Great Figures of the World Series | Episode 27: Kotaro Higuchi - The Restorer of Asahi Breweries, the Man Who Turned the Underdog into a Challenger

In the 1980s, Asahi Breweries was
called "a company that is already finished."

Market share was stagnant.
A sense of defeat hung over the company,
and even retailers were voicing pessimistic opinions.

The beer industry was effectively dominated by

・Kirin
・Sapporo
・Suntory

Asahi was the "fourth player."
At that time, there was even an atmosphere in the industry that
"Asahi is already hopeless."
However, a man appeared there.
He turned the "underdog company" into a "challenger company."

Kotaro Higuchi
The man who put into practice,
"The underdog can only win by changing."
Former Deputy President of Sumitomo Bank.
1926-2010 | The restorer of Asahi Breweries.

[Raised as a Banker]

Born in 1926.
After graduating from the Faculty of Economics at Kyoto University, he joined Sumitomo Bank.

He was not originally a beer craftsman.
He was neither a brewer nor from the beer industry.
He was a banker.

This was extremely important.
Because he was not tainted by industry common sense.
Numbers,

organization,
management,
restructuring.
He was a person who looked at companies from that perspective.

Later, he would
use this "external perspective" to
change Asahi from the ground up.

[Why Did He Come to Asahi?]

Asahi Breweries in the 1980s was in a crisis.

Stagnant market share
Deficits
Low morale within the company

Among the employees,
there was even a sense of resignation that
"we can't beat Kirin anyway."

So, Sumitomo Bank,
as the major shareholder and main bank,
sent Higuchi in as a "reformer."
He was not a founder, but a turnaround specialist.

He was not just a cost-cutter.
What he looked at first was not the financial statements, but
the "atmosphere" of the employees.

[The Problem Was Not the Product, But the "Sense of Defeat"]

Higuchi was surprised when he came to Asahi.
The employees had given up on taking on challenges.
The problem was organizational psychology, even before product strength.

So he first tried to
change the atmosphere, not the numbers.
In large Japanese companies at the time,

・precedent-based thinking

・deductive evaluation
・failure avoidance
were strong.

But Higuchi was the opposite.
He repeatedly told the employees,
"It's okay to fail.

Not taking on challenges is the real problem."
This was quite unusual

for that time.
But these words

changed the atmosphere at Asahi.

[He Promoted Young Engineers]

Within Asahi at the time,
there was a strong sense of stagnation.

Veteran-centered.
Precedent-oriented.
Safety-first.

But Higuchi thought that
they would never win in that atmosphere.
So he promoted young engineers.
There was fierce backlash from within the company.

"Are you going to leave it to such young people?"
"It's impossible."
"They will fail."

But Higuchi pushed through.
Because he understood that

"the destruction of common sense cannot be born from within common sense."

And he gave them an extremely difficult requirement.
"It has a crisp finish, but also body."

Normally, these cannot coexist.

But Higuchi saw that there was a new market there.

[The Super Dry Revolution]

In 1987, Asahi
launched Asahi Super Dry.
But this was not just a new product,
it was the destruction of industry common sense.

In the beer industry at the time,

・heaviness
・bitterness
・body

were the mainstream.
But Higuchi was watching the atmosphere of the times.

The high-growth period was over,
and consumers were starting to seek

"lightness" rather than "heavy things."
So he thought.

"Body" alone is old-fashioned.

But "lightness" alone is unsatisfying.
Then,

couldn't we make something that has both

"a crisp finish and body"?

This is interesting.
Ordinary managers fight within the existing market.
But Higuchi tried to
change the "evaluation axis itself."

And what was born was

the new market of "dry."
This is not just a story about taste.

He commercialized a "new sense of the era."

[Beer's Life is Freshness]

Furthermore, he noticed another essential point.
That was,

"Beer's life is freshness."

It is said that Asahi at the time
was shipping products that had been brewed nearly a week prior.
In other words,
they were already inferior in product strength.

And the freshness was also poor.
They couldn't win like this.

Higuchi noticed that.
No matter how much advertising you do,

old beer is meaningless.
He looked at
manufacturing

↓
logistics
↓
freshness
↓
taste
↓
brand
as a single entity.

So he launched the catchphrase,
"Freshness is life."

This was not just advertising.

It was a declaration to change the "quality structure itself."

[A Factory That Invested Three Times the Normal Amount]

Particularly symbolic was the factory reform.
An ordinary manager would head toward cost-cutting in a deficit-ridden company.
But Higuchi was the opposite.

He invested nearly three times the normal construction cost
to build a state-of-the-art factory.
He had Sumitomo Bank finance the funds.

This is not normal.
But he had conviction.

"Build a factory that won't lose to the world."

The symbol of that was the Asahi Breweries Ibaraki Factory.
He did not see the factory as just manufacturing equipment.

A place to be proud of to the world.
A place where people gather.
A place to experience the brand.

And, in terms of management,
・proximity to the metropolitan area
・highway network
・logistics efficiency
・production capacity to meet huge demand
he gave it,

and designed it as a "base to conquer the Tokyo market"
and a "metropolitan area strategy hub."

Furthermore, he turned the closed-off factory into a

"park-like" space.
Greenery

tour routes
a sense of openness
Moreover, at the Ibaraki factory,

he even had an aerial corridor built so that one could look out over the Tone River.
This was Higuchi's strong insistence.
Factory tours are still conducted by reservation today.
In other words, he turned the factory into a

"brand experience space."

Because he understood that people do not buy based on the product alone.

See the factory.
↓
Trust in quality.

↓
Improved corporate image.
↓
Sense of freshness.
↓
Increased brand value.
Higuchi saw the factory as a
"demand creation device."

[The Great Reversal]

The result was historic.
Super Dry was an explosive hit,
and Asahi recovered rapidly.
Finally, it broke the era of Kirin's dominance.

This became a famous great reversal story
in the history of Japanese companies.

But Higuchi's true greatness
was not the hit product.

It was that he changed the "psychology of a losing organization."

[The Person Known as Kotaro Higuchi]

He was extremely distinctive.

・Super positive
・Rationalist
・Challenge-oriented
・Trusts people
・Strong in underdog strategies

In particular, he hated

the "reasons why it can't be done."

What is even more interesting is that
he was not an industry insider.
That is why he could question existing common sense.
・Should factories be closed off?

・Is it better for beer to be heavy?
・Should freshness be neglected?
・Should the underdog fight on the same playing field?
He questioned everything.

That is why Asahi was able to change.

【Culture Left Behind at Asahi】

Even in the current Asahi,

・Challenge-oriented mindset
・Sense of speed
・Aggressive stance
・Responsiveness to market changes

remain deeply ingrained.
In particular, the culture that

"it is okay to break industry common sense"

is largely influenced by the Higuchi reforms.
He changed not only the products,

but the very "personality of the company" itself.

【The Opponent He Was Fighting】

Hirotaro Higuchi was not just fighting against Kirin.
What he was truly fighting against were
・Feelings of defeat

・Precedent-based thinking
・Deductive evaluation systems
・Industry common sense
・The atmosphere that "the underdog cannot win"
That is why he

・Changed the taste
・Changed the freshness

・Changed the factories
・Changed employee psychology
・Changed the brand experience.
What he was doing was not
"beer sales," but

"corporate atmosphere reform."

【Was This a Strategy?】

Looking only at the results, it is a success story of Super Dry.
However, within it, there is a very strong model.

・The underdog does not fight on the same playing field
・Question industry common sense
・Change the atmosphere
・Change the psychology
・Manage freshness through structure
・Use facilities as brand devices
・Bet on the young
・Balance conflicting values

It is an extremely Asahi-like structure.

And what is interesting is that
he was not looking only at "beer."
Normally, one looks at

Product
↓
Sales
↓
Profit.

But Higuchi was different.
Organizational psychology

↓
Challenge culture
↓
Product innovation
↓
Freshness reform
↓
Brand trust
↓
Market reversal.
In other words, he was trying to change

the "human consciousness structure" itself.

【Summary】

Hirotaro Higuchi was not a man who made beer.

He was a man who built a "challenging organization."

That is why he connected
・Atmosphere

・Psychology
・Freshness
・Factories
・Brand
・Organizational culture
all together.

As a result, Asahi, which was called the Sunset Beer,

changed into the Sunrise Beer.
People around him said,
"It's impossible."

"You can't beat Kirin."

But he did not stop.
Because he understood that

"precisely because you are an underdog, you can change."
And in fact, he
changed the history of Japanese beer.

What Higuchi left behind was

not just a hit product.
It was the very structure that allowed a company that had given up to look forward again.

Next Episode Preview

Great Figures of the World Series | Episode 28: Den Fujita
Founder of McDonald's Japan

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