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[TOKYO] Brewery executive Kosuke Kuji brought his best sake to a New York booze showcase 16 years ago hoping to promote high-end Japanese rice wine to a new generation of sophisticated foreign drinkers. They were a little disappointed.
It wasn't that sake from his Nanbu-Bijin brewery failed to live up to its rating back home as Junmai-Daiginjo, the name given to premium grade vintages. But for aficionados of traditional grape-based wines, the local appellation that produces the main ingredient can be almost as important as the final product - think Napa Valley in California, Bordeaux in France, or Chianti in Italy.
Back in 2001, most of the rice used in Nanbu-Bijin sake came from the prefecture of Hyogo. That's 1,000 km south of where the beverage was made in Iwate, on the northern tip of Japan's main island of Honshu. So when a sommelier at the New York event learned from Mr Kuji where the ingredients came from, the American wine expert seemed let down that the sake wasn't a more artisanal product.
"He wanted sake made from locally grown rice, just as he likes wine out of its vineyard," Mr Kuji, the 45-year-old president of Nanbu-Bijin, said in an interview at his brewery in Ninohe City.
For Mr Kuji, the experience showed the importance of what's known in the wine-making world as terroir. It's a word that the industry uses as a mark of unique regional characteristics and farming practices. The designation also can enhance the value and the appeal of different vintages.
After he got home to Japan, Mr Kuji began a collaboration with farmers in Iwate to develop and produce a rice variety exclusively for the family-run brewery. Now, about a third of Nanbu-Bijin sake is made from local grain - just in time for a surge in Japanese exports that is helping to offset a drop in domestic consumption.
Last year, Nanbu-Bijin generated about 100 million yen (S$1.22 million) in foreign sales, or 15 per cent of the brewer's total revenue. That's up from zero two decades ago, and Kuji says he's targeting 30 per cent of sales in five years.
"In overseas markets, consumers who love to drink wine also show interest in tasting sake," Kuji said.
Sake is becoming more appealing to wine fans outside of Japan, Mr Kuji said. But to keep winning converts, the industry needs to adopt the terminology and promotional techniques of traditional vintners, he said. One example would be developing pairings with specific foods, kind of like how wine makers pitch reds with meat and whites with fish.
"When I drink a glass of sake, I can think of the best French food to have with it," said Olivier Huet, a 45-year-old Frenchman who was qualified as a sake sommelier in 2015 by Sake Service Institute in Tokyo. "As Europeans love to have sushi and white wine, they should want to try sake with cheese." Finding Match Kuji isn't alone. Brewers across Japan are looking to boost foreign sales and are shifting the way they make and sell sake, particularly in the northeast region known as Tohoku, the largest rice-growing region and a major sake producer.
The Agriculture Ministry began a "Tohoku Sake Terroir Project" that matches brewers and farmers to develop new products. The program is intended to help revitalize a region hit hard by the record earthquake and tsunami that caused a meltdown at the Fukushima nuclear plant in 2011.
Domestic consumption of rice and sake has been declining as Japan's population ages and the number of people in the country shrinks. Consumers also are eating more Western foods. To support domestic farmers, the government set a target in 2013 of more than quadrupling exports of rice and rice-based products to 60 billion yen by 2020.
In the 12 months through March 2016, sake consumption in Japan was 556 million liters, down 67 percent from a peak in 1976 of 1.68 billion liters, according to the National Tax Agency. Rice demand is down 37 per cent at 8.41 million tons, compared with the peak in 1963, according to the Agriculture Ministry.
Sake exports expanded 156 per cent to a record 15.6 billion yen in 2016 from 6.1 billion yen a decade earlier, government data show. The US was the largest importer last year at 5.2 billion yen, followed by Hong Kong and South Korea. In the same period, rice exports rose to 2.7 billion yen from 1.2 billion yen.
Shipments of alcohol could keep growing after Japan and the European Union agreed this month to eliminate tariffs on imports of sake and wine in bilateral trade talks. Japan imposes a 15 per cent, or 125 yen-per-liter, tax on wine imports, while the EU levy on sake is a maximum 7.7 euro-per-100 liters.
While exports in 2016 rose to a record for a seventh straight year, foreign sales of sake remain a small portion of total demand. This year, sales in Japan will be 516.3 million liters, according to data from researcher Euromonitor International. The global wine market is 55 times larger.
In an attempt to narrow the gap, sake brewers are developing alternative drinks, including a sparkling wine called Awasake. Mr Kuji and eight other brewers established the Japan Awasake Association in November to promote the bubbly concoction. The group also set strict quality standards, including the use of only Japanese rice.
At the world's biggest sake competition in Tokyo last month, Nanbu-Bijin's Awasake was voted the best sparkling drink among 1,730 bottles, including 22 made by overseas brewers.
"As a drink for toasts, sake lagged behind wine and beer for a long time," said Yuzo Kuji, Nanbu-Bijin's managing director. "We have finally succeeded in developing the product that can be substituted for them." Rising sake exports are a potential lifesaver to Japanese rice farmers. The government will end state control of rice production at the end of this fiscal year. The change could mean too much supply and lower prices, so growers need more outlets to sell, said Ryoichi Itsukaichi, a 60-year-old farmer in Ninohe.
"We can sell sake-rice at prices more than 10 per cent higher than ordinary food varieties," said Itsukaichi, who heads the group of farmers who supply Nanbu-Bijin with the Ginotome rice they grow on 11-hectare paddies. "We are lucky. We can grow rice for award-winning sake."