink together.

Kajiura worked in Indonesia for two years. He said that his time in the mostly Muslim country taught him how to make places welcoming for people who don't drink.

"The goal of this bar is to make sure that people who don't drink feel welcome so that they can come here with people who do," Kajiura said. "I think other restaurants and bars would get more customers if they understood what we were trying to do."

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