Jim Beam owner bets on canned vodka cocktails to double revenue

THE maker of some of the world’s most refined whiskies is rebranding itself as it tries to dominate the global market for a more downmarket drink: the canned cocktail.

Suntory Holdings’ New York-based Beam Suntory subsidiary will change its name to Suntory Global Spirits on Tuesday (Apr 30), removing Beam from its name a decade after it bought the US-based bourbon brand. The unit aims to grow its US$5.5 billion in global sales to US$10 billion by 2030 – with an emphasis on RTDs, or “ready to drink” beverages.

“We want to spread Japanese authenticity, which is so popular in the US,” Tak Niinami, chief executive officer of Suntory Holdings, said. “R&D in RTD is our strength and has been for more than 30 years, as we study to how to put flavours together with alcohol. It sounds like a very easy task, but it’s not.”

Suntory said the change did not stem from any weakness in the Beam name and will not alter its commitment to the Jim Beam brand.

But whisky is not growing as quickly as RTDs, and Jim Beam has not been growing at the same rate as some of Suntory’s other whisky brands. The company said in February that Jim Beam’s sales grew 3 per cent year over year in 2023, while fellow bourbon Maker’s Mark grew 10 per cent and its Japanese whiskies had “strong double-digit sales growth”.

RTDs are ramping up as consumers move beyond simple malt-based hard seltzers such as White Claw. From 2020 to 2022, the volume of RTD sales by litres grew by 20 per cent, and US dollar sales grew by 46 per cent, according to data from Euromonitor. Whisky grew just 8 per cent by volume and 30 per cent in US dollars. Though whisky is a much larger market globally by US dollar sales, consumers quaffed almost twice as many litres of RTDs as they did whisky in 2022, Euromonitor data shows.

Suntory started selling canned vodka drinks called -196, pronounced “minus one nine six”, in Japan in 2005. The brand uses a patented “freeze crush infusion” technology – at -196C – to extract flavour from whole fruit.

The company expanded -196 to Australia in 2021, adding China and a handful of US states in 2023. This February it announced it would accelerate the brand’s global availability, bringing it to around 21 states, and launching it in the UK and Germany around spring. The brand will also be in South-east Asia by the end of the year.

In the US, -196’s packaging was recently updated to say, “Legendary in Japan. Now crafted in the US,” to appeal to consumers who associate Japan with quality. The cans also feature Japanese lettering.

Broader category

Suntory sells a wide range of products in Japan in the broader beverage category – many through its ubiquitous vending machines – but some offerings such as teas and energy drinks are not available in the US. Asked if the company might introduce more products in the country, Niinami said it’s “under consideration” but the decision will be up to the company’s publicly listed subsidiary, Suntory Beverage & Food.

Suntory Global Spirits, which will continue to be led by CEO Greg Hughes, owns high-end whisky brands such as Yamazaki and Hibiki – among the world’s most expensive – as well as the more affordable Jim Beam. Other RTD drinks made by the company include On The Rocks Premium Cocktails and Jim Beam Kentucky Coolers, available only in US markets. It makes a low-alcohol drink, Horoyoi, that’s sold in Asian markets but not the US. BLOOMBERG