Japanese Whisky on a Booming Surge

Japan’s burgeoning whisky business is driving rice farmer Hiroshi Tsubouchi to hit the booze.

With domestic rice consumption sliding, Tsubouchi, 36, says he’s getting on the whisky bandwagon -or, at least switching to barley to make it. With Japanese whiskies ranking among the best and most expensive in the world, the profits of the local distillery industry are beginning to flow to the country’s farmers.

Tsubouchi will reap his first crop next month, joining a dozen of farmers in central Japan testing barley’s potential to bolster incomes and help feed the nation’s malt-hungry spirit-makers. Japan is the world’s fourth-largest importer of the grain and second-biggest buyer of malt, the barley byproduct that is mashed and fermented to make whisky and beer. Imports of whisky-making malt jumped 20 percent last year and has almost quadrupled over the past decade, spurred by demand for Japanese whiskies from San Francisco to Hong Kong.

“I never expected our Japanese whiskies to be so popular overseas,” said Ichiro Akuto, 50, whose single malts sell for as much as 100,000 yen ($920) per bottle. His distillery, Venture Whisky Ltd., in Chichibu in Saitama prefecture, is working with local farmers to establish a supply chain for a malting plant he built in 2013. “I want to produce whisky with the flavor of Chichibu; something I believe would be admired around the world.”

Akuto has already gained that level of recognition, winning awards every year from 2007 to 2012. In Jim Murray’s Whisky Bible for 2015, Yamazaki Sherry Cask 2013, a Japanese single malt whisky made by Tokyo-based Suntory Holdings Ltd., was named “World Whisky of the Year”.

Ichiro Akuto
Photographer: Tomohiro Ohsumi/Bloomberg

While global sales volumes from all producing countries increased an average of 5 percent a year from 2009 to 2014, they advanced at a 5.6 percent clip in Japan, data from Euromonitor International Show. While most Japanese whisky is consumed domestically, last year the country sold a record 10.4 billion yen ($95 million) of it abroad, an eleven-fold increase over the past decade.

A bottle of 1960 Karuizawa sold for HK$918,750 at Bonhams in Hong Kong last August, setting an auction record for a Japanese whisky. One of only 41 bottles ever made, and after being aged 52 years in casks the Karuizawa is considered the holy grail of Japanese whiskies by collectors.

Hibiki Suntory Whisky served at a San Francisco bar.

Photographer: David Paul Morris/Bloomberg

Whisky supplies have become so tight that Suntory Holdings President, Takeshi Niinami has asked his staff to follow his lead and try abstaining from the company’s premium malts. The need to conserve sales inventory trumps the executive desires to consume it himself, Niinami told reporters in January. “Hibiki is my favorite, but I can’t,” he said.

Suntory, the country’s biggest distiller, will spend 5 billion yen in 2016 to expand production, adding to the 7 billion yen spent on expansions since 2010, said spokeswoman Hasumi Ozawa.

Whisky maker Akuto, who worked at Suntory until 1995 as a salesman, expects shipments from his Chichibu distillery to increase by 20 percent a year. Last year, he sold 100,000 bottles a third of which went overseas to customers mostly in the U.K., France, the U.S. and Taiwan.

Increasing whisky production has been a boon for U.K. farmers, whose barley has become the backbone of Japanese distilling operations. Japanese malt imports a total of 4,744 tons last year, worth about 437 million yen.

A Venture Whisky employee holds malt barley.

Photographer: Tomohiro Ohsumi/Bloomberg

Japanese whisky is a subject of “increasing national pride, due to rising international recognition and a TV dramatization of the life of MasatakaTaketsuru, a pioneer in Japanese whisky distilling,” Euromonitor said in a report in October.

“I am the happiest person in the world as my whisky is not only giving people a lot of pleasure, it is also creating a new industry here and reinvigorating farming,”says a happy Ichiro Akuto.