Japanese bar izakaya drinking — © Nichika Yoshida

If the infamous collection of wasted salarymen spread out over Shibuya shared by @shibuyameltdown teaches us anything, it’s that Japan’s drinking culture is alive and kicking. Getting wasted at record speeds because you have to catch the last Chuo line at 00:15 am is more than a custom, it’s a subculture. In this editorial we explore the road to independence of Japan’s best selling alcoholic beverage, responsible for crowds of hammered salarymen: Beer, and how craft beer rises through the ranks.

Context of Japanese beer

It’s not Sake, neither is it Highball or Shochu. Despite its market share gradually declining, beer continues to hold the title of the best-selling alcohol type within Japan.
Since its introduction by European traders during the Edo period, when trade policies were highly restrictive, beer has undergone a fascinating evolution to become a distinctive domestic product. From day one it was a matter of replicating European beer making techniques as closely as possible, mainly because of an absence of know-how. The first breweries in Japan that are still in business today, were established during the Meiji period, and are producing the top three best-selling beers in Japan.

You might’ve guessed it:

Asahi - Super Dry
Kirin - Ichiban Shibori
Sapporo - Black Label

Craft beer or micro breweries had no chance competing against these Goliaths thanks to strict Japanese brewing licensing laws. A brewery had to produce at least 2 million liters of beer a year in order to be allowed to brew at all. Hard to picture, but that’s more liters than the NASA Kennedy Space Centre water system releases during a rocket launch. Can you imagine this amount of beer being produced by a 2-man brewery in an Osaka back alley basement? Luckily the limit got lifted in 1994, and ambitious artisanal brewers no longer had to stand at the sideline.

But Japan wouldn’t be Japan if it didn't replace one obnoxious law with another. Only did this one impact the future of Japan's beer industry massively, and it concerns malt. You can think of malt as the soul of your beer, making up an average of 80 to 90% of the grains used for production. Any beverage that contains less than 60% malt is not considered to be beer. Due to heavy taxation on beer with a malt level of 67% or higher, Japanese breweries were compelled to reduce their malt level to between 50 and 67% in order to avoid this tax trap.

The government experienced a significant loss in tax revenue and, in an attempt to corner breweries that avoid beer taxes by producing low malt level beer, simply increased the tax rate on products containing malt levels between 50 and 67% to match that of beer. In response, breweries began lowering their malt levels even further to avoid taxes, resulting in the creation of Happoushu, a new beer-like alcoholic beverage with a malt level under 50%. To the frustration of the government, this new genre gained massive popularity in Japan.

To give you an idea of how Happoushu dominates the market today, these are the best selling beer(like) products in Japan:

Super Dry Asahi
Kinmugi Suntory Happoushu
Style Free Asahi Happoushu
Nodogoshi Kirin Happoushu
Hon Kirin Kirin Happoushu
Clear Asahi Asahi Happoushu
Ichiban Shibori Kirin
Black Label Sapporo

Japanese beer delivery — © Antonio Prado

The emergence of craft beer

Once the licensing law was out of the way in 1994, Japan entered its beer renaissance era. Microbreweries started sprouting everywhere and formed the roots of Japan’s craft beer scene. We refer to craft beer as beer brewed in a place where craftsmanship holds a central position, a brewery that is independently owned, and produces smaller batches compared to the big players.

One of Japan’s most well known but equally unique craft beer breweries is located in the rural town of Konosu, Ibaraki prefecture, and goes by the name Kiuchi. Starting out as a sake & shochu brewery in the early 1800s, Kiuchi embraced beer crafting as soon as Japanese law enabled them. While they use traditional European beer-making technology, they often spice it up and take the avant-garde route. Think traditionally brewed beer, but matured in shochu casks. Their craft beer line, likely known by the enthusiasts among you, goes by the name Hitachino Nest Beer.

Hitachino nest beer — Hitachino Nest Beer

In terms of taking a stroll off the beaten path, Kiuchi brewery has proven itself to be a pioneer among craft beer producers in Japan. The major Japanese breweries like Kirin and Asahi were pressed by government tax regulation into producing what are basically watered down versions of beer hiding under the name Happoushu. So instead of striving to create a unique, high-quality Japanese beer that could stand on its own next to its European counterparts, the pressure from the government resulted in an inferior product (compared to beer anyway).

With fake beer leading the charge on sales of beer and beer-related products in Japan, major players in the industry have seen their economic position and influence grow. This shift in focus towards mass-production of Happōshu and traditional European knock-offs, may have come at the expense of experimentation and innovation in the field of high-quality beer variations.

Yet not all hope is lost. With Japan’s craft beer market growing slow but steady, the effort to create a distinctive beer culture is coming back.

Road to independence

The Japanese craft beer industry is basically taking its first small steps on a blank canvas. In Tokyo alone the appearance of bars like Mikkeller in Shibuya, Brussel Beer Project in Shinjuku, Beer Club Popeye in Ryogoku, and Omnipollos in Nihombashi, helps to introduce imported craft beers to a Japanese audience and often blend it with a curated offer of domestic brewed craft beers. Meanwhile, the amount of microbreweries and brewpubs in Japan nearly tripled in 10 years, with the count topping at 677 microbreweries in 2022. Compared to the American craft beer market, which started years earlier and accounts for 13% of the U.S. beer market, the Japanese craft beer market takes up about 2 breadcrumbs, or 2% of the total Japanese beer market.

Let’s be clear that there is no need to reinvent the wheel and go on a quest for atypical brewing techniques. There is a growing sentiment that Japanese breweries should move away from flawlessly copying European counterparts, like Asahi did with Japan’s best-selling beer "Super Dry" which is based on American lager, which in turn has roots in European pale lager. The goal here is to prioritize crafting beer with a distinctive taste and exceptional quality as the standard of measurement. In other words, we’re not talking about sashimi inspired pale ale, or udon broth IPA. We’re talking about authenticity.

Certain craft breweries are leading the charge towards Japan’s independence as a beer culture. One of them is hidden in Eastern Kyushu at the foot of Mount Mukabaki, called Hideji brewery. As a brewery that initially specialized in sake production, they had the advantage of being able to cultivate their own yeast in-house. Hideji takes quality seriously, to the point that some of their beers had to withstand a development phase of over two years before being approved for commercialization. Today, their product line includes a variety of craft beers such as Stout, Pale Ale, and Dark Lager, as well as various versions that feature seasonal local products like Hyuganatsu and Yuzu.

In addition to Hideji and Kuichi, there is naturally a variety of quality producers. Most of them in the form of obscure brewpubs you will only discover as a recommendation of the local bartender. Other noteworthy craft beer producers are Yo-Ho brewery in Nagano, Baird beer in Numazu (run by half Japanese, half American husband & wife team), Okhotsk Beer Factory in Hokkaido, and Atsugi beer exclusively brewed for Cooper Ales bar in Shimbashi.

The growth of craft beer in Japan has raised a key question for major Japanese breweries: how to connect with Japanese craft beer consumers. As the craft beer industry expands and nibbles away market share, it is clear that high-quality beer is becoming a bigger part of Japan's drinking culture. While the next steps for craft beer remain uncertain, the trend towards unique and innovative brews is undeniable. Major Japanese breweries will need to find ways to connect with this growing market of craft beer consumers if they want to stay competitive in the long run.