Targeting the U.S. Market with Spirits Expertise
Suntory Holdings, the Japanese beverage giant, is setting its sights on becoming the global leader in the ready-to-drink (RTD) market by 2030. While the company is known for its whisky, it sees significant growth potential in the canned cocktail segment, particularly in the United States.
Suntory currently holds the second position in the global RTD market, largely due to its dominance in Japan. However, it trails behind Mark Anthony Group, the maker of White Claw alcoholic seltzers, primarily because of its limited presence in the U.S. market.
To address this, Suntory is focusing on spirits-based canned RTDs and cocktails in the U.S. Its Minus 196 brand, with a 6% alcohol content, has proven successful in Australia and has recently entered the U.S., UK, and German markets. This contrasts with the company's Strong Zero brand, popular in Japan for two decades, which boasts a 9% alcohol content.
While Suntory has no immediate plans to alter the Strong Zero formula, it acknowledges the growing consumer preference for lower alcohol and lower sugar beverages. The company is actively developing new products that cater to this trend.
Suntory's global expansion faces challenges, including navigating local tastes, intense competition, and the rising popularity of NoLo (no and low) alcohol options. Additionally, the U.S. tax structure favors malt-based RTDs over those made with spirits.
Despite these hurdles, Suntory believes its expertise in spirits gives it a competitive edge. The company argues that spirits-based RTDs offer a superior taste experience while still maintaining lower calorie and sugar counts compared to traditional malt-based options.
With its ambitious goals and focus on innovation, Suntory is poised to make a significant impact on the global RTD market. Its success in the U.S., however, will depend on its ability to adapt to local preferences and navigate the competitive landscape.