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2017.08.1SPECIAL

Quality People, Quality Stories. Vol.1 <English>

COEDO: Pioneering Craft Beer
Branding, Global Expansion, and Japan, in the words of
Mr. Shigeharu Asagiri—President & CEO of Kyodoshoji COEDO Brewery

---Could you tell us a bit about COEDO and craft beer’s transition in Japan over the years?

Five years ago, you barely ever heard the term “craft beer” in Japan. When we were in the process of rebranding COEDO in 2006, everyone was using the word “ji-biru” (local beer). At that time we weren’t even considering automation, because in order to set ourselves apart it wasn’t enough to just showcase where our beer was being made—we had to convey that we were a small-scale operation making everything by hand.

Then, a few years back, ANA began to develop an in-flight service based on their “Inspiration of Japan” concept, and COEDO was approached to have its products showcased as part of the service as a way to extend the concept of “Japanese craftsmanship” to beer as well. I think it was around that time that we really started to see the term “craft beer” gain traction. You have to remember that Japan was still recovering from the global financial crisis and the Great East Japan Earthquake just a few years prior, which caused people to question what true happiness really meant to them. There was a strong push to move away from this obsession with money and embrace the concepts of community and human interaction.

Take for example the concepts of “bean to bar” or “farm to table”—ideas that true happiness comes from doing something by hand, and allowing the consumer to really get to know the person or people behind the product. It was through the shift to this kind of thinking that allowed us to position craft beer within the narrative; and, as a result, craft beer established itself in Japan within a relatively short period of time. Now that Kirin has opened the Spring Valley Brewery in Daikanyama and is putting a lot of effort into promoting it, we’re finally at the point where the Japanese business world is also becoming more familiar with craft beer.

Overseas you often see a negative reaction when companies grow too large, and their products become mass produced. The result of which is the emergence of support for more high-quality, hand-made products. Beer is no different. Actually, the shift toward this phenomenon in relation to beer in Japan happened about five years earlier than I had predicted, and the shift itself was slightly different than what you were seeing in other countries.

Around two years ago, people started talking about a craft beer “boom” in Japan. The people behind it, however, likely consider the popularity of craft beer to be the natural result of product positioning during a time when Japanese society was undergoing a transition.

---Would it be reasonable to call this the second craft beer boom?

20 years ago, when the first local beer boom took place, the term “craft beer” didn’t even exist. Beer was seen as a tool. To be more precise, the ji-biru boom wasn’t born out of a desire to brew beer, but rather as a way to improve the economies of rural areas by using local beer to fuel tourism. It was a marketing strategy.

Now that beer is finally beginning to be appreciated on its own merits, we are seeing a movement by people who genuinely want to brew beer. These same people are also moving away from the idea of associating craft beer with tourism, and instead focusing on the community aspect.

---Interesting. Could you provide a bit more insight on what you mean when you say “community”?

Take Starbucks, for example. It’s neither a home, nor a workplace—it’s a “third place.” In that sense it fits into this concept of community. One need only to observe the number of elderly people congregating at Starbucks in the morning to see this phenomenon at work.
And within that you also have the “local” aspect. If you go to Whole Foods in the United States, you will see a “Local” section which displays tons of different types of beer. The impression I got when I saw this was that they were trying to emphasize this concept of community by promoting various areas.

And just as cafes make up an important part of a community, so do craft beer breweries and taprooms. One of the real selling points of craft beer is that you can share it right there at the very same place it was brewed. This wide range of platforms—from brewery to taproom—contributes to the ever-increasing number of craft beer companies in the United States.

At COEDO, we operate in a manner which I have coined “glocal”—a mix of “global” and “local.” It’s a different way of thinking than companies like McDonald’s, who instantly impact the values of those who their hamburgers touch by completely changing the way people live. Glocal is the deepening of a mutual understanding at a more micro level. In order to achieve this, I travel overseas every month to share COEDO beer with the world.

---You certainly have a very international website.

Right now, COEDO can be found in 14 countries. The number of Japanese restaurants overseas is growing, as is appreciation for Japanese food. We want to ensure people can enjoy great Japanese beer at these restaurants.

We have also won a number of awards at competitions like the World Beer Cup, and Shikkoku, our black lager, is ranked among the top dark beers in the world. As a result, we no longer need to use the words “Japanese beer” when talking about COEDO black lager. This enables us to extend our reach to a wide range of beer drinkers, whereas before we might have only been able to reach seasoned beer buffs. The expansion of our global operations is the result of these developments.

We are actually in the midst of a beer renaissance. The beer that emerged in Medieval Europe came about as the result of the dietary culture in England, Ireland, Belgium and Germany. In Belgium, you had Belgian beer; in Germany, you drank German beer, and so on. However, this whole way of thinking began to change over in the United States, and Europeans [traveling there] started experiencing beers they had never drank before. As a result, many Europeans decided to open breweries—a thought which, up until that point, would have never even entered their minds. Now, it’s common to see craft beer in countries like England, Scotland, and Germany. The world of beer is changing.

Just like the creativity that existed during the renaissance period, craft beer has an extremely experimental element as well. For example, if you roast malt, you get aromas of coffee and chocolate. You then also get people saying, “Hey! Why don’t we actually use coffee and chocolate when we brew beer?” (laughs) It’s that freestyle aspect that’s really interesting, and it keeps spreading.

We established our new brewery, the COEDO Craft Beer 1000 Labo, two years ago because we wanted to prove that beer had much more potential than simply as a staple; and we felt the time was finally right to try something new. We also felt that if we we going to keep making beer, we wanted to make sure we picked a location which we felt was perfect—and here we are.

---In addition to COEDO’s 5 main beers, you also make seasonal beers like the one you brewed for the cherry blossom season. Are these beers being developed at 1000 Labo?

SA. At 1000 Labo we have our main beers, and then we have beers which we have created as seasonal offerings, extensions of main offerings, etc. for people to enjoy. We don’t believe in simply perpetuating the status quo, so we like to explore new ideas and play with new ingredients that have never been used before. For example, using Szechuan pepper, or hua jiao, and using it to create a beer that pairs well with Chinese cuisine. What was once a lab designed to create 10 litres of beer, is now a full-scale brewery producing 1000 litres. This was one of the goals of 1000 Labo—to let everyone take part in the results of our beer experiments. In fact, the name 1000 Labo was based on our desire to make 1000 litres of 1000 different types of beer.

Almost all of the breweries in Japan use imported ingredients. There is clearly a problem with supply chains and the industrial structure of beer production [in Japan]. COEDO, on the other hand, works closely with local wheat farmers, and we turn their wheat into malt. We call this “beer physiocracy,” and it is an important part of how we operate. COEDO is a company with roots in farming, which is why we were eventually able to brew beer from malt we made ourselves.

---How would you describe fans of COEDO?

To me, our real supporters are the ones who have an appreciation for culture: people who like traveling, literature, music, movies, etc. It’s these types of people who also have a strong appreciation for food and drink. They are the ones who carefully select a wine, and really take the time to enjoy a good meal. However, when it came to beer, the same kinds of opportunities simply didn’t exist. That’s one of the reasons we work as hard as we do—to ensure beer is met with the same kind of appreciation.

---I noticed the title on your business card reads “Beer Evangelist.” Very catchy.

The idea has always been to spread COEDO’s message; but even more important to me is teaching people how to enjoy beer. I feel it’s best for them to understand beer before understanding COEDO. Also, I think it’s only natural to want to carefully explain everything in Japanese to Japanese people. For example, in Japanese we use the term “biru shokunin” (beer craftsman) instead of “brewer.” The work is very specialized, so we think it is more easily understood in Japanese if we phrase it that way.

---Could you explain the naming process that led to product names like Ruri (sky blue) and beniaka (bright red with a hint of yellow)?

They just flowed naturally from our concept. When I was collaborating with our designer, Mr. Nishizawa, he seemed really impressed by the fact that beer could come in so many different colors. From there, we decided that we would name all of our beers after colors; and since we’re a Japanese company, we wanted to use traditional Japanese colors.

---From the start, were you conscious of the importance of branding?

We always make clear what it is we want to convey. I guess you could call it conceptual? We are always very careful with the words we use, but I always felt that it would be best to utilize visual design elements as well, as a way to help create cohesion with the other aspects of the brand. I guess that’s what “branding” is—designing communication and visual and aural information.

---When was the first time you really felt like your branding efforts were a success?

I guess it was when people really started to show signs of supporting and understanding what COEDO was, and what we were doing. Part of that was also when we started to notice people really embracing our products and events. It made me think, “Hey, they get us!” I guess any time someone compliments your product there’s a kind of mutual understanding.

---How would you describe COEDO’s visual design elements?

I think we have been able to configure the brand concept, including the logo, in a way that allows us to convey a message purely through visual elements. And just as the general visuals are able to convey that message, so can our logo and products, as well as our website and black business cards. And because designs can be built upon, we can continue to convey our message in different ways. It’s also important to maintain design fidelity among all of the aspects of your business: if you have carefully designed and executed products and packaging, people are going to notice if you have cheap, shoddily-made business cards.

---When changing your branding, was there anything that you struggled with on an organizational-level?

I always make a point at the very beginning [of any big change] of organizing a classroom-like session where I give a presentation. This all began when I made the decision to stop using the term ji-biru. I told everyone, “From now on, we don’t make ji-biru. We make craft beer!” (laughs)

I also occasionally give presentations based on what I speak about at various business schools. I’m not sure if all of the material resonates with my employees, but I feel it’s nonetheless important from an internal branding standpoint to keep sharing that information—to keep repeating, “I’m thinking about this, so I’m going to do that.” If someone responds by saying, “I’ve heard that before,” that’s great, because it means that they understand.

---Where do you think COEDO would be if its branding efforts were unsuccesful?

The only option left would be to make a big decision. This is a family business, so I feel like you have to have a “go big or go home” mentality—either quit, or make a radical move to steer the business back on track.

Beer, as a product, has a lot of potential. I always felt that I could still get people interested in [craft beer] even if ji-biru never really took off. In that respect, it would have been a waste if I were to quit.

---Before COEDO, you were working in an industry completely separate from ji-biru. Did your appreciation for beer come afterward?

When I was 20 years old, I went backpacking all over the world. Actually, that’s similar to my life right now. (laughs) I remember being in London, seeing different kinds of beers like pale ales and stouts, and being enamoured by that aspect of the culture. It wasn’t like Japan, which had only 4 different [companies making the same type of] beers. In London, they had beers that were different colors, and I learned about them by communicating with people there. Not only that, no one was chugging beers at these pubs. In Japan, you have izakayas, where people go to eat and drink at a pretty frantic pace. At the pubs in London, however, the people were chatting and drinking their beers slowly, and would head home after a few hours. I liked that.

Then, when I went to Germany, I was amazed by the number of businessmen I saw enjoying a morning beer. I later learned that this was completely normal. The custom of really enjoying the flavor of the beer by drinking it slowly, and the fact that it was coming from breweries in little villages all around Germany reminded me of the way Japanese people drink shochu made in Kagoshima. I really enjoyed that aspect of the culture as well.

When I started working in my family’s business, ji-biru was still being used as a tool. Phrases such as “souvenir-like,” and “made with local ingredients” we being thrown around quite a bit. In order to give the operations of the local factories a push, they would make cheap happoshu (low-malt beer) and sell it below cost, because if they didn’t ramp up operations there would be even bigger losses. It was a near-fatal situation.
However, I never believed that beer was as boring as it appeared to be at that time. Rather, I knew it wasn’t. I have no doubt it was due to all of those experiences backpacking around as a 20-year old that I was able to be as confident as I was. Had I never left Japan, I likely wouldn’t have been able to come to those realizations. In Japan, everyone is Japanese, so everyone’s presumptions and ideas of common sense are the same. The term “diversity” might be a bit played out, but I think it’s a really beautiful thing.

Had I not experienced beer in those ways while I was traveling the world—had my experience and knowledge been limited only to what was available within Japan—I might have stopped before even attempting to research the United States’ budding craft beer industry.

---Speaking from your own experiences, do you have any words of advice for those considering branding in the near future?

If you don’t know who you are, what your position is in the market, or what your mission is, your branding efforts won’t be successful. Once you have a clear idea of what each of those are, you then have to take every opportunity you have to get that information out to the public.

Take personal branding, for example. In order to convey to someone that you’re a certain type of human being, you are constantly engaging in branding—be it through your glasses, the clothes you wear, or the way you talk. The sum of all these parts leaves an impression, so you have to have a clear idea of who you want to be, and what you want to achieve. Otherwise, you’ll frequently be met by people making comments like, “Didn’t you say something totally different last time?” or “What’s with your outfit today?”

Successful branding lies in the ability to differentiate. Being different is important. If you have a sincere personality, or you’re just really interesting, you will leave an impression [as an individual]. It’s no different when it comes to business.

---You recently joined forces with a workwear company to create new uniforms for your employees. Are you thinking of any other unique types of branding at the moment?

I guess that does count as branding, doesn’t it. Actually, yesterday I met with Sugahara Glassworks to discuss custom beer glasses. We’ve been in talks for the better part of five years trying to determine what kinds of glasses would be suitable for each of our five types of beer. Mr. Sugahara originally contacted me when our beer Kyara (eaglewood) won silver at the World Beer Cup, to see if we could work together to design a glass specifically for it. Since glassware and beer are both crafts, our way of thinking and ideals are quite similar, and we have grown mutually as a result. A glass needs to be filled; and beer needs a proper glass. We at COEDO certainly aren’t able to become glassmakers, nor do we have any plans to venture into that line of business, so this kind of collaborative approach is ideal. Certain types of expertise are best left to the specialists.
Our workwear was developed in collaboration with Mr. Sakon, the representative for a brand called Senelier. [Mr. Sakon] studied workwear in France, and, as a result, Senelier’s products are practical, but also have really nice style. Mr. Sakon believes that workers’ pride is connected to what they wear, so he has a very unique process of holding meetings and arranging test fittings to ensure the clothing is comfortable. It’s something I’d never even heard of, and I was really impressed. We apply stringent and ongoing testing to the tools, etc. that we use on a daily basis, so why not throw a bit of fashion into the mix? We spend so much time working—we might as well be comfortable and look good while we’re on the job. It was that kind of thinking that spurred this collaboration.

Also, [when it comes to collaborations] we never outsource the work to another supplier and try to pass the finished product off as our own. We always display both COEDO’s name and the name of the company we’re collaborating with; and if the partner company feels that there’s value in putting COEDO’s name out there, then we are more than happy for them to do so. For example, if both COEDO and Sugahara Glassworks can say “We did this together,” it’s likely that a certain type of customer with an eye for craftsmanship is going to notice. It’s only natural for that to lead to a broadening of our mutual customer bases. From a business perspective, that’s a great thing.

---As a Japanese brand which has already earned considerable recognition and praise overseas, what advice do you have for Japanese brands or companies currently considering global expansion?

Don’t compare Japan to other countries, especially when it comes to the food and drink industry. Branding is all about being different. If you don’t endeavor to set your business apart by branding yourself as being Japanese, there’s a high probability that it’s just going to end up being referred to as “Asian,” and fade away into obscurity. From a global standpoint, Japan is in a really unique position: it’s insulated, and you don’t see much innovation because it hasn’t assimilated. In a way, that’s kind of what makes Japanese content and products unique. Japan really is a world of it’s own.

Take Uber, for example. In certain rural areas of Japan, if you take the last train to your nearest station and then get in line to wait for a cab, you might have to wait over an hour until you can finally get a ride home. In the West—and in other places like Spain, where I just got back from—it’s really tough finding a cab that will take you to the airport at 4 AM. I asked the concierge at the hotel to call a cab, and I just sat there for 30 minutes waiting for someone to come pick me up, while thinking, “Well, there goes my flight.” But with Uber, you don’t have to worry about any of that. You can see which cars are available around you, and someone will usually come pick you up within a matter of minutes. In Japan, these types of systems just aren’t at the same level. Not to say that public transportation in Tokyo isn’t wonderful—it’s just different. And that might be a good thing, because tourists, etc. come to Japan to experience these differences.

If Japan was the same as everywhere else, people might not bother coming. That’s why it’s important for people to be able to recognize the differences, and for Japan to keep re-branding itself. For example, the Japanese language is also peculiar, because it contains words like wabi sabi, which reflect a type of art that you don’t see anywhere else. Even things we encounter on a daily basis, like manga, are unique. You don’t really see people all getting naked and getting into a hot spring anywhere else; and when you really think about it, that’s pretty cool. The fact that we don’t really feel embarrassed in those kinds of situations—because to us they seem completely normal—is what makes us appear so unique.

Or, if you’re talking about cuisine, all you have to do is look at ramen. Ramen is an immensely popular Japanese food; but it was originally derived from China’s noodle culture. It eventually became ubiquitous in Japan, and over time was transformed into something even better. That’s what the Japanese are good at: finding something that someone else has created or innovated, and taking it to the next level. The same goes for beer. It wasn’t invented by a Japanese person, but we are taking something we have been taught, and working towards improving it. That’s how individuality is born.

---I’m going to go back a bit to the first time you won at a competition. I seem to remember you being really confident at the time.

If you’re talking about the Monde Selection, that’s an absolute evaluation, as opposed to a relative one. In other words, as long as you achieve a certain score, you win the highest award. It’s not a competition, but rather an exhibition.

The platinum award we won in Germany in May, on the other hand, is different. You don’t get it unless your product is better than everything else in that category. At the time, my confidence came from my belief in Japanese craftsmanship, or, more specifically, the aspect of Japanese craftsmanship that is a reflection of Japanese diligence. Initially we were awarded a double “gold prize” by the Monde Selection, so we used that press as a way to emphasize the quality of our product. We used awards we received at other competitions as promotional tools as well.

---Can you tell us a bit about your new Art & Science theme?

”Art” and “science” are both key words when it comes to brewing beer. After all, beer is chemistry. Take farming, for example, which is a combination of the natural sciences, chemistry, and organic chemistry. Then there’s fermentation, biotechnology, and mechanical engineering for when you have to dispense the product at the very end. It’s all science. However, when it all come down to it, perfecting the flavor of a beer is art. It’s not something that can be done by technical experts or engineers alone. The overall message, therefore, is if you want to brew beer, you have to embrace science.

---What are your thoughts on E-Commerce?

Basically, we don’t put too much emphasis on direct sales. If you don’t have any real channels to sell you products, then it’s a no-brainer to go the EC route; but that’s not the case for us, as we have people working hard to sell COEDO beer. We don’t want to cannibalize those efforts, so we typically don’t get involved in the direct sales side. If there was a bit more of a modern approach available, we might consider it, though.

We are planning on revamping our smartphone site this year. Since we moved the brewery to a new location, we’ve got to replace a lot of the images. Maybe that would be a good time to reconsider some other opportunities.

---As pioneers of craft beer representing Japan on the global stage, do you have any words for all of the other brands—not necessarily just beer brands—out there?

Design is extremely important. If you’re planning on taking your brand overseas, you can’t rely on using Japanese to get the message across. You have to plan your design with that in mind, and make sure you’re not relying on words alone. That’s something we never lose sight of. Designs are assets.

---Could you provide us with a bit of information for fans of COEDO beer?

We’re actually planning to break the forbidden seal of ji-biru once again this summer. What I mean by this is, we’re going to be honest when people ask us what ji-biru is, and tell them, “It’s ji-biru!”

In Kawagoe, there’s a shrine called Hikawa Shrine that will be holding an event called koi akari. There will be 888 wind-bells called en musubi furin, which will be beautifully suspended above the grounds. Visitors all receive bonbori (Japanese paper lamps) from the shrine before they leave, so they can light up the streets as they return home.

COEDO will be releasing two special beers beers in limited numbers in celebration of the event, called Asaniji (morning rainbow) and Gekka (under the moonlight). Asaniji is brewed with lemon and honey, and has a finish that is both a bit sweet and a bit sour. Gekka is a wheat-based beer that will incorporate black barley, resulting in a slightly bitter finish.

We will be running this promotion for th

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