Japan liquor businesses turn to non-alcoholic drinks to attract Gen Z
In Tokyo, the newly-opened Sumadori Bar -- a play on the Japanese words for "smart drinking" -- offers elaborate, sugary mocktails or cocktails with alcohol levels of up to 3%.
The bar, managed by Japanese beverage giant Asahi Group Holdings, provides an environment where both boozers and teetotallers can enjoy a drink together.
The popularity of low- and non-alcoholic drinks has risen worldwide, accelerated by the COVID-19 pandemic, which led many people to be more health conscious. The global market value for the segment rose to just under $10 billion in 2021 from $7.8 billion in 2018, according to market researcher IWSR.
The effect has been especially pronounced in Japan, where the older population -- which tends to drink more -- is shrinking rapidly. Just 7.8% of Japanese people in their 20s were regular drinkers in 2019 compared with 20.3% of that age group in 1999, according to government surveys.
"There are fewer drinking parties at my university club, so I don't hear about drinking opportunities nowadays. Maybe that's why there are fewer people drinking," said 20-year-old university student Kurumi Takahashi, who was visiting the bar with a friend.
Mizuho Kajiura, a general manager at Asahi, said the pandemic has also played a part, limiting opportunities for colleagues to socialise after work.
Facing a steady decline in revenue from alcohol sales, Japan's tax office in July launched a contest seeking ideas on how to stimulate demand among younger people.
Japan's major drink makers are also looking outside the country for growth. The chief of domestic beer leader Asahi Group Holdings told Reuters last month he saw North America as a key market. Suntory Holdings Group is also looking to expand its canned cocktail business there.
At home, companies are coming up with new ways to improve the bar experience for non-drinkers.
On a recent afternoon in the entertainment district of Roppongi, groups of mostly young women gathered at a no-alcohol "beer garden" set up in the shadow of one of Tokyo's tallest buildings.
Beer gardens are a summer tradition in Japan, but this one -- promoted by Suntory and broadcaster TV Asahi -- skipped the beer, offering patrons a lineup of mocktails and no-alcohol wine instead.
Masako Koura, the general manager of Suntory's business strategy division, said people enjoyed the atmosphere as well as the alcoholic beverage they consume and they hoped to create a space where everyone can enjoy themselves.
Competitor Kirin Holdings Co also offers non-alcoholic wines, cocktails and beer. The company said sales of its booze-free beer were up more than two-fold in the three months through June compared with a year ago.
But for some, the new trend is a hard sell.
“Oh no, I cannot believe there are fewer people drinking. The people around me all drink," said 61-year-old Satsuki Matsuzaki.
Traditional bars with lanterns, low lighting and cold beer live on.
