Introduction If you are a whisky enthusiast, you must have heard of Suntory. If you are a fan of unsweetened tea drinks, you must have heard of Suntory. If you have done a bit of research in the consumer sector, you must have heard of Suntory. When it comes to Suntory, what comes to mind first? Is it the countless magical combinations of oolong tea on Xiaohongshu? Or the aged Yamazaki that has been hyped up as an investment product? It is worth noting that in terms of market value, the world's largest spirits group is Moutai. Suntory's market value is not even higher than Wuliangye's, let alone compared with established spirits companies like Diageo, Pernod Ricard, and Bacardi. However, in terms of global influence, the number of brands owned, and audience reach, today's Suntory has surpassed Bacardi and can definitely rank in the top three. In addition to representative Japanese whiskies like Yamazaki, Hakushu, and Hibiki, Suntory also acquired the American classic whisky brand Jim Beam. In 2014, Suntory completed the acquisition of Jim Beam for $16 billion and named the company Beam Suntory. The three whiskies and several brandies under Jim Beam all came under Suntory, making it the world's third-largest spirits group after Diageo and Pernod Ricard. Suntory's founder, Shinjiro Torii, initially did not make alcohol or tea but was a transporter of European red wine. In 1899, he started from an imported wine grocery store in Osaka, and the business was so poor that it almost closed down. It was not until the launch of Akadama Port Wine that he became popular. Later, he established the Yamazaki Distillery and launched beverage products such as oolong tea. Today, Suntory is a large group covering spirits, tea drinks, beverages, and coffee. According to financial reports, Suntory's revenue in 2021 was approximately 112 billion RMB, an increase of 8% from the previous year, with a profit of about 12.9 billion RMB. Among this, alcohol revenue was 41.8 billion RMB, and beverage and food revenue was 66.6 billion RMB. This seems to be the first time that beverage revenue exceeded alcohol revenue. The journey from a small grocery store to a world spirits giant must be full of twists and turns and stories. In terms of time span, Suntory, born at the end of the Meiji Restoration, experienced both World War II and Japan's major economic crisis in 1990. From Red Wine Transporter to Spirits Company 1. Great Brands Start with Losing Money Let's go back to 1899. In this year, Guangxu was the emperor, and Aisin Gioro Puyi had not yet been born. This was also the last year of more than 200 years of seclusion. In 1900, with the artillery fire of the Eight-Power Allied Forces, the door of the Qing government was reopened. At this time, Japan was in the late Meiji Restoration period, and the country advocated a Europeanized lifestyle. Shinjiro Torii keenly captured the business opportunity and opened his first small shop, "Kotobukiya," in Osaka, specializing in selling and producing Western-style wine. At this time, Shinjiro Torii was full of confidence and hoped to become rich overnight. With both national policy support and market demand, the business should not be too bad! But none of this happened. Shinjiro Torii's small shop business was a mess. The Japanese people were not interested in European red wine because they were used to drinking sake and did not like the sour and astringent European wines. Not to mention making money, Torii almost became a victim of the transition from feudal society to capitalism. 2. Authenticity Is Worthless in the Face of Good Taste Until one day, Torii suddenly realized that since people did not buy this sour wine, he might as well try making a sweeter wine. Since the business was about to go bankrupt anyway, he might as well break the old and establish the new. And this attempt took eight years! Torii launched a sweet-tasting wine called Akadama Port Wine. It was this product that helped Torii turn the tables and made him the CEO of the large company "Kotobukiya." By the mid-1920s, Akadama Port Wine had captured 60% of the Japanese wine market at that time. From this, we can see that Torii had great craftsmanship and could devote years to developing products. Secondly, any imported product must be adapted to local conditions. From Suntory's development history, the rise of all brands is inseparable from a super single product! It should be noted that a super single product is definitely not a simple internet-famous product. A super single product must be able to sell for a sufficiently long time and occupy a sufficiently high market share over a long period. In the stage from 0 to 1, you only need to grasp one of the most efficient ways and do it to the extreme to have a chance to break through. Torii used Akadama Port Wine, which was more suitable for Japanese people, to complete Suntory's first upgrade. This logic also laid the underlying methodology for the rise of Suntory's other super single products. Turning Imported Products into Top Three in the World After the success in red wine, Torii set his sights on whisky. So in 1923, Japan's first whisky distillery, Yamazaki Distillery, was born in Osaka Prefecture. At that time, Torii found Masataka Taketsuru, a "second-generation brewer" from a traditional Japanese sake family, to develop their own whisky together. Taketsuru is also known as the "Father of Japanese Whisky." Taketsuru was a rich second generation who could have inherited the family business, but because he was the third son, he was not qualified to inherit. In a fit of anger, he went to England to learn whisky brewing techniques. After returning, he met the dream-filled capitalist Shinjiro Torii, and the two hit it off: "Let's make the best whisky in Japan together!" This preparation took another five years! In 1928, with the efforts of capitalist Torii and product manager Taketsuru, Japan's first domestically produced whisky, Shirofuda, was officially launched. This whisky is still available today. It is very traditional Scottish style and not expensive. One would think that Torii should have used this bottle to make his career take off again, then the second curve would continue to grow, and the company's listing would be just around the corner. But history is surprisingly similar. This whisky not only failed to become a hit in Japan but also directly caused Torii and Taketsuru to completely break up. Shirofuda whisky, like the initial European red wine, had dismal sales. The Japanese people simply could not accept the so-called peaty flavor, which meant that the authentic and traditional Shirofuda had no market. So, authenticity is worthless in the face of good taste. Torii was a businessman, while Taketsuru was a product manager, an artist, and a master brewer. So Torii began to rethink the direction of the product. With the success of Akadama Port Wine, he believed that blindly emphasizing authenticity would lead to a dead end. We should create a whisky with Japanese style and localization. Taketsuru, on the other hand, believed that insisting on the most traditional taste was the right path. The two, whose philosophies were increasingly divergent, decisively parted ways. After the split, Taketsuru founded Yoichi Distillery, Japan's second-largest whisky distillery, in Hokkaido, which has a climate similar to Scotland, in 1934. After the failure of Shirofuda in the market, Torii took nearly ten years and, around 1937, launched a whisky more suitable for the Japanese public: Suntory Kakubin Whisky. With its affordable price, lighter and sweeter taste, and availability in convenience stores across Japan, Suntory's Kakubin Whisky achieved great success again. This whisky is still sold today and is a daily drink for many Japanese whisky enthusiasts. This time, Torii also had the right timing and place. The outbreak of World War II in 1939 put Japan into a state of total war. The government began to completely ban the import of foreign products, including Western whisky. For Torii, on the one hand, there were no domestic competitors; on the other hand, both the navy and army would purchase his whisky as designated military supplies. Like Nescafé coffee, with the flames of World War II, Suntory's Kakubin Whisky began to spread around the world. After World War II, around 1960, the 80-year-old Torii handed the company to his son Keizo Saji. It was from this time that the company was officially renamed Suntory. Under Keizo Saji's leadership, Suntory established two more distilleries, Hakushu and Chita. Later, the famous Yamazaki, Hakushu, and Hibiki were launched after Saji took over the company. 1. Mizunara Oak Casks Suntory's success in whisky, turning imported products into top three in the world and even acquiring the American classic whisky brand Jim Beam, is not only due to product positioning and channel success but also to the undeniable role of marketing. Here is the secret weapon of Japanese whisky: Mizunara oak casks. Compared to the peaty flavor of traditional Scotch whiskies aged in sherry casks, whisky aged in these casks is sweeter and more suitable for Asian tastes. It is said that whisky from these casks can have the sweetness of coconut and tropical fruits, as well as unique oriental aromas like aged wood and sandalwood. Because of the different wood, whiskies aged in sherry and bourbon casks are usually aged for 3 to 5 years, but Mizunara oak casks require a longer time. With its unique wood and aroma, Mizunara cask whisky has been labeled as "unique to the East." Chivas has also released a special edition aged in Mizunara casks, priced at just over 300 RMB on JD.com, so you can try it. As for which is better, sherry, Mizunara, or bourbon cask whisky, it is a matter of personal taste. But the price of consumer goods is never determined solely by the product itself, but by demand, social value, and other factors together. Because of the legendary background story of Mizunara casks, coupled with Japan's strict logging laws, Suntory, which basically monopolizes Mizunara oak, only makes about 100 casks a year. Scarcity makes things precious. With such rare raw materials, market prices naturally remain high. The price of a Mizunara cask is about 50 times that of a bourbon cask. Whisky aged in Mizunara casks naturally increases in value. So, Japanese whisky, like Moutai, is not just a drink. It is a brand value built by its unique cultural atmosphere and social value. As Keizo Saji famously said, "Rather than focusing too much on selling our products (alcohol), it is better to immerse the whole society in the culture of drinking our foreign spirits." Easy to Get Explosive Products, Hard to Find Super Single Products When it comes to oolong tea, what comes to mind first? Those who usually drink tea might think of Fujian or some mountain, but if you ask a young person, they will likely think of Suntory oolong tea. This fully proves the success of Suntory oolong tea. Especially in the Japanese market, Suntory has captured people's minds regarding oolong tea. However, the leader in Japan's tea industry is Ito En. Ito En's oolong tea was earlier than Suntory's and is also sold in the Chinese market. But its influence is far less than Suntory's oolong tea. Suntory's success is actually similar to Lipton's. Most people think Lipton's success is due to standardized products, etc. But Lipton relies not only on complete standardization and industrialization but also on product positioning, marketing, and channels. 1. Emphasizing the Concept of Raw Material Origin Suntory's oolong tea, unlike Torii's initial red wine, had almost no competitors. At this time, Suntory had a strong opponent, Ito En. Ito En was the pioneer of bottled oolong tea and green tea in Japan, earlier and more professional than Suntory. As early as 1979, Ito En cooperated with China National Native Produce and Animal By-Products Import and Export Corporation to start selling oolong tea in Japan and produced the world's first canned oolong tea product, entering the soft drink market. Ito En was indeed early, but just like Nongfu Spring's Oriental Leaf, which was almost the earliest unsweetened beverage, the problem was that Ito En did not emphasize that it was from China, and Nongfu Spring did not emphasize that it was sugar-free. 2. The Weakness Ito En Did Not Realize Became Suntory's Breakthrough Suntory positioned its product as authentic Chinese oolong tea and endlessly amplified this, continuously reinforcing that Suntory oolong tea is authentic oolong tea. In different advertisements and on bottle labels, it constantly emphasized that the tea leaves come from Fujian, China. Even the advertising slogan reflected Chinese characteristics: "Oolong tea, the emperor's proud tea." In brand strategy, it infinitely amplified the Chinese origin and continuously reinforced the concept that "the best oolong tea comes from China." First, Suntory found a breakthrough by emphasizing the origin of raw materials. Second, Suntory positioned the product as a healthy drink with "0 sugar, 0 calories, 0 fat," creating differentiation. Then, in advertisements, it continuously reinforced the perception that Suntory oolong tea comes from China and is authentic oolong tea. After entering the Chinese market, Suntory oolong tea did not choose to lay out the national market from the beginning. Instead, after solidifying product, channel, and brand aspects, it positioned itself as high-quality, targeting white-collar women, and began to gradually and comprehensively enter the Chinese market. Whether it was the early red wine, whisky, or the popular oolong tea, Suntory found a perfect balance between "imported products" and "localization." In terms of products, it gives people an authentic impression while also being more in line with local consumers' tastes. In marketing, it is also very good at telling its own brand story, capturing consumer psychology, amplifying its own characteristics, and establishing brand awareness in consumers' minds. Coupled with excellent product quality, it not only tells its story well but also makes consumers recognize its culture. Japanese brand marketing has always been quite magical. In addition to various silly advertisements, Japanese brands are very good at establishing a "faith" in consumers' minds. For example, in electronics, there is "Sony is great," "Canon and Nikon"; in the automotive industry, there is "Toyota that never breaks down"; and "Nintendo's Mario" and other brands exist like faith in consumers' minds. The consumer sectors of China and Japan have many similarities, and the underlying elements of retail business models are even more similar. The cultural commonality goes without saying. So, we often want to peek at the answers from Japan's development history! How Japanese brands develop in the domestic market and how they go global will surely give Chinese brands some inspiration. Source: Consumer Circle (ID: xiaofeijie316) Author: Xiao Yang -END-