Kirin Brewery Company, Limited

International Directory of Company Histories, Volume 63 (1992) by David Salamie

Kirin Brewery Company, Limited

2-10-1 Shinkawa Chuo-ku Tokyo 104-8288 Japan Telephone: (03) 5540-3411 Fax: (03) 5540-3547 Web site: http://www.kirin.co.jp

Public Company Incorporated: 1907 Employees: 23,070 Sales: ¥1.60 trillion ($14.91 billion) (2003) Stock Exchanges: Tokyo Osaka Nagoya Fukuoka Sapporo London Ticker Symbol: 2503 NAIC: 312120 Breweries; 422810 Beer and Ale Wholesalers; 312111 Soft Drink Manufacturing; 312112 Bottled Water Manufacturing; 312130 Wineries; 312140 Distilleries; 422820 Wine and Distilled Alcoholic Beverage Wholesalers; 325412 Pharmaceutical Preparation Manufacturing; 551112 Offices of Other Holding Companies

Longtime leader of the Japanese beer market, Kirin Brewery Company, Limited in the early 2000s was overtaken by its archrival, Asahi Breweries, Ltd. Kirin nevertheless continues to sell two of the most popular beers in Japan, Kirin Lager (the country's oldest beer brand) and Ichigan Shibori. In the burgeoning happoshu (low-malt) category, Kirin Tanrei is the top seller. In addition, Kirin handles domestic distribution for several foreign brands, including Budweiser and Heineken. Kirin's brewery operations also extend overseas, through strategic alliances, subsidiaries, and affiliates, to China, Taiwan, Australia, the Philippines, Europe, and the United States. The company holds a 46 percent stake in Lion Nathan Limited, a consolidated subsidiary that is based in Australia but has particularly important operations in China. Kirin has also invested a 15 percent stake in San Miguel Corporation, the dominant brewer in the Philippines. With more than 100 years of experience in the brewing business, Kirin now applies its fermentation technology to areas such as plant genetics, pharmaceuticals, and bioengineering. Although brewing and related businesses remain the core of Kirin's activities, the company is also involved in several other sectors: hard liquor, wine, soft drinks, and food products.

Early History

William Copeland, a naturalized U.S. citizen of Norwegian descent, arrived in Yokohama in 1864. Japan had recently reopened its ports to Western commerce, and Copeland hoped to make his fortune there. He first established a drayage (carthauling) business and later a dairy firm; both of these ventures were modestly successful. In 1869, however, responding to the large foreign contingents' demand for domestically brewed beer (Japan had no brewing industry to speak of at this time), Copeland opened the Spring Valley Brewery. In 1872 Copeland left Yokohama temporarily to search for a bride in Norway; later, he returned with his wife, but she died in 1879. Shortly thereafter Copeland, who seemed dogged by misfortune, found that he lacked the necessary capital to improve and expand the business. By 1884 he had closed the brewery and sailed for the United States.

A year later W.H. Talbot and E. Abbott, both foreign entrepreneurs, entered into partnership with two Japanese businessmen, Yonosuke Iwasaki and Eiichi Shibusawa, to reopen Copeland's brewery. With sound financial backing, the newly formed Japan Brewery Company, Ltd. soon became a profitable enterprise. By 1888, all of its beer carried the "Kirin" label. According to ancient Chinese legend, the Kirin, which is half horse and half dragon, heralds good fortune to those able to catch a glimpse of it.

Although Copeland's association with the company that would one day control a major share of the Japanese beer market was relatively short and difficult, he is credited with founding the only Yokohama brewery that has survived until the present with some degree of continuity. Copeland returned to Yokohama during the late 1880s to open the Spring Valley Beer Garden next door to his old brewery. He operated his establishment with a new wife, but it was not a success and he again left Yokohama. He returned once more in 1901 and died a year later. To this day, however, employees pay tribute to the founder by leaving cans of Kirin beer at his grave.

Initially, many foreigners were involved with the company: Americans and Englishmen filled the executive ranks and German technicians supervised the brewing process. Over the years, however, their presence gradually diminished. By 1907, when the firm was incorporated as Kirin Brewery Company, Limited, management had been taken over entirely by the Japanese; the company was purchased that year by the Mitsubishi family, marking the beginning of Kirin's affiliation with the Mitsubishi keiretsu. It was not long before Kirin began to expand rapidly; in 1918 the company constructed a brewery in Amagasaki and later built another facility to house the operations of the Toyo Tozo Company, which Kirin had taken over.

In 1923 the Great Kanto Earthquake destroyed most of the company's facilities in Yokohama, including its main brewery. Kirin, however, soon built a new brewery at a different site in Yokohama. In 1929 Kirin opened its own bottling factory, the Yokohama Bottle Plant. It was clear by this time that the novel attraction of beer had developed into a large market demand; Kirin achieved record sales figures during the mid-1930s.