Suntory Osaka Factory Revamped with 6.5 Billion Yen Investment: Tackling the "Youth's Departure from Alcohol" with the Global Strategy of Japanese Gin 'ROKU'

Table of Contents

1. Introduction: "Decline in Alcohol Consumption" and the Craft Gin Boom

2. Suntory's Oldest Osaka Factory

3. Breakdown of the 6.5 Billion Yen Investment and Renovation Points

4. 'ROKU' Aiming for "World's Best" and Brand Assets

5. Domestic Gin 'SUI' and Strategy for Younger Generations

6. Growth Trajectory and Competitive Environment of the Global Gin Market

7. Experiential Marketing and Inbound Demand

8. Sustainability, ESG, and "Gin Tourism"

9. Potential and Challenges Discussed by Experts and Bar Masters

10. Roadmap and KPIs for the Next 5 Years

11. Risk Scenarios and Countermeasures

12. Conclusion: Can "Japanese Gin" Follow in the Footsteps of Whisky?

1. Introduction: "Decline in Alcohol Consumption" and the Craft Gin Boom

Japan's per capita alcohol consumption has decreased by 25% from 101.8L in 1992 to 75.4L in 2024, with the drinking rate among those aged 18-29 halving in the past decade.noteForbes JAPAN
On the other hand, the global gin market is projected to grow by an average of 7.7% annually from 2024 to 2029, expanding by approximately 7.8 billion dollars.Technavio
This "gap" is the greatest opportunity Suntory is tackling.

2. Suntory's Oldest Osaka Factory

Completed in 1936, the Osaka Factory (Shimamoto Town, Osaka Prefecture) is where Japan's first domestic whisky was produced and is now a core site for gin and liqueur. Before COVID-19, it attracted about 100,000 visitors annually. After renovations, it will reopen as the "House of Japanese Gin" with interactive exhibits and a bar.SuntorySuntory Holdings | Living with Water SUNTORY

3. Breakdown of the 6.5 Billion Yen Investment and Renovation Points

The investment effects are consolidated into ① improved yield of high-value-added products, ② tourism revenue, and ③ expanded brand recognition.theginguild.comthedrinksbusiness.com

4. 'ROKU' Aiming for "World's Best" and Brand Assets

• Ranked 3rd in Global Premium Gin Sales (IWSR 2023)

• Sold in over 60 countries, with about 90% of sales overseas

• Differentiation factors include 6 Japanese ingredients + 8 traditional botanicals
  
  While inheriting the "Japanese = Quality" image that succeeded with whisky "Yamazaki," it strengthens cocktail offerings at high-end bars in Singapore, NY, and London.Suntory Holdings | Living with Water SUNTORYShanken News Daily
  Aiming for a 10% global share by 2029—the key lies in storytelling through "Japanese production, not local distillation."

5. Domestic Gin 'SUI' and Strategy for Younger Generations

Expanding the "meal accompaniment" appeal cultivated in the RTD market to SUI gin soda. Proposals to replace highballs in izakayas and zero-waste cocktail videos on TikTok have been successful, with domestic sales in 2024 surging 134% year-on-year.Suntory Holdings | Living with Water SUNTORY

For young people with a preference for low-alcohol drinks, a 0.5% "Non-Alcohol ROKU & Tonic" is offered as an entry point, aiming for gradual brand fan conversion.

6. Growth Trajectory and Competitive Environment of the Global Gin Market

• Market size in 2024: $14.3 billion → $21.1 billion in 2029 (CAGR 4.0-7.7%)Mordor IntelligenceTechnavio

• UK's Diageo "Tanqueray" and Pernod Ricard's "Beefeater" remain at the top.

• In Asia, the Philippines' Ginebra San Miguel ranks first in liters globally.
  Suntory targets the niche of "premium segment × Asian and European cities" to secure price differential benefits.

7. Experiential Marketing and Inbound Demand

The new facility plans to offer aroma experiences in the "Sakura Fragrant Distillation Room" and seasonal cocktails at the tea room bar "Rokkan." It is estimated that the average distillery stay time for visiting tourists is twice that of whisky, with a target of 250,000 annual visitors by 2030.Bloomberg.comBloomberg.com

8. Sustainability, ESG, and "Gin Tourism"

A circular model is being built by reusing botanical residues as fertilizer and in craft cosmetics, and using distillation waste heat to grow herbs in adjacent greenhouses. The renewable energy ratio will increase from 15% before renovation to 45%. Achieving ESG goals will reduce the risk of EU import regulations.

9. Potential and Challenges Discussed by Experts and Bar Masters

• Shingo Gokan, Bar High Five"Roku is one of the few gins that can speak to 'Wa' (Japanese style). If they release different maturations, they can compete with Scottish players."
  
  

• Aya Kobayashi, Chief Analyst, Mintel Japan"Younger generations find value in 'craft experiences.' Stories resonate more than alcohol content."Mintel
  The challenge lies in addressing the preparation period and seasonal fluctuations in botanical supply.

10. Roadmap and KPIs for the Next 5 Years

11. Risk Scenarios and Countermeasures

• High Yen Exchange Rate: Local Currency Hedging/Price Maintenance Strategies

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