Cocktail hour patrons at Hakkasan bar and restaurant in San Francisco are as apt to try a Chinese Mule with Hangar One vodka and Masumi Okuden junmai sake as they are to order a Martini or Gin and Tonic. Sake, once relegated to generic warm offerings in sushi restaurants, has been reborn as an intriguing ingredient in everything from handcrafted cocktails to gourmet food pairings. The new generation of sake drinkers is responding to higher-priced, top-quality expressions showcasing sake’s many variations. They’re driving growth in the category and trying sake with different foods, breaking sake out of the sushi-pairing cliché.
Consumers, most notably millennials, “gravitate toward interesting pairings,” says Hakkasan San Francisco beverage director Peter Mastrogiovanni. “They don’t want their parents’ Chardonnay or Merlot. They’re more intrigued by sake.” The 170-seat restaurant features 15 sakes in 720-ml. bottles, from Masumi Okuden Kantsukuri junmai ($68) to Dassai 23 junmai daiginjo ($210). Sake by the carafe is also popular, notably the Tamagawa Kinsho daiginjo ($30 a 6-ounce carafe; $118 a 720-ml. bottle), which is similar to a Sauvignon Blanc, and the Kamoizumi Shusen junmai ($20 a 6-ounce carafe; $95 a 900-ml. bottle), a more aromatic style that’s served slightly warm.
Sake has been on a transcendent path, carried along by sushi’s popularity in the United States and the general American attraction to all Japanese cuisine. According to Impact Databank, overall sake consumption in the United States rose 3.9 percent to 2.22 million nine-liter cases in 2013, with imported shipments jumping 13 percent to 516,000 nine-liter cases and domestically produced sake rising 1 percent to 1.7 million cases. Top-selling brand Sho Chiku Bai, marketed by Takara Sake USA, commands a 27-percent share of the category, advancing 1 percent to 587,000 cases last year. No.-2 brand, Gekkeikan, handled by Sidney Frank Importing Co., grew 3.2 percent to 450,000 cases and comprises 20 percent of the market. Shipments for the third-largest sake, Ozeki, increased 9 percent to 410,000 cases, while the fourth-largest label, Numano, decreased 13 percent to 252,000 cases. Meanwhile, Nielsen supermarket trends for the 52-week period ended January 4th showed that U.S. dollar volume rose 8.4 percent to $15.8 million—an indication that consumers are moving upmarket.
“Over the last 10 years, Japanese cuisine has gotten so popular, and sake has grown along with it,” says Yoshi Yumoto, vice president and Gekkeikan national sales manager for Sidney Frank Importing Co. “Sake has no sulfites and is gluten-free. Those attributes appeal to the health-conscious consumer, and young customers like it because it’s trendy.” Yumoto anticipates another year of “steady” 5-percent growth, with sales equally split on- and off-premise. California is Gekkeikan’s largest market, with Texas second. “Texas was recession-proof and Japanese food is getting popular there,” Yumoto notes.
Sidney Frank has more than 100 salespeople who educate consumers about sake at local food and wine events and festivals. “We’re introducing consumers to sake via cocktails,” Yumoto says. “We’re also teaching sake drinkers that it can be consumed chilled. For 25 years, people thought sake had to be hot.”
Gekkeikan markets 16 SKUs in the United States, and its top-selling junmai is produced in Folsom, California, under the direction of brewmaster Yuji Ioka. The junmai—a basic sake that’s milled to remove 30 percent of the rice jacket—is a popular staple in the 750-ml. bottle size and sells well at Safeway ($5.99) and Trader Joe’s ($4.49).
Another Gekkeikan success is Zipang, a 7-percent alcohol-by-volume (abv) sparkling sake that’s made in Japan’s Kyoto prefecture and marketed in a 250-ml. bottle (retailing off-premise for $7)—a hit in nightclubs and Champagne lounges. This beverage appeals to non-sake drinkers, particularly younger, female customers. “We like to sell Gekkeikan everywhere, not just to Asian accounts. Sparkling sake is a good way to get into non-traditional accounts,” Yumoto says.
Top competitor Takara Sake USA is getting a strong response with upscale and unique products, in addition to its best-selling Sho Chiku Bai junmai. Sake producers need to expand the U.S. market since the sake drinking population in Japan has dwindled, says Takara Sake USA marketing manager Izumi Motai. In the United States, Takara offers 12 versions under the Sho Chiku Bai brand, which has a domestic brewery in Berkeley, California.
“Domestic sake had left a poor impression, so we have to reintroduce it as an improved product,” Motai says. Ginjo—which is at least 40-percent milled—is “new age sake and behaves like a white wine,” he explains, adding that domestically produced ginjo is appealing to young connoisseurs who are willing to pay higher prices. “It’s floral and fruity, with a wonderful nose that’s well-liked by wine lovers,” Motai notes.
Japan-produced ginjo and daiginjo—which is at least 50-percent milled—are also very important in expanding the premium category, Motai says. Takara markets an imported daiginjo at $60 and a domestic version at $40. The company’s Sho Chiku Bai Nigori unfiltered sake ($6.99 to $7.99 a 750-ml. bottle) is also doing well. “Ours is sweet but clean, without a heavy lingering sweetness. Consumers in the fanciest restaurants love it,” Motai says. Sushi Ran, a highly-rated Sausalito, California, restaurant, serves Sho Chiku Bai Nigori for $7 a 5-ounce glass, $18 a 16-ounce carafe and $38 a 1.5-liter bottle.
Going Upmarket
According to Nielsen, Ty Ku is the fastest-growing sake in the United States, with a 68-percent increase in units year to year. Freed from any history or entrenched brand image, the relative newcomer has zeroed in on the young, experimental consumer. Enlisting celebrity chef Ming Tsai as the face of its sake portfolio, Ty Ku has leveraged the trading-up trend, created non-traditional modern packaging and positioned the brand as a health-conscious alternative to white wine. Tsai appears at food and wine festivals and shows consumers how sake can be paired with many dishes. “We’re targeting millennials, and we’re also migrating traditional, ultra-premium white wine drinkers over to sake,” explains Sean Hartnell, vice president for Ty Ku’s central region.
Ty Ku began as an on-premise brand with the launch of its citrus-flavored liqueur in Las Vegas casinos and is now putting more emphasis on its sake offerings as the category experiences steady growth. “Our clear priority is driving our sake business,” Hartnell says. Last year, the company’s national advertising centered on the citrus liqueur promoted by musician CeeLo Green, but this year, the print ads are focusing on sake and Tsai, Hartnell notes.
For World Sake Day on October 1st, the start of the brewing season in Japan, Ty Ku orchestrated more than 1,000 on- and off-premise events in the United States, with everything from bar kits and tasting materials to buybacks. “Our goal is to move away from the Sake Bomb image and sake served in small ceramic glasses. We want people to consume the sake in ultra-premium white wine glasses,” Hartnell explains.
Ty Ku sake’s volume is now at 100,000 (4.5-liter) cases nationally, with 54-percent growth through December 2013 over the previous year. Sales are split 65-percent off-premise to 35-percent on-premise, and tier prices range from $15 to $70. Dominant markets are Florida, California, Illinois, New York and Texas. Hot sellers are its Ty Ku Black junmai ginjo ($20 to $25 a 720-ml. bottle) and its Coconut Nigori ($15 to $18), popular in sake cocktails. The brand’s Low Cal Colada, mixing Coconut Nigori and pineapple juice, is only 99 calories. “We’re not gender-based,” Hartnell notes. “We appeal to anyone who is health-conscious.”
Ty Ku is also seeing strong sales in its soju offering ($20 to $25 a 750-ml. bottle), a 20-percent abv distilled spirit that has 60 calories a 2-ounce pour—roughly half the calories and alcohol content of popular vodkas. The soju is becoming a trade favorite, used in traditional vodka-based drinks, such as a Bloody Mary or Cosmopolitan, Hartnell says.
Also driving ultra-premium sales is The Winebow Group, which imports nine premium sake brands. Winebow markets 12 SKUs ($16 to $260 a 720-ml. bottle), with the average national retail price at $30, says sake brand manager Midori Roth. Business centers on specialty wine shops and high-end restaurants, such as Jean-Georges and The French Laundry. Premium sake as a category is up 12 percent, while non-premium grades are up 6 percent. “It mirrors the wine trade, where the higher-end wines are doing better,” Roth says.
A new Winebow entry and a sellout this year is the Dewatsuru Sakura Emaki ($17.99 a 360-ml. bottle), with a sweeter profile and a natural rose color from the purple rice that’s used. Another hot seller is the Hideyoshi Flying Pegasus Koshu daiginjo ($260 a 720-ml. bottle), packaged in a gold leaf collector’s bottle.
While sales are strong in major markets, the smaller markets remain a challenge, Roth notes. “We’re still getting past the old image of sake being served hot. Our distributors are helping launch a grassroots education effort. We’re making sake more approachable and fun with sake flights and translating from Japanese so people can pronounce the words,” she says.
On-Premise Interest
Mina Group and Kabuki Restaurants are among on-premise accounts that prove sake can be consumed as easily as a cold beer. “It is a matter of getting our guests to taste sake,” explains Mina Group beverage director Daniel Grajewski. “People are scared to commit money when they don’t know the product. In our sake book, we use familiar descriptors like strawberry, melon or hay.”
In San Francisco, Mina Group’s Pabu restaurant, which opened in July, offers happy hour specials, such as Momokawa Organic junmai ginjo on draft for $5.88 a 4-ounce pour and Funaguchi Kikusui Ichiban Shibori Nama Genshu honjozo for $8.88 a 200-ml. can. Pabu has 11 sakes by the glass, from Momokawa Organic junmai ginjo ($8 a 4-ounce pour) to Tsujizenbei Tobingakoi junmai ginjo ($23). It offers close to 60 sakes by the bottle, from the Asahiyama junmai ($41 a 720-ml. bottle) to the Kyokusen junmai daiginjo ($326 a 720-ml. bottle). Pabu is also using sake in cocktails such as the Summer ($12), made with Momokawa junmai sake, pickled strawberry juice, togarashi and fresh lemon juice.
Sake could be doing even better in sales, says Yuji Matsumoto, a master sake sommelier and beverage director for the 17-unit Kabuki Restaurants, based in Burbank, California. “Sake isn’t growing fast enough in mainstream non-Japanese restaurants,” Matsumoto says. “It can go with a cheeseburger or any other food. It depends on the body, acidity level and aroma, just like wine.” He advocates labeling sake bottles in English and offering pairing ideas. Kabuki features a popular sake sampler ($13.95 for three 2-ounce pours), which includes Ty Ku Coconut Nigori, Otokoyama and Kubota Senjyu. Also on the list are Saketinis ($8.50), Sakeritas ($6.95), the shochu-based Tokyo Mojito ($8.50), Sake Sangria ($7.50) and sake by the glass ($4.95 to $6.95 a 3-ounce pour) or bottle ($13.95 to $24.95 a 300-ml. bottle; $54.95 to $57.95 a 720-ml. bottle). Kabuki also does a brisk business in Sake Bombs ($7.50 to $10.50) in the college town of Tempe, Arizona.
Niche Sell
“Sake is still a niche category and seems to be following craft beer trends with its diversity of styles,” says Bob Paulinski, senior vice president of wine for Beverages and More. “Customers under the age of 35 want to know a lot more about what makes the product unique. It enhances the enjoyment level.” BevMo’s sake sales are mostly under $20 a 750-ml. bottle, although the chain is seeing improved sales in the $20-plus range in larger metropolitan markets. At over $40, store expertise is vital and it’s very much a hand-sell, he says. Strong sellers are Momokawa Organic junmai ginjo and Momokawa Pearl nigori genshu (both less than $15 a 750-ml. bottle), Ty Ku Coconut Nigori ($15.99) and Hakutsuru Draft ($6 a 300-ml. bottle). Sakes labeled “draft” are seeing increased demand, since “it has the persona of being fresher and livelier in style,” Paulinski says. He anticipates 5-percent annual growth in the sake category this year.
Retailers are finding success in using the hand-sell approach and educating consumers on the nuances of sake, creating analogies to beer and wine to make buyers more comfortable with a purchase. Beau Timken opened his San Francisco True Sake store in 2003 and says his customers were “disenfranchised wine drinkers” who didn’t know how to talk about sake. He developed taste match cards so customers could relate their preferences in beer or wine to sake expressions. “You must tell a story about sake, and people in my store can become champions of their own palate,” he explains. True Sake has 250 labels and sells a lot of 300-ml. bottles ($6 to $25), a trial size that new sake customers like. About 85 percent of sales are in the 720-ml. bottle size and range from $18 to $185. Best-sellers include Narutotai Red Snapper nama genshu ($36), Dewazakura Oka ginjo ($36) and Born Gold junmai daiginjo ($38). Timken and his partner, Stephen King, are planning to open a new sake tasting bar and small plates restaurant in early 2015. The cuisine will offer non-sushi dishes to pair with sake.
Unique, hand-sell products are also mainstays of the New York City store Ambassador Wines & Spirits, which carries up to 170 sake SKUs, priced from $10 to $450. Owner Lenny Phillips says his customer base has evolved from an Asian population to travelers who come back from Japan with knowledge of sake regions. Good sellers include the Masumi junmai ginjo ($35 a 720-ml. bottle), a delicate yet dry style with floral characteristics, and the Ichishima brand ($30 to $50), which is an earthier, more traditional sake.
Motai of Takara Sake USA believes that establishing terroir will help further promote consumer acceptance of sake. The category is showing promise as an upmarket alternative to white wine, and emphasizing regional differences could be key.