Non-Alcoholic Beverage Price War In Japan Cools, Profits Rise

Intense price competition has suppressed profits among Japan’s major non-alcoholic beverage producers for years, but the price war is easing and margins are starting to rise. But other factors are driving the trend as well, including cost cutting and marketing of products with greater added value, including functional benefits, at higher prices. The average margin of majors Kirin Holdings (green and black tea), Asahi Group Holdings (Calpis yogurt-based drinks), Suntory Beverage & Food (soft drinks, tea, etc.), and Coca-Cola Bottlers Japan should reach 6.7 percent this year, the highest since the 2008 recession. Market leader Coca-Cola is sharpening its focus on profit by “rebalancing price and sales volume.” That shift in business focus toward profit has cooled industry price competition.