What’s Kirin going to do about Ito En?
Ito En is currently Japan’s fourth ranked soft drink manufacturer. In third place is Kirin (Coca-Cola and Suntory, respectively, are #1 and #2). However, Ito En has slowly been sneaking up on Kirin’s market share and when private label production is included, Ito En actually outsold Kirin in the January-June period.
According to Inryo Soken, which tracks soft drink and beverage sales in Japan, Kirin sold 79.3 million cases of soft drinks during the January-Japan period, down 7% from the previous year. Ito En, on the other hand, sold 79.2 million cases, an increase of 5% against the same period a year ago. When private label brands are included, Ito En’s sales are boosted to 84.7 million cases.
Ito En is a much newer firm than Kirin, and it has had some success selling it’s iced tea beverages in heavily urbanized US markets. This led to the “reverse import” drink Tea’s Tea, which first went on sale in the US but is now available in Japan. Kirin, on the other hand, has virtually no soft drink presence in the United States.
US sales, however, are not a determining factor here. Green tea is. Ito En sells Oi Ocha, which dominates the bottled green tea market. Kirin’s offering, Nama Cha, provides a weak and nearly flavorless contrast, with sales along the same lines.
So what is Kirin to do? After all, it has been in the #3 spot for soft drink sales since at least 1993 (when Inryo Soken began tracking data), and it seems to be falling behind Ito En’s more progressive tactics.
According to the Yomiuri:
Kirin has been struggling after it abandoned low-price competition at mass retailers to pursue greater profits.
“It was a result we expected,” Kirin Beverage President Hitoshi Maeda said in defending the company’s strategy.
With the company facing poor sales of its Nama-cha green tea and mineral water, a Kirin spokesperson said the company would only focus on new products that sell well.
Struggling sales was an “expected” result? Has anyone been fired over this?
Or was that something done in preparation for a tie-up with Suntory?
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