Japan is an established wine market, the sixth-largest importer worldwide and second largest in Asia. Domestically, both consumer expenditure and salaries have risen since 2017, while the Japan-EU Economic Partnership Agreement that came into effect in February lowers the cost of European imports. Furthermore, strong demand continues for organic, sparkling and high-end still wines. However, following a decade of growth the market overall has stalled in the past two years and per capita consumption remains low at 3 litres. A long-term concern is the ageing population, with more than half of wine drinkers aged over 55, while younger generations are drinking less or turning to alternatives such as ready to drink (RTD) beverages. In October, the government plans to raise the consumption tax from 8% to 10%, which will dent consumer confidence. Within this context, retail and on-premises buyers are working hard to offer value for money and stimulate demand.
Fine wine retail
Enoteca is Japan’s leading fine wine retailer with more than 60 outlets including directly managed stores and specialty wine corners within department stores. It also operates wholesale and online divisions. Executive officer Koichi Kaino runs a central team of 15 buyers incorporated within the marketing and merchandising division. Kaino joined Enoteca ten years ago and is the decision maker for purchasing. He notes that with more than 30 years’ history, Enoteca has a balanced portfolio that includes brands such as Louis Roederer, Baron Philippe de Rothschild, Antinori, Torres and Montes. New brands undergo a strict selection process, facilitated by Kaino, to secure board approval. Enoteca’s strategy is to work closely with producers to build their brands. As such it eschews short-term trends, preferring to work with leading wineries from major regions. The buying team travels extensively to overseas fairs such as Vinexpo, ProWein and Vinitaly, not simply to look for new brands but for market research and to meet with wineries that the company already represents. In 2018 total sales were ¥256 oku ($234m), up 9% on 2017.
Takashimaya, founded in 1831 in Kyoto, is a luxury department store with a network of 17 stores. Osamu Suzuki is the buyer for wine and spirits in the merchandising headquarters division. He has held this position for ten years following a varied career with Takashimaya including spells in the USA and Singapore. Suzuki buys core brands for Takashimaya and depending on the size and location of the store, 30-40% of wines come from his selections. A cornerstone of the portfolio is Domaine Leroy, which Takashimaya has imported since 1972. Other key suppliers include Champagne Thiénot and Kressmann, with which Takashimaya has long relationships. Recent additions include Spanish producers Recaredo and Mas Martinet. There are also plans to expand the number of Japanese wines in anticipation of the 2020 Olympics. Suzuki travels overseas twice a year to meet existing suppliers. He also visits other regions and wineries when planning promotions. Gift giving remains important and Suzuki selects wines for Takashimaya’s Christmas and summer offerings.
Meidi-ya is a high-end grocery store chain, founded in Yokohama in 1885; 11of its 33 stores are licensed to sell wine. Meidi-ya pioneered direct imports of wine and food in Japan. In 1888 it received the imperial warrant as a wine supplier. Meidi-ya has worked with Bordeaux-based négociant J.J. Mortier for more than a century and in 1989 bought the company. Atsuya Hattori, general manager of the marketing division, has spent his 30 year career at Meidi-ya with the wine and spirits group and now heads the team of buyers. He studies the market continuously and travels regularly to overseas fairs. One-third of the portfolio is French with the remainder split between Europe and the New World. Core brands include Juvé y Camps and Faustino from Spain, Wente from California and Wakefield from Clare Valley. Hattori notes that while trends continuously evolve there is a move to lighter, unoaked styles of white wine. Despite the recent hiatus, Hattori is optimistic about long-term prospects for the market in Japan.
Pieroth Japan celebrates its 50th anniversary in 2019. Nationwide, 350 staff conduct direct sales to a base of 160,000 clients. It also operates a chain of ten World Wine Bars. Kevin Whelehan is senior marketing manager and buyer responsible for new product selection. A long-term resident of Japan, he has worked at Pieroth since 1991. While holding an international portfolio, recent promotions feature Ornellaia, Bulgari and châteaux Rauzan-Ségla and Canon. Further afield, Whelehan notes significant growth in Californian sales and Pieroth lays claim to being one of the largest importers of Opus. Whelehan is positive about prospects for further growth from California, which he attributes to consistent quality, pricing and ratings across vintages. An additional advantage is that Pieroth works with many producers, such as Buccella, on an exclusive basis. Pieroth’s sales in 2017 totalled ¥100 oku.
Cordon Vert is the buying and import arm for both supermarket group AEON and wine retailer Yamaya. French national Claude James, who has lived in Japan for 21 years, is the purchasing manager at Cordon Vert. Initially working for Yamaya, he moved to Carrefour Japan and then Cordon Vert when it was established in 2006. His team coordinates offers from suppliers and requests from the buyers at AEON and Yamaya. James reports that 70% of wines on the shelves at AEON and 90% of those at Yamaya are imported by Cordon Vert. Key brands include Banrock Station from Australia and Ruffino from Italy.
Major chains
AEON is Japan’s largest supermarket group with 2,000 locations operating under the AEON and MaxValu brands. Eighty per cent of wines sold at AEON are priced below ¥1,000 ($9.16), as they are in other supermarkets and convenience stores. James notes that while Chile is a key supplier for value wines, following the Japan-EU agreement, there is now a switch to sourcing more from Europe. AEON is also increasing its organic range, hoping to become a leader in the field. Yamaya is a leading liquor retailer with more than 300 shops. In addition, Yamaya owns several restaurant chains, including the popular Hana no mai, with a total of almost 1,000 outlets. Cordon Vert supplies these chains mostly with entry-level Chilean wines but also with high-end Argentinian and Californian options.
Japan is home to numerous casual restaurant chains as well as many of the world’s finest restaurants. It boasts more Michelin stars than any other country. HUGE, established in 2005, is a restaurant group that successfully bridges the gap between these two extremes with a focus on both food and wine quality. It has 23 restaurants. Eleven are under the name Rigoletto, each designed with modish interiors, prominently featured cellars and serving casual Italian and Spanish dishes. There is also Dazzle for fine Italian dining and others serving Mexican, Spanish and Asian food. Wine selections are made by corporate sommelier Hiroshi Ishida and buyer Tetsuya Hashimoto. Ishida is one of Japan’s top sommeliers and since joining HUGE in 2017 has centralised wine buying for the group. Each Rigoletto has more than 100 seats and features the same list with more than 100 labels, many from the New World. There is a separate well-curated section of 30 wines all competitively priced at ¥2,750. These are broadly chosen with the criteria of being smaller boutique wineries, organic, with consistent quality and exclusive to HUGE. In 2018 HUGE ordered more than 260,000 bottles across the group.
Restaurant group AuxAmis World, founded in 1997 by Hiroto Maruyama, has 11 restaurants in Tokyo known for their emphasis on French wines. Sommelier Tatsuya Iida has worked at AuxAmis for 12 years. Each restaurant has a degree of autonomy in proposing by the glass options, and bottles priced up to ¥12,000 although Iida and Maruyama make the final decision. Iida ensures that lists maintain balance in terms of pricing, regions and styles, be they classic, modern or natural. The 40,000-bottle cellar features a sizeable number of older vintages, including Burgundy rarities from Domaine de la Romanée Conti and Jacky Truchot. Philippe Pacalet from Burgundy and Jean Foillard from Beaujolais are constant features on the lists. Iida notes, however, that depending on venue, spending per bottle ranges from ¥5,000 to ¥15,000. While most buying is through local importers, staff from AuxAmis travel to France to visit producers in person each year.
Leading buyers in Japan are experienced, well travelled and pragmatic. While cognisant of trends in the market they also value long-term relationships, with many of their links maintained over decades. At the same time, the Japanese market has reached a level of maturity where buyers actively search beyond classic Old World regions. This offers opportunities for less well-known regions. For wineries wanting to enter the Japanese market, it may seem a difficult one to break into. However, once established, the relationship will show dividends over the long term.
