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Sapporo Breweries to be Japan’s first firm to label products with their carbon footprint

September 11, 2008
By Ken Worsley


In a move I’m deeply cynical of, Sapporo Breweries has announced plans to begin labeling its products with their “carbon footprint.” According to the Mainichi, Sapporo estimates that a 350 milliliter can of Black Label beer represents 161 grams of carbon emission, once grain output, fertilizers, transportation and the production and recycling of the aluminum can itself are taken into account.

Sapporo is not alone in engineering this superficial marketing ploy environmentally friendly policy. The Ministry of Economy, Trade and Industry is looking to push a carbon footprinting system onto private firms, though it still has not agreed upon a methodology or standardized labeling system. Sapporo, on the other hand, needs to grab all the attention it can get in Japan’s saturated beer market, as the firm is in danger of losing it’s third-place market share position to rival Suntory (if it hasn’t already). Suntory has posted strong sales thus far this year, as Japan’s other major breweries raised their prices back in April but Suntory held off until September 1. Last month, Sapporo revised its sales forecasts for 2008 from a 2% drop to 6%.

Beer sales at Japan’s three largest breweries fell 8.8% in August, while #4 firm Suntory posted a 26% rise in sales in that same month. Will Suntory be able to hold on to all those new customers, now that the price hikes have kicked in?

Sapporo has also come under new pressure from US hedge fund Steel Partners, which has sent a letter to the firm’s board of directors, requesting that terms be laid out in order to allow Steel to up its equity stake in the brewer. Steel Partners is currently Sapporo’s largest single shareholder, and holds an 18.6% equity stake in the company. In March, Steel Partners announced that it intends to boost its share to 33.3%.

Steel Partners is actively seeking ways to improve the firms performance, but is finding no audience yet amongst the board. In the letter, Steel Partners made the following five points:

  • Sapporo recently reduced the 2008 sales targets for its core domestic beer segment.
  • Sales for the first six months of 2008 were 9% lower than in the comparable period in 2007, compared to a drop of only 4% in the Japanese beer market year-over-year.
  • Sapporo’s Japanese market share recently fell to 4th place. In 1988 Sapporo was the #2 beer company in Japan.
  • Sapporo had not yet announced a plan to create value at the Osaka brewery, 16 months after its closure.
  • Sapporo had not yet announced how its real estate partnership with Morgan Stanley will create value for all shareholders.

We’ll certainly be watching this story unfold. Meanwhile, over at the website of Sapporo brand Yesbisu, you can watch a video showing how to make a “real half” out of Yebisu and Guinness. I guess there’s no market yet to import Harp. At least it’s not a Belgian half en half, which is apparently a mix of white wine and champagne.

(Literary buffs out there might remember hálf en hálf from the old Norse poem Gylfaginning, where Hel, the ruler of the Norse underworld, is described as being recognized by her half blue-black and half fleshtone color, in part 34.)

Filed Under Business, METI, Marketing 

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Comments

13 Responses to “Sapporo Breweries to be Japan’s first firm to label products with their carbon footprint”

  1. Alex on September 11th, 2008 10:51 am

    The “carbon footprint” buzzword is the new “eco” is the new “minus ion”.

  2. japannewsjunkie.com on September 11th, 2008 12:40 pm

    Sapporo Breweries Japan’s first firm to label products with carbon footprint…

    The brewery came up with a “lifecycle assessment” of a 350 milliliter can of Black Label beer by measuring the output, level of fertilizers used and so on at each of its 2,000 or so contracted farms, calculating the cost of transport for both raw ing…

  3. Sapporo Breweries to put carbon footprints on product labels | Japan Probe on September 11th, 2008 2:30 pm

    […] More details at Japan Economy News. […]

  4. WG on September 11th, 2008 6:46 pm

    The Ministry of Economy, Trade and Industry is looking to push a carbon footprinting system onto private firms, though it still has not agreed upon a methodology or standardized labeling system.

    This is absurd. Is this supposed to make Japan look better on environmental issues or make the government look like it is adding more yen to the cost of doing business in Japan?

  5. Ken Worsley on September 11th, 2008 8:15 pm

    Alex,

    Good point. “Minus ion” is simply a scam, plain and simple. “Eco” is a marketing term meant to lure those who want to fool themselves into thinking they live some sort of bucolic lifestyle in the big city. “Carbon footprint,” however, is much more dangerous, since it is something the government is trying to push on private businesses. How much will it increase their costs? How much will this hurt wages?

  6. Earth First on September 11th, 2008 9:02 pm

    Ken, So you would oppose companies listing ingredients and nutritional information on their labels because it “increases costs”?

  7. Ken Worsley on September 11th, 2008 10:22 pm

    Earth First ,

    Ken, So you would oppose companies listing ingredients and nutritional information on their labels because it “increases costs”?

    Did I say that? No. You’re reaching hard, and coming up with nothing.

    Try again, without the red herring.

  8. Ponzi on September 12th, 2008 12:03 am

    METI is going to force companies into this? It seems that they love pouring scorn on the nations corporations.

  9. yoji on September 13th, 2008 4:49 pm

    Will this help the bottom line? That’s really all that matters. It’s fake and cynical, but people might buy into it. But I think they care more about the calories than the carbon.

  10. john on September 19th, 2008 4:57 pm

    I seem to recall Steel Partners also demanded that Sapporo Breweries appoint an “internationally respected banker” to their board. Considering the events of the past week I wonder where they intend to find one. Plenty of bankers looking for a new job, but respected bankers ? hmmmmm tricky one.

  11. Ken Worsley on September 20th, 2008 1:14 am

    sigh…

    john, there are plenty of them. How about Dave Einhorn, just to get the ball rolling? Not that he’s exactly looking for a job right now.

  12. mike on September 20th, 2008 1:49 am

    Don’t tell me you’ve been reading Einhorn all along and keeping quiet on what he has to say here. That would piss me off.

  13. Ken Worsley on September 20th, 2008 2:18 am

    Well, get pissed off then.

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