Okuchi Distillery

Okuchi Distillery

“Kuro Isanishiki” is the best-selling sweet potato shochu in Kagoshima’s capital city, and the brand has long been carefully created here in amongst the rice fields of the Isa Basin. Located roughly 75 minutes north of Kagoshima City by car, Okuchi Distillery has navigated the highs and lows of selling sweet potato shochu in Japan for several decades.

Few in the industry understand international trends in the international spirits market as sharply as Mr. Koichi Yamada. The globe-trotting marketing guru is one of the top executives at Okuchi Distillery in Isa City, and he is keenly aware of the pressures facing both his company, the shochu industry, and Japan as a whole. Mr. Yamada sees a clear need for a new way of marketing Okuchi’s products to younger generations of consumer.

In his free time, you can find Mr. Yamada creating behind his turntables. He loves music, outdoor festivals, the intersection of good tunes and great drinks, and he’s met people from all walks of life through his travels. He’s gregarious and easy to talk to, so he tends to have a clear idea of how young people are thinking and moving. Ominously, or opportunistically depending on your angle, he sees change coming at the shochu industry from all directions.

Change has already happened to Okuchi Distillery several times over. Its number one shochu product four-plus decades ago, “Isanishiki,” now accounts for less than five percent of total sales volume. The lion’s share of production, marketing, and sales energy goes toward “Kuro Isanishiki,” a younger cousin with a bit more funk and a lot more swagger. Isanishiki sales were overtaken by Kuro Isanishiki about 25 years ago, and production volume has diverged steadily ever since.

“Consumers like to try a different drink every day, so it’s tough to create loyalty,” Yamada laments, “the experience needs to be fun; it needs to be new.” He’s also under no illusions about trying to educate new consumers and develop new markets abroad. “Overseas sales are mostly to the Japanese expats living in larger cities. Consumers from South Korea and Hong Kong enjoy Japanese shochu, but most of our sales to consumers in those countries is from tourists who bring Okuchi home with them in their luggage.”

To get things started, he decided to call in frequent collaborator, Professor Koichi Sakaguchi, a marketing expert at National Kyushu University in Fukuoka. Together they helped craft tasting panels by putting out a call for professionals from various backgrounds and fields. The enthusiastic response led to study groups which met both in person and online to share ideas and try to identify roadblocks that stand in shochu’s way moving forward. Some of the meetings took place right at the distillery in Isa City, a considerable trek for some of the participants based in Tokyo more than 600 miles away. Professor Sakaguchi and Mr. Yamada guided and observed as the teams offered honest reflections and cooked up new shochu marketing opportunities.

The study groups were supplemented by tastings in Kagoshima City’s lively nightlife neighborhood, Tenmonkan, where more survey data could be mined and marketing keywords recorded. The venue was none other than popular teppan izakaya Yokaban 017 (the three digit number is pronounced reina), hands down one of the best shochu bars in the world. Isanishiki was tasted alongside several other sweet potato shochu brands that are of an easy-sipping, light-bodied style. The results of these complimentary efforts was the discovery of several consumer subgroups based on “drinking personality” and other individual characteristics gleaned through interviews. A couple of these may prove to be useful targets for future Isanishiki marketing projects.

In addition to the firm’s practical approach to marketing research, Okuchi continues to innovate and diversify. Japan’s imperial household is scheduled to undergo a changing of the guard next spring, and Mr. Yamada is coordinating with other distilleries to commemorate the occasion with something completely different. The last time the emperor changed 30 years ago, distilleries shipped samples from roughly 300 brands worth of fermented shochu mash to a government laboratory where they have been painstakingly stored ever since. The lab was able to isolate some promising new yeast strains from the samples, and a team of intrepid distilleries have formed to create a fleet of celebratory brands that will debut shortly before the current emperor, Akihito, abdicates the throne on April 30th, 2019, and his first son, Naruhito, assumes it the following day.

Concurrently, Okuchi Distillery has also sought out more opportunities to reduce its environmental impact. One of the largest waste products created by the company’s facilities is imo kasu, the sweet potato lees left over from distillation. The distillation by-product is now turned into pig feed and used at local farms, an endeavor that has proved successful in a number of ways. In addition to significantly reducing the amount of sweet potato lees dumped by the distillery, the resulting agricultural product is both affordable and effective for local farmers. The trace amounts of alcohol left in the feed has a calming effect on the animals and reduces fighting amongst the pigs at suppertime. Amusingly, the ‘food coma’ effect becomes more pronounced, which leads to pervasive swine naps.

The domestic and international drinks market is naturally a perilous one for medium-sized distilleries like Okuchi Distillery. Expand too quickly, and bankruptcy is only a bad season or an economic downturn away. Fail to recognize market trends, and watch your market share erode as competitors outmaneuver you. Regardless of what the future holds, it’s a safe bet that Mr. Yamada and his team at Okuchi Distillery will find creative ways to stay in the mix.

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Koichi Yamada, CEO of Okuchi Distillery

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Distillery workers make short work of fresh sweet potatoes.

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Stirring the fermenting sweet potato mash.

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Kuro Isanishiki sweet potato shochu, 25% ABV (left), Isanishiki sweet potato shochu, 25% ABV (right),

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A birds-eye view of Okuchi’s newer facilities.

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