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Business Insight

Expansion Plan for Liquor Giant

Executives at Japanese beverage giant Suntory are looking to acquire a bigger slice of the global market. Last year they purchased US drinks maker Beam in a deal that made the company the world's 3rd-largest spirits maker. President Takeshi Niinami says he's not about to slow down. NHK WORLD's Nana Yamada reports.

Suntory sells everything from whiskey and beer to soft drinks and health care products.

Niinami took the company's helm last October. Until then, he had spent over 10 years as the president of Lawson, a convenience store chain with more than 12,000 stores worldwide.

"I've been thinking I should challenge something new which is completely different than retail, trading, and investment. So I thought about manufacturing. Plus, definitely I wanted to stay in the industry which is related to consumers. So, Suntory is heavily involved in consumers. So I am running the company as I think is right. And more or less, with open communication with lots of people. They are thinking about something always creative and new to offer to customers and consumers. So, something new is happening even in a rank- and-file, which is the strong culture of Suntory. Amazing. So I have to be ahead of it. I have to make every effort to think differently from those people, and I have to provide them with a new thinking. That is a very big hardship."
Takeshi Niinami / President, Suntory Holdings

Suntory aims to nearly double its sales to 4-trillion yen - or about 34-billion dollars - by 2020.

The company paid 16 billion dollars to acquire Beam. It sees the move as a stepping stone to further penetrate the overseas market.

But that could be tough. The global market is dominated by giants like Anheuser- Busch InBev, the maker of Budweiser beer, and, Diageo the maker of Johnnie Walker whiskey.

"The key is definitely the globalization not only increasing our sales in Japan but also in global markets, US, UK and emerging economies as well. Definitely the most important business is the one we acquired quite recently that is Beam Suntory. We want to make use of its channel and its brand. They have huge assets, so we just capitalize on the value Beam Suntory in the area of spirits business. We have all line-up of whiskies for example bourbon, Japanese whisky, Scotch, Irish whisky, so we can offer to any consumers in terms of product portfolio. That is a huge differentiation from Diagio for example. Japanese whisky is regarded as a premium whisky, and only we can offer to global market so there exists huge difference and competitive edge against our rivals such as Diagio. We just want to leverage the strength and the competitive edge to compete with our rivals in the global market."

Niinami is trying to strengthen the company's three areas of business-- alcohol, soft-drinks, and health care. He says the company will establish a research and development center this spring in Kyoto to make that happen.

"So that will be the center of our activities of R&D, and we want to focus on such as health care, such as new technology of fermentation for example. We want to explore new technology not only developing by yourselves but also we just want to seek opportunity to bring in from outside. Maybe we should...we will contact the Silicon Valley to find the new technology. The key thing is a very long term that's about competitive advantage against our global competitors. We have very long term vision and that is why R&D is very important. And we just have maybe 10 or 20 year time horizon by the results of R&D"

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