By Rocky Swift

TOKYO (Reuters) - Japanese drinks giant Suntory Inc last year debuted a strong, lemony brew in Australia that quickly became the top seller in the canned cocktail market there.

Now the company is aiming to replicate that success in North America, critical to its aim in becoming the global leader in the fastest growing alcoholic drinks segment.

Expanding overseas is also a matter of survival for Japanese drinks companies facing aging market at home and a shift away from alcohol among younger people.

"Australia is a very important test market for the global strategy," said Makoto Kitaura, a senior general manager at Suntory.

"If we have a success in Australia, then other Western countries like the U.S., the UK may have an interest to try a new brand. And we can see huge growth potential with the U.S. market."

The company tapped a localisation team to adapt its Japanese best seller Strong Zero for the Australian market: The lemony tang was tweaked, and the alcohol was dialled down from a hefty 9% to a more drinkable 6%.

It also branded the canned cocktail -196 Double Lemon in Australia, highlighting the extreme cold that Suntory claims it uses to extract flavours from fresh fruit.

"It sold out almost immediately after launching," said Alana House, the editor of Sydney-based Drink Digest.

The drink, price at about A$4.50 ($3.10) for an 11 oz can, had the advantage of being seen as a "cult" Japanese product, with a strong flavour profile and higher alcohol by volume (ABV) content, 6% versus 4.5% for a typical beer in the country, she added.

The global canned cocktail market, which Japanese beverage makers created some 40 years ago with drinks known locally as "chu-his", is now the fastest growing alcoholic drink segment, as pandemic restrictions prompted more people to imbibe at home and cut higher calorie drinks like beer.

The market, known in the industry as ready-to-drink (RTD), saw double-digit sales growth during the pandemic, and Suntory believes global canned cocktail sales will double again from 2020 levels to more than $60 billion in 2030.

TOUGH U.S. MARKET

The next and most important hurdle in Suntory's worldwide ambition is tackling the massive U.S. market. The company already has a foothold following its 2014 takeover of Beam Inc, maker of Jim Beam whiskey. The company stood up a global canned cocktail division in March and its American-based team came to Tokyo in June to collaborate on strategy.
Source: Investing.com

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