JAPAN – Asahi Group, a Japanese global food and beverage giant, plans to introduce price hikes in Japan starting October 1 for beer-type beverages, RTD, other keg liquors, non-alcoholic beverages, and domestic whiskeys.
The company noted that the price increase is expected to be in the range of 6% to 10%; as well as for soft drinks which are expected to see 4% to 16% increases.
This would be the first time that Asahi raises its prices in 14 years in Japan, but has made no promises that the increases will be a one-time thing for both Japan and Europe where the company has already hiked prices. has had a price hike in Europe which bolstered its profits.
In Asahi’s H1FY2022, the company had revenue and profit growth in Europe which were strongly bolstered by the increments resulting to (22.8% to JPY265.2bn / US$1.94bn and 10.5% to JPY28.9bn / US$211.7mn respectively) were its healthiest amongst all of its major markets.
Overall, Asahi reported an increase of 11.4% year-on-year in revenue to hit JPY1.15tn (US$8.42bn) and a 1.9% increase in profit to hit JPY91bn (US$666mn).
Asahi CEO and Representative Director Atsushi Katsuki said: “In Europe, we have increased unit prices by improving our various mix including on-premise recovery, and by raising prices – but the issue is that we still need to continue responding to higher-than-expected commodity, energy, and other market price increases.”
Industry analysis experts Fitch Group noted that in previous years, Japanese brewers have seen a downtrading in beer preference for no or low malt beers that have benefitted from a lower tax regime, although new regulations aim to equalize regular beer with no/low-malt alternatives.
Due to concerns over how the upcoming price hikes will affect its market performance, especially in Japan, Asahi has highlighted that it will be focusing on multiple strategies to accelerate its growth locally.
Katsuki said canned beer is one of the businesses that the company is running initiatives to strengthen, especially the Asahi Super Dry brand.
He explained that one of the reasons Asahi is so positive about canned beer is because of its sales which have been growing faster than the market as a whole over the past six months.
With market growth at slightly below 10% from January to June 2022, Asahi sales have been growing steadily, particularly Asahi Super Dry canned beer, which has grown at 9% while the canned category has had a growth of 26% in Japan and 8% in Australia.
Another area the company plans to focus on is healthier product innovation, particularly sugar-free drinks.
Here Katsuki said the Japanese company has multiple innovations including the Wilkinson Spicy Lemon Ginger sparkling water marketed as a sober curious item, and its Wakocha bottled tea made from 100% Japanese tea leaves.
The company will also expand its range of label-less products, a category that has increased by 87% since its inception, especially via e-commerce channels where such products have grown by 32%.
Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro-industry. SUBSCRIBE HERE.
