The retail scene in Japan has changed dramatically in the past 20 years. As licensing laws have relaxed, there are now more routes to market than ever. Approximately two-thirds of wine purchased in Japan is sold in the off-trade; the majority through bricks and mortar retailers. Popular channels include department stores, convenience stores, specialist wine shops, discount stores and supermarkets.
Almost every retailer faces the challenge of attracting new clients, exacerbated by a shrinking population in a country where most consumers are 40 to 60 years old. Winemaker dinners remain popular; however there is growing demand for more casual events which involve tastings with local dishes.
Stores and wine shops
Department stores hold a special place in retailing in Japan. Some trace their origins back to kimono shops. Others belong to railway companies which built the stores at terminuses. While the percentage of wine sales through department stores is relatively low, around 2%, these emporiums play an important role in promoting premium wines. Due to their high footfall and prestige, department stores provide excellent exposure to the wines they offer.
Tokyu Honten, Tokyu’s flagship store in Shibuya, has a well-deserved reputation as one of Japan’s best wine retailers. Under the supervision of knowledgeable and approachable chef sommelier Akira Fujimaki, there is a core of 3,000 wines, but the store handles up to 10,000 labels a year. Sales are mainly to private and corporate clients for personal consumption and gift giving, which is still an important social and business custom. Tokyu Honten stocks wines from classic regions from around the world, as well as newly popular regions such as Georgia. France, however, represents 55% of sales. The average price of a bottle is a healthy ¥5,200 ($46.00).
Grande Cave at Isetan Shinjuku also boasts an excellent selection of fine wines, including a strong section of 120 Champagnes. Sommelier Noriyoshi Miyazawa comments that while Bordeaux is still popular, the rise in prices means that collectors now look to other regions such as California.
Specialist wine shops must carve out their own identities to attract consumers as other retailers win market share, especially from local liquor stores. Enoteca, a subsidiary of Asahi Breweries, is one of the leading retailers with sales of ¥235 ($208m) in 2017. Enoteca’s approach is unashamedly upmarket. Currently it has 68 shops nationwide, including Wine Shop Enoteca branches as well as Terroir by Enoteca outlets in department stores. Its new shop in Ginza Six is clearly designed to promote wine as a luxury product.
La Vinée, located in Ebisu, is a subsidiary of Sapporo Brewery. La Vinée is rightly described as “an evangelist for French wines” by director Hatsuo Ogiwara. It sources wines directly from not only classic French appellations but also lesser-known regions including Jura, Savoie and Corsica. There are two cellars, the Cave du Jour with an average price of ¥2,500 and a wide selection of grower Champagnes, and the Grande Cave for fine wines. In both there are many older vintages that are ready for drinking at all price points and quality levels.
Next door is the affiliated Wine Market Party. Wines here are sourced from Japanese importers and come from around the world. As the name suggests, customers can also find anything needed for parties including cheese, glasses, decanters and the like. The company has a core of 1,000 labels priced in the ¥1,000 to ¥1,500 range. There is also a fine wine cellar with Champagne, Burgundy, Italy, California and Australia all represented.
Cave de Relax, whose main shop is in Toranomon, is described by managing director Kunio Naito as an all-rounder; there are six stores in all, one of which is a stylish collaboration with Riedel. Cave de Relax showcases 1,200 wines, increasing to around 5,000 with seasonal promotions. Most come from local importers. The majority of customers are knowledgeable enthusiasts and connoisseurs, with the casual wine consumer now buying though supermarkets, convenience stores or the internet.
Independents and hybrids
For wineries, the many independent stores represent a key route to market. Independents often sell not only to private customers but also to restaurants and bars.
Wine Store Wassy’s in Osaka, founded in 1999 by Yoshiaki Washitani, is a pioneer of Californian wines. Italy, France, Germany and other New World countries are also represented. The company also maintains stock of older vintages from Opus One, Au Bon Climat and Clos du Val for collectors.
In Kyoto, highly regarded Wine Grocery traces its roots back to 1877 but has specialised in wine since 1982. Masakiko Yoshida is CEO of the family business. While representing classic regions around the world, its main focus is Burgundy and Champagne, particularly growers’ Champagnes. Wine Grocery sources from Japanese importers but also imports small quantities of ‘zero dosage’ Champagnes directly from growers.
Cave de Ebina, also in Kyoto, is a local shop for traditionalists. Hisao Ebina is the seventh generation to run the business. Starting as sake makers in 1843, the family moved into retail 70 years ago. Then 40 years ago his father Kinzo Ebina decided to concentrate on wine. Most of their 800 labels are French. Ebina has always offered wines that are nomi goro or ready to drink. Their forte is the selection of delicious wines in the ¥3,000 to ¥5,000 range.
Takamura Wine & Coffee Roasters in Osaka is run by well-travelled CEO Makoto Matsu. In 2013, the shop was renovated with a focus on wine and coffee and the result is a casual, unpretentious but unusually spacious loft-style environment. It stocks 3,000 to 4,000 labels including both everyday and fine wines. Near the entrance are Enomatic machines offering 48 choices. For a modest corkage fee, customers can enjoy purchases in the shop.
Focused on low-intervention wines, Kyoto’s ethelvine was founded in 2006 by Masanobu Egami to sell wines to restaurants and bars. Five years later he opened the shop due to burgeoning demand from private clients. Egami buys through importers and stocks more than 250 growers. Stock changes regularly and better-known producers such as Domaine Bizot sell out quickly.
Ginza Cave Fujiki traces its roots back to 1889, with a central location on the ground floor of Mitsukoshi. Owner Toru Fujiki decided to focus on natural and low-intervention wines in 2009. Starting with France, he expanded to Italy, Austria, Germany, Georgia, California and Japan. The average bottle price is ¥4,000 and sales of orange wines have increased rapidly in the past year.
One significant recent development is the hybrid retail space and wine bar. One version of this is the kaku-uchi or standing bar, which developed from small spaces in liquor shops where customers would a have drink. Fujikonishi in Tokyo offers an intimate, updated interpretation of the format. The focus is on Japanese boutique wineries that are increasingly sought after among collectors.
Risaburo Endo is a well-known wine educator with a shop and restaurant of the same name near Tokyo Skytree. One thousand wines are available, with average prices of ¥3,000 to ¥5,000. The selection rotates frequently and bottles bought at the shop can be drunk in the restaurant for a corkage fee of ¥1,000, or at the nearby kaku-uchi.
Supermarkets and others
Discounters have proved a disruptive influence in the market over the past two decades and account for about 10% of sales by volume. Kakuyasu, Yamaya and Liquor Mountain are three of the larger liquor discounters.
Yamaya has more than 330 stores, and imports directly through Cordon Vert, which it jointly owns with Aeon. Specialist store La Cave de Yamaya displays entry-level wines near Bordeaux First Growths and Burgundy Grand Crus, a testament to its ambition to tackle all sectors. Wines receiving medals at the Sakura Japan Women’s Wine Awards are currently among the bestselling.
Supermarkets account for the largest share (55%) of wine sales; 84% are priced below JP¥1,000. National supermarket chains include Aeon Retail and Ito-Yokado. Sales in the core JP¥500 range are reported to be sluggish and stores are now promoting organic and natural wines to inject life into the market.
Premium chains include Seijo Ishii with more than 160 stores, whose selection typically includes classic Old World regions alongside premium New World brands such as Penfolds and Cloudy Bay and also labels from its own import company.
One of the oldest and more exclusive supermarkets is Meidi-ya, which has 31 stores. Founded in 1885, it introduced imported goods at a time when there was fashion for foreign products and was already importing Château Lafite by about 1900. Many wines are imported directly through its subsidiary, the negociant Mortier in Bordeaux.
Convenience stores, of which there are an estimated 55,000, account for 7% to 10% of wine sales. They act as grocery stores and offer a range of services including ATMs, bill payments and deliveries. The leading chains are 7-Eleven, FamilyMart and Lawson. FamilyMart has more than 24,000 outlets, and a typical offering will include Chilean, French and Japanese wines. The Japan-Chile Economic Partnership Agreement has helped Chile to dominate the entry-level market in recent years; there is nevertheless a sense that this market is saturated and low-priced Chilean wines have become harder to sell over the past 12 months. It remains to be seen whether more EU wineries will want to enter this competitive sector following the EU-Japan EPA.
In conclusion, the rise of convenience stores, supermarkets and discounters is undeniable. There has also been a proliferation of specialist and independent shops offering a breadth and depth of choice never seen before. These and the department stores offer wineries the best locations for showing their wines and consumers the most exciting locations for buying.
This article first appeared in Issue 4, 2018. For more great content, subscribe to Meininger's Wine Business international