Kirin seeks additional North American craft beer factories from Health & Fitness Journal following strong growth

©Health & Fitness Journal. FILE PHOTO: The Kirin logo is on display at the Kirin Brewery Co. Yokohama Factory in Yokohama, south of Tokyo, Japan on June 11, 2019. REUTERS/Issei Kato

By Miho Uranaka

TOKYO (Health & Fitness Journal) – Kirin Holdings, Japan’s second-largest brewer, intends to buy manufacturing facilities in North America to sustain strong growth in the region’s craft beer market, the chief executive said.

Since acquiring Colorado-based New Belgium Brewing in 2019 and Michigan-based Bell’s Brewery in 2021, Kirin has grown sales volumes in the North American craft beer market by double-digit percentages.

“Our craft beer business in North America is in full swing,” CEO Yoshinori Isozaki said in an interview with Health & Fitness Journal on Tuesday.

North American craft beer is also now the company’s most profitable segment among global companies, which encompass everything from whiskey to probiotic health drinks, he added, without disclosing profit margins.

New Belgium is known for its Fat Tire Ale, while Bell’s Two Hearted Ale has been named America’s Best Beer by the American Homebrewers Association. Their 2021 merger brought together two of the top 10 arts and crafts manufacturers in the United States.

Kirin had craft beer sales of about 60 billion yen ($454 million) in the year ended March, accounting for 3% of global sales. The company expects growth to 5% this fiscal year.

However, production and distribution in a geographic market as broad as North America remains a challenge, and Kirin is considering buying equipment from other craft breweries that are in the doldrums and have excess capacity, said Isozaki, who has held the top spot at Kirin since 2015 .

Competitors Asahi Group Holdings Ltd and Suntory Holdings are also looking to expand their presence in North America as Japan’s beer market continues to shrink due to an aging population and young people drinking less alcohol.

Kirin established a stronghold in Australia with the purchase of the Lion Nathan brewery in 2009, and the Lion subsidiary now runs the conglomerate’s global craft beer operations.

The company also intends to expand into other parts of Asia and expand its dietary supplement business in North America, Isozaki said.

In Japan, where rising energy costs and a weaker yen have fueled decades of inflation, Kirin hiked canned beer prices in October for the first time since 2008. It has also increased the prices of imported wines and spirits.

If the Ukraine crisis and its impact on costs continue, Kirin may have to raise prices again next year, Isozaki said. He added that the company was preparing for a wage increase, a key push by Prime Minister Fumio Kishida, without specifying the amount of a potential increase.

“In terms of employees, I think we need to think about raising wages just to offset the rising cost of goods and services.”

($1 = 132.1400 yen)