The Crisis of a Sake Wholesaler: Taking on the New Business 'TASU⁺' in an 'Era Where People Don't Drink Sake'

Nihon Shurui Hanbai (Nishuhan) is a sake wholesaler with over 70 years of history. It is a major BtoB company in the sake industry with over 700 employees and locations nationwide.

As a 'wholesaler,' the company has been a behind-the-scenes player invisible to the general consumer. For the first time, Nishuhan has entered the 'retail and food service' industry, opening the shop, cafe, and bar 'TASU⁺' in Tokyo Midtown Yaesu.

Why did a long-established major sake wholesaler choose this time to challenge itself in the unfamiliar food and beverage industry? They say it was driven by a strong sense of crisis that “the existence of wholesalers is becoming unnecessary.” We spoke with Mr. Kittaka from Nishuhan.

Is the sake wholesale business outdated?

Mr. Kittaka: For many years, we have conducted business in the 'middle' between the upstream (sake breweries) and the downstream (liquor stores and restaurants). Originally, the sake industry was a world where roles were divided, relationships were maintained, and business rarely occurred outside of established partners.

However, in recent years, the way business is conducted in the sake industry has changed significantly.

Sake breweries are now connecting directly with liquor stores that provide specialized sales and management suited to their products, rather than relying on old relationships. Furthermore, DtoC initiatives that sell directly to consumers are also expanding.

Mr. Kittaka: As wholesalers, we have spent many years building a mass distribution system, purchasing large quantities of sake from breweries and distributing them to large supermarkets and restaurants. But times have changed, and more breweries are setting strict sales conditions. The necessity of our existence as wholesalers is declining.

──He also mentions that when they looked at themselves, there was something akin to complacency as a major player in the industry.

Mr. Kittaka: How are we doing compared to the breweries that are trying to change? For example, are we continuing old-fashioned attitudes that don't fit the current era, such as easily demanding product samples or returning goods without much thought? Could it be that our asset—our 'connection with the breweries'—is becoming thinner because of this?

Wholesalers must change now. We realized that we must not just transport goods between distribution points, but become an entity that properly connects producers and consumers.

A 30% survival rate over 3 years—The dangerous path of 'food and beverage'

──In 2023, the new landmark 'Tokyo Midtown Yaesu' opened near Tokyo Station. In fact, this location is the 'birthplace' of Nishuhan. Nishuhan is also one of the co-owners of the facility.

“Can we do something using this new facility?”

Discussions started from that question, and the business plan to 'open our own shop' was born. For Nishuhan, which has operated behind the scenes for over 70 years, this seems like a bold challenge.

Mr. Kittaka: It's eccentric, isn't it? From the perspective of someone who has been wholesaling to liquor stores, we jumped two steps (wholesale → retail → food service) closer to the consumer. Of course, no one had any experience in the food and beverage industry. From the beginning, it was clear that the food and beverage industry is a field with a very low survival rate—a thorny path.

Even so, the reason we went through with it is largely emotional. Having handled sake for so long, we really love 'drinking establishments.' There are various business plans and strategies, but it comes down to this.

──A wholesaler entering the food and beverage/retail sector. If you imagine the conventional business relationships, this means jumping over the liquor stores and restaurants they used to supply. While D2C by manufacturers is praised, the expansion of distribution companies—the reverse—is a topic that easily sparks debate. How are they reconciling this?

Kittaka: First, regarding the point of 'selling alcohol,' we have established a rule of 'no discount sales' so that we do not gain an unfair advantage, thereby maintaining fairness with the shops we supply.

As for restaurants, I feel that currently, they don't even see us as 'competitors.' This would change if we were to open 100 stores, but as beginners in the restaurant business, we are approaching this as an experimental project. We are at the stage where we would be happy if restaurants even just became aware of us.

The Dilemma of Traditional Companies: 'It's Easier Not to Change'

-- Opening your own stores. Although the new business proposal was launched, it is said that when it came time to recruit colleagues, only a very small number of people raised their hands.

Kittaka: We, especially those in sales, were deeply ingrained with the traditional 'salaryman way of working.' When we were young, we would visit many shops, eventually be in charge of famous specialty stores or retailers with several trucks, then handle large clients with chains nationwide, and finally move into desk work.

The new business of running a restaurant feels like a huge departure from that main career path.

Also, working at a store means that the way you work changes significantly. Restaurants are open late at night, and you have to work shifts on holidays. It is easier to just do desk work at fixed hours as we have done until now.

Even so, jumping out of traditional operations to take on a challenge is something necessary right now.

For the company, and of course for the employees, there is a lot to learn, and that will surely be useful in future steps. People with that kind of will and imagination are working with me now.

'People don't drink sake': Shocking survey results

-- 'TASU+' is a space with a casual atmosphere consisting of a counter and a few tables. With bartenders serving cocktails, it is a different world from the 'stuffy sake izakaya' one might imagine from a 'long-established sake wholesaler.' In fact, it feels like you are intentionally trying to move away from that 'typical' image.

Kittaka: We conducted a survey at our company to see how much sake is being consumed. The result was that people who go out drinking with the intention of having sake... were at a level of about 2 out of 100 people. Even when they took the action of 'going out to a restaurant to drink,' they only chose sake about once in every five times.

Sake is not being chosen now more than we think.

In addition, I am in my 50s, and my image of sake when I was young was 'drinking cheap carton sake like an idiot at university welcome parties and getting sick.' I was surprised, but young people today have had almost the same experience.

For over 20 years, the 'bad first experience' with sake has not changed.

-- Sake is not drunk, and the image of sake is not good. The answer we reached after facing this reality was that 'starting with sake or a sake izakaya is no good.' TASU+, which aims to 'connect producers and consumers,' has eliminated the 'sake-like elements' that many people imagine, such as 'Japanese food' and 'fish'.

Kittaka-san:We, as stakeholders in the sake industry, naturally love sake. Because of this, we tend to misjudge that sake is in demand by the world. It is important to face the current state of sake calmly.

──Rather than putting sake on the signboard to attract fans, an 'attractive place' comes first, and 'sake' is one of the ways for visitors to enjoy themselves. 'TASU+' aims to be a place that creates a connection between consumers and sake.

Sake cocktails that change shape, created by bartenders

──At 'TASU+', you can enjoy not only sake, but also beer, whiskey, sours, and 'sake cocktails.' From here on, I will introduce some of the cocktails I had.

Washu-ru

Beer x Sake. The aroma of sake is added, giving it a taste like craft beer. The sake used is the 'Bekkaku' series from Hakutsuru Sake Brewing. It goes down very easily.

Washu Tonic

A sake version of a gin and tonic. A cocktail made with 'Matsunokotobuki,' plus cucumber and myoga ginger! It's refreshing. I learned for the first time that Japanese ingredients go well with cocktails.

Also, the sake lined up on the 'TASU+' menu is relatively 'gorgeous' and 'clean,' and you don't see many major breweries with high sales volumes. However, for some cocktails, they use 'Hakutsuru Maru,' familiar as a carton sake, showing an intention to convey the goodness of classical sake to people who are not sake fans. (I can't imagine people who drink cocktails here having carton sake at home.)

A 'sake experience space' that is more than just a 'shop'

──'TASU+' is bustling every day with many customers (who don't seem to be sake lovers). Several months have passed since the opening, but how is the response as a 'new business'?

Kittaka-san: Honestly, it's still not enough. We are experiencing one by one what it costs to run a shop and what kind of things happen.

There are voices within the company saying, 'It's been nearly half a year, are you still struggling?' but... no, no, we've been a wholesaler for 70 years, and looking at that history, I think half a year is still full of discoveries.

Besides, it's quite difficult to make sufficient profit as a business with just one 30-tsubo store. Also, I don't think this is a business aimed at that (maximizing sales of the store alone).

──The goal is not just the sales of one store.

Kittaka-san: Yes, this is not just a place to do business, but a 'place to connect sake breweries and consumers.' There are things that can be utilized because it is a real store, such as connecting to promotions for sake breweries and appealing our PB products.

As a space where food and sake are actually present = can be experienced, it also becomes a place for proposals and business negotiations. In addition, we plan to use it for events, and we want to expand various uses in the future.

──For 70 years, Nihon Shurui Hanbai has functioned as a 'behind-the-scenes' player in the sake industry, but with 'TASU+', you have begun to face consumers directly. It is a grand experimental ground aimed at business growth, using 'real-life experiences' as a weapon, isn't it?

'TASU+'. With a wide menu ranging from sake cocktails to classical sake, and casual dishes that don't feel intimidating, it is a wonderful place to enjoy while chatting and having a good time (as, in fact, I did while listening to this story).

I will definitely visit again.