Beverage benefits: New beer, whiskey and non-alcoholic drinks buoy revenue growth for Kirin in first quarter of 2024

02-Sep-2024 - Last updated on 02-Sep-2024 at 03:57 GMT

Kirin Group has seen benefits from its launch of a new beer brand as well as investments into functional beverage innovation and overseas whiskey expansion in Q1FY2024. ©Kirin

Related tags Kirin financial results

Japanese beverage major Kirin Group has seen its launch of a new beer brand as well as investments into functional beverage innovation and overseas whiskey expansion bear fruit in the first quarter of 2024.

Kirin recently announced its financial results for Q1FY2024, reporting an overall 11.4% year-on-year growth in revenue to JPY501.8bn (US$3.41bn) and a 120.2% year-on-year growth in profits before tax to JPY44.2bn (US$ (US$300.2mn).

The significant latter growth in profits was attributed to the absence of one-time costs related to foreign currency exchanges and its Myanmar business in 2023, hence was not considered to be due to performance and had no impact on 2024 profit forecasts.

However, Kirin Senior Executive Officer and Corporate Strategy Department GM Hiroaki Takaoka highlighted that many of Kirin’s beverage products have seen improved performance in the past quarter.

“First of all we saw a total of JPY13bn (US$88.3mn) increase in revenue for alcoholic beverages in this quarter – part of this was due to price revisions, but Kirin Brewery has also been seeing positive results from the investments we have been making for some time into our core brands in each category,” he told the floor during the firm’s investors meeting announcing the financial results.

“These are KIRIN ICHIBAN for the beer market, Honkirin for the Economy beer market, and Hyoketsu for the RTD market.

“In addition, the new brand ‘KIRIN Beer Harekaze’ has been very successful, and significantly exceeded estimates after it was launched on April 2 this year.

“We will continue to strengthen marketing investment in the second quarter and onwards to firmly establish the brand.”

Kirin Harekaze was Kirin’s first new beer brand in 17 years, and has a unique marketing point of using rare hops from the local Tohoku region and 100% malt to give the beer a richer, smoother taste with reduced bitterness, targeting younger consumers.

“We also successfully minimized cannibalism from our existing brands by [focusing on] a different demographic than KIRIN ICHIBAN fans,” he added.

“The consumer base for KIRIN Beer Harekaze differs from that for KIRIN ICHIBAN, with support from women and the younger generation.

“We believe that most of [this new business] is coming from other products, including other competing companies, and this is a positive factor for us - We intend to strengthen our investment to make KIRIN ICHIBAN and KIRIN Beer Harekaze our two flagship brands, and to strengthen the beer category in preparation for the unification of liquor taxes on beer in 2026.”

Whiskey and functional beverages

Takaoka also highlighted that the firm’s Fuji whiskey brand had exceeded expectations and seen year-on-year sales triple, whereas its core tea and functional drink brands had also seen steady growth.

“Our Japanese whiskey brand Fuji sales performed exceedingly well particularly in Europe and Japan,” he said.

“Whereas for non-alcoholic beverages, we saw a 6% year-on-year growth in the sales revenue of core brands, Kirin Gogo-noKocha and Kirin Nama-cha.

“This was in addition to our Health Science functional beverages which grew 32% year-on-year in revenue – in particular, products made using LC-Plasma grew 39%.”