Yoshida Kayo, the fifth-generation owner of Umenoyado Sake Brewery, is also focusing on marketing strategies, such as product development for BtoC and expanding sales channels.
Umenoyado Sake Brewery (Katsuragi City, Nara Prefecture), which boasts a history of 130 years, has been transforming from a family business to a corporation by creating a comfortable working environment since the appointment of fifth-generation president Yoshida Kayo (45). Since then, the COVID-19 pandemic has prompted the brewery to draw up a bold growth strategy, including launching a B2C business through an e-commerce site and transforming the brewery into an experience-based facility with an awareness of inbound demand. In the second part, we take a look behind the scenes at the sales and marketing strategy implemented by Yoshida, and the formulation of the purpose and mission that formed the basis of that strategy.
Overseas business supports the company during the COVID-19 pandemic
Umenoyado Sake Brewery, whose original business was sake brewing, began producing plum wine during the time of Yoshida’s father, Akatsuki, the fourth-generation brewer, and actively developed new products such as “Aragoshi Umeshu” (see Part 1).
[Part 1] Sake brewing also goes from top-down to teamwork: The fifth-generation brewer at Umenoyado Sake Brewery changes the passive culture
Although the company’s performance had been steadily improving, the spread of COVID-19 in 2020 caused a sharp drop in demand from the food and beverage industry. The company’s sales for the fiscal year ending June 2020 also fell to 83% compared to the same period last year.
However, compared to other sake breweries, the drop was relatively gentle, and even in April 2020, when the first state of emergency was declared, the company was able to secure a profit in a single month.
This was because overseas sales remained almost the same as before COVID-19, providing support. Unlike Japan, overseas, especially in the Western market, demand for alcoholic beverages, which is mainly for households, did not fall much. In both the fiscal year ending June 2021 and the following fiscal year ending June 2022, Umenoyado Shuzo’s overseas sales ratio exceeded 40%.
In addition to the fact that exports involve larger order lots than Japanese liquor stores and other such outlets, which generate consolidated sales, the fact that large-scale transactions mean that shipping and sales costs are efficient and profit margins are high was also a factor in ensuring a profit.
Exports began in 2002 from the United States. Akatsuki, whose hobby was traveling abroad, took on the business and has continued to actively increase export destinations ever since, and now exports a diverse lineup of products, including sake and plum wine, to a total of 25 countries and regions. In the fiscal year ending June 2023, when domestic demand recovered, overseas sales returned to about 30% of total sales, but overseas business is another strength of Umenoyado Shuzo.
Calling for a change in the business model
Since the company had somehow managed to secure profits even during the COVID-19 pandemic, there was a certain sense of relief within the company at the time. However, President Yoshida feels a sense of crisis.
“The entire sake brewing and sales industry was in a precarious state, but only our company was relaxed, thinking that ‘we can manage somehow.’ I thought that if we didn’t take on a big challenge now, we wouldn’t survive if COVID-19 dragged on or another crisis occurred.”
Yoshida believes that the reason employees were hesitant to take on a big challenge was because of a strong trend that was deeply rooted in the sake industry at the time. This was that the rarity of a sake, like a “phantom sake,” was its value as a product, and that it was considered good to deliver it to core fans through limited sales channels rather than producing large quantities. And it seems that there were still many employees who were influenced by this trend.
Yoshida, who had been feeling uneasy for a long time, one day decided, “First of all, I have to make up my mind and lead the entire company.”
At various occasions, including company-wide morning meetings, he stressed that the company should not rely solely on the business model that it has been accustomed to for many years, and called on employees to “take on challenges that have previously been too difficult to overcome.”
Sales channels changed from authorized dealers to mass retailers
After much discussion within the company, one of the things they worked on was developing new sales channels.
Until then, they had limited their shipping destinations to “authorized dealers,” which were mainly small and medium-sized liquor stores, but they decided to sell to major mass retailers and supermarkets that operate nationwide. Even before COVID-19, some of these major companies had approached them asking to sell their products, but they had declined out of consideration for the authorized dealers.
To develop sales channels, they collected business cards from the major company representatives who remained in the company and introduced a new cloud-based business card management service to upload and register them. They linked it to another cloud-based customer management system to create a database, and divided up sales destinations to efficiently develop the products, gradually increasing the volume of shipments.
As a result of these efforts, Umenoyado Shuzo’s products are now sold in over 350 stores of mass retailer chains that operate nationwide, mainly the popular “Aragoshi” series.
It has also contributed greatly to the recovery of sales, with sales of the Aragoshi series alone through major mass retailers reaching approximately 100 million yen in 2023. Umenoyado Shuzo’s sales for the fiscal year ending June 2023 are set to exceed those for the fiscal year ending June 2019, before the COVID-19 pandemic.
Development of products exclusive to the EC site
In addition to the so-called BtoB business through major mass retailers and small and medium-sized liquor stores, the company has also fully embarked on a BtoC business of selling alcohol directly to consumers. This was also a measure that the company had not actively promoted before COVID-19, out of consideration for its authorized dealers.
First, the EC site was significantly renewed in 2022, and then the company began developing EC-exclusive products. For this reason, Yoshida has hired specialized personnel with knowledge of EC and marketing.
In developing the product, the company was conscious of the spread of the product through social media and aimed to create a product that would “excite users and make them want to talk about it to someone.”
This is how “PARLOR Aragoshi Otona no kaniku no Numa ‘Strawberry” (PARLOR Aragoshi Fresh pulp swamp for adult, Strawberry) was born.
The concept of this product is “super freedom,” which can be enjoyed not only as a liqueur, but also on roast beef and shaved ice. The product name and bottle design were also proposed by an advertising agency, and the product was renewed to be more sophisticated.
Shortly after its release in July 2022, a post by a Twitter (now X) user went viral on social media with the comment, “I found a strawberry liqueur with an incredible name!”, and the post garnered about 50,000 likes despite the lack of advertising.
In exchange for increasing freshness, this product has a short shelf life and is produced in limited quantities, so for about half a year after its release, it would sell out within minutes of going on sale on the e-commerce site. After that, the company put in place a mass production system and has since moved away from the situation of “selling out immediately after release.”
In 2023, we launched a new product “Super Aragoshi Almost Orange” based on the concept of “chewing liqueur”. Umenoyado Sake Brewery’s sales via the EC site reached approximately 200 million yen in the fiscal year ending June 2023.
“Experience-based brewery” with inbound tourism in mind
The former head office and brewery (factory) became too small, so in 2022 we moved to a vast site in the same Katsuragi City. In addition to opening a new direct sales store, we transformed the facility into an “experience-based brewery” that attracts tourists, where you can see the sake brewing process, make plum syrup, and participate in workshops.
Around this time, tourists from overseas, which had stopped due to the COVID-19 pandemic, were gradually returning. We secured parking space that can accommodate three large tourist buses so that foreign consumers who learned about Umenoyado Sake Brewery’s sake in export destinations can easily visit via Kansai Airport.
The company’s BtoC business marketing activities were highly praised, and in May 2023, Umenoyado Sake Brewery received an Encouragement Award at the Japan Marketing Awards (sponsored by the Japan Marketing Association, a public interest incorporated association).
With the mission of “exciting the world”
At this time, Umenoyado Sake Brewery formulated its mission, values, and purpose (MVP). When taking on new initiatives such as the toC business, we are always conscious of returning to the MVP.
The brand concept was originally created as “a brewery that creates a new sake culture” to coincide with the 120th anniversary ceremony in 2013, when Yoshida-san’s appointment as president was announced.
To protect the pride of being a sake brewery and create new products based on a new brewing culture such as liqueurs. This is the enthusiasm that is embodied in it.
However, even after nearly 10 years, there was a sense of challenge that it had not been translated into concrete business strategies and measures.
So, after discussing it mainly with the executives, in January 2022, we formulated the mission of “exciting the world with surprise and emotion” and the vision of “our challenge will create a new standard for the world.”
“We took the time to talk about our dreams over drinks at night, during our annual department manager retreat, and verbalized what Umenoyado should be, what our ideal form should be.”
The mission also led to the keyword “#Wakuwakunokura” (Exciting Brewery), which was introduced when the “Super Aragoshi” series was launched.
In January 2023, the brand concept was changed to the corporate purpose of “creating a new sake culture.”
The purpose and mission are read out by the person in charge in turns at the first morning meeting of the month, to ensure that they are understood.
“By verbalizing and deciding on the MVP while discussing it internally, we were able to share a common understanding of the questions, ‘Why are we working on this and where are we heading?’ when moving forward with BtoC business. I feel that the MVP has now become the standard for each employee’s decisions and actions.”
Aiming to grow both sake and overseas businesses
Umenoyado Sake Brewery is planning new initiatives in the sake business, which is its original business. Although details cannot be disclosed yet, the aim is to clearly separate the sales strategy and market from liqueurs and increase the added value of sake.
Although the ratio of sake sales to total sales has fallen to less than 10% of the total, Yoshida still answers “we are a sake brewery” when asked about the company.
“Sake is the original business and the core of Umenoyado Sake Brewery. Plum wine and other liqueurs are also a business that exists because of sake. We want to change with the new era while protecting our core.”
Of course, we will continue to try new products such as the “Super Aragoshi” series and new genres of sake that are not limited to liqueurs. We also plan to focus on overseas business.
Yoshida has an eldest son and daughter who are in elementary school, but she says she has never told them to take over the business.
“They may want to take over in the future, but just like my father, I will only think of them as potential successors. Whoever it is, I believe that a talented person will eventually emerge to develop Umenoyado Shuzo, and I believe that one of my important roles will be to train that person and pass the baton to them.”
