The Saga off Rising Suntory

Attracting some customers away from the three-sake lunch

"Work hard, drink hard" is not exactly a national motto, but the Japanese seem to do both with rare dedication. Last year they spent a staggering $17.8 billion on alcoholic beverages, up fivefold from ten years ago. Of the $222 that the average Japanese adult invests in hard stuff every year,* 42% goes for beer and 31% for sake (rice wine). What is remarkable is the rise of a Western spirit: whisky. It accounts for 20% of all alcohol sales and comes in scores of brands, more than half of them made in Japan.

The main force behind this whisky rebellion is Keizo Saji, 59, the professorial chairman of Suntory Ltd. He and his family own Suntory still, pot and barrel. Last year the company's after-tax profits are estimated to have reached $57 million on sales of $2.8 billion. With volume last year of 26 million cases of Scotch-type whisky, Suntory not only commands 64% of Japan's whisky market but also claims to be the world's leading private distiller.

Saji's father, who started as an Osaka wine importer, began touting Scotch half a century ago. At the time, it was an exotic import favored notably by Japanese naval officers, who had picked up the taste from British seamen. He opened the first Japanese whisky distillery, using as working drawings for the equipment rough sketches of pot stills brought back from Scotland. Lighter and possessing slightly more body than most Scotch whiskies, premium 84-proof Suntory brands, which almost all Japanese drink mixed with water or soda, are deemed by many experts to be first-class blends.

After his father's death in 1962, Saji took over and launched an aggressive drive to persuade Japanese to drink whisky instead of sake with their lunch.

Among other tactics, he used such Western personalities as Sammy Davis Jr. to tout Suntory on TV. Some Suntory salesmen were attacked by knife-wielding chefs outraged at the attempt to Westernize the traditional Japanese cuisine by urging diners to drink Scotch instead of sake. But today millions of homes and almost every bar and restaurant stock at least some of Suntory's 15 brands. In price and quality, they range widely. The pedestrian Torys costs $2.25 a fifth, while Suntory's best, called The Whiskey, goes for a heady $250. Most popular brand: Suntory Old, which retails for $11.75 and comes in a distinctive black potbellied bottle. (The prices are slightly higher in the U.S.)

Unlike most Japanese businessmen who rely on consensus management, Saji constantly dares his 3,700 employees to express their individuality and come up with "breakthrough ideas."; Says he: "Out of a rigid consensus system, no good ideas can emerge."; One of Saji's ideas was to promote his company's beer and wine as well as whisky through franchised Suntory Pubs; 30,000 of them now dot Japan. He also opened a computerized distillery in 1973 near Mount Fuji. With only 75 employees, it turns out 11.8 million gallons a year, or 60% of Suntory's malt whisky production.

Celebrating his firm's 80th anniversary this year, Saji spent $7.5 million to set up a Suntory foundation that aims to better define for foreigners Japan's political, cultural and economic role in the world. That gesture probably was not purely philanthropic. Suntory's U.S. sales are minuscule, less than 50,000 cases last year. Saji's hope is that the foundation will enhance Suntory's presence--and possibly sales--in the world's richest and most sought-after market.

* By comparison, American adults spend an average $249 each.

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