Major brewery Hakutsuru Sake aims to double sales volume for the Chinese market by fiscal year 2025, compared with the plan for the current fiscal year. Oenon Holdings, which sells sake and other alcoholic beverages, will quadruple export volume in fiscal 2023 compared with fiscal 2021.

Sake exports to China have increased by a factor of about 50 in the past 10 years, with sake brewers eager to capture a share of the market. Meanwhile, demand in Japan has dwindled to less than 30% of the peak nearly five decades ago.

Hakutsuru’s exports to China in fiscal 2021 increased 65% by value compared with the previous year, and the fiscal 2022 figures are on track to be more than 50% higher than in fiscal 2021.

“There are restrictions on the rice that can be used as a raw material for sake for China, so we produce it separately from products for other destinations,” said Masayoshi Matsunaga of the overseas business department. He went on to say that the company is considering strengthening its production system, with plans to double the number of products in addition to the volume increase.

Kizakura, another major producer, also sees export value increasing by more than 50% year-on-year. It is considering developing products specially for Chinese customers to meet their needs.

According to the finance ministry’s trade statistics, the value of overseas sake exports in 2021 totalled ¥40.1 billion, up 66% from 2020, and about 4.6 times higher than in 2011.

In particular, China’s recent growth has been remarkable. Exports to that country for 2021 increased by 77% compared with the previous year, to ¥10.2 billion, making China the top country for sake exports for the first time. According to calculations compiled by the National Tax Agency in March, the Chinese market alone is expected to expand by about ¥30 billion.

While the overseas market is doing well, the Japanese market continues to shrink. According to the National Tax Agency, domestic shipments of sake in fiscal 2020 were down about 10% from the previous year, totalling 410,000 kilolitres, less than 30% of the peak in fiscal 1973.

Many other sake makers are also set to expand overseas to cover the shrinking domestic market.

Takara Holdings has set up a local subsidiary in Beijing that produces sake for the Chinese market, while products that cannot be manufactured locally are exported from Japan. It also sells products exclusive to the Chinese market. High-end sake that sells to wealthy consumers for about ¥100,000 a bottle is popular.

Regional brewer Asahi Shuzo plans to increase the number of skilled sake brewers it employs by about 80% over the next three years, thanks to increasing sales in China.

Although the Chinese market for sake is growing, its percentage of overall alcohol consumption is still low. According to the British drinks market research firm IWSR, sake accounted for 0.01% of alcohol consumption in China in 2020, compared with beer at 77% and baijiu, a Chinese distilled liquor, at 15%.