Dassai: Opening a Sake Brewery in the United States

The Japanese sake market witnessed a 40-year decline, fueled by shifting consumer preferences and an aging customer base. Asahi Shuzo Co. Ltd. (Asahi Shuzo), a once-struggling brewery from Yamaguchi, defied the trend with the success of its singular brand of sake, Dassai. By 2022, under the leadership of the founder and chairperson of the company, Asahi Shuzo’s sales surpassed ¥ (yen) 16.5 billion, marking a phenomenal 165-fold increase since 1984. Expanding into 20 countries by 2016, the company aimed for a 50:50 revenue split between sales brought in from its Japanese market and sales brought from its overseas markets. In 2017, Asahi Shuzo’s president and fourth-generation owner embarked on a bold venture—to construct its first overseas brewery in New York. Initially estimated to cost ¥1 billion, by March 2023, due to delays related to COVID-19, the costs increased to ¥8 billion. The opening of the Dassai Blue Sake Brewery in New York in October 2023 raised questions about what the global market’s impact would be on Dassai as a premium sake brand. As the brewery in the United States became a reality, challenges and uncertainties unfolded, shaping the narrative of Dassai’s strategic evolution.

This case is intended for senior undergraduate, graduate, and postgraduate students taking courses in marketing, brand management, integrated-marketing communication, global business strategy, new market entry, and total quality management. This case is designed to show the challenges and opportunities of expanding a premium sake brand that is innately tied to its country of origin and embracing overseas production when domestic capacity approaches its limit. When a premium brand expands its business to include local production in a foreign country, how does it maintain product quality and brand image? Students are going to study how country-of-origin impacts consumers’ purchasing behaviour, especially their choice of premium brands and luxury products. After working through the case and assignment questions, students are going to be able to do the following:<br><br><ul><li>Understand how country-of-origin contributes to product value and consumer perception, especially for a premium brand or brands considering offshore production.</li><li>Explain the range of marketing and strategy issues that need to be addressed in order to produce a nationally branded product in a foreign country.</li><li>Define the challenges of managing the quality of high-end alcoholic beverages in a foreign country.</li><li>Explore critical factors for companies in deciding whether to enter a new market and how doing so may affect brand equity, as well as its unique selling proposition.</li><li>Understand how a business achieves value innovation by utilizing the eliminate-reduce-raise-create grid.</li></ul>

• sake market
• Dassai brand
• Asahi Shuzo
• premium sake
• global expansion
• brand management
• market entry
• product quality
• brand image
• country-of-origin
• consumer perception
• luxury products
• overseas production
• marketing strategy
• brand equity
• value innovation
• ERRC grid
• new market
• strategic challenges
• alcoholic beverages