The Japanese Sake Masters Swimming Against a Rising Tide of Whisky
Squeezed out by highballs and quality Japanese malts, the country’s sake breweries are trying to innovate to win back market share.
4 min
OSAKA, Japan: The Japanese have been drinking sake since the eighth century. Back then, it was believed the rice-based liquor warded off ghosts.
Today, it has a stronger spirit to contend with: whisky.
Enter Nishiya, a bar in downtown Osaka, and you are given little choice of what to drink. You might fancy a glass of sake or a shot of the stronger, more bitter shochu. But regulars will insist you try another, less traditional Japanese delicacy, a highball.
“It was invented in the U.K.,” says the bartender, mixing a glass of whisky, which is spelled the Scottish way here, ice and soda. “But it was perfected in Japan.”
The cocktail has been gaining ground in the country since the late 2000s. It pairs well with the local cuisine, and provides momentary relief in neighborhood taverns, or izakaya, during the country’s hot and humid summers. Between 2015 and 2020, domestic whisky sales increased 50%. Japanese drinkers spent $3.5 billion on the spirit in 2023.
This has left sake producers struggling to find a way to keep the party going. By some measures consumption has fallen by more than 75% since the 1970s, and 30% in the past decade, displaced in part by invasive species—sometimes beer, but especially whisky.
The government in Tokyo has stepped in, introducing a network of brand ambassadors—or “sake samurai”—to help promote the ailing industry. Last year the beverage obtained Unesco world heritage status, like French Champagne or Belgian beer.
But resistance is also coming from the factory floor. Brewers have begun experimenting with new recipes of “craft” sake, adding unusual ingredients to hit hoppy, beer-inspired flavors and floral, gin-like notes. One brewery has developed an Italian-inspired “margherita” sake, blending the umami of sun-dried tomatoes with the amino acids produced during sake’s traditional brewing process.
All this to make the whisky-and-soda brigade look a little staid.
“We want to honor tradition but also create things no one has ever seen before,” said Shuhei Okazumi, founder of the Japan Craft Sake Brewers Association. This community of young, entrepreneurial toji want to upend sake’s image as the drink of a bygone era. Dedicated craft sake bars are now popping up around Tokyo. Festivals debuting new and unusual varieties from around the country are sold-out events.
“They’re like the young, punk-rock generation of sake brewing,” said Monica Samuels, one of roughly a hundred government-certified sake samurai. “For so long, mainstream Japanese culture has told people to blend in. You’re not supposed to be outrageous. The craft sake movement wants to change that.”
They could be in for a long, thirsty fight.
Whisky is now deeply entrenched in Japanese drinking culture. The country’s taste for the amber nectar can be traced back to Masataka Taketsuru, revered as the godfather of Japanese whisky, who traveled to Scotland in 1919 to serve an apprenticeship before returning to help found Japan’s first distilleries. The spirit has had its ups and downs since then, but consumption really took off when people began adding soda and ice.
Takeshi Niinami , chief executive of Suntory, Japan’s largest distillery, says shifting consumption patterns are partly demographic. Japan’s rapidly aging population means health considerations are to the fore of many drinkers’ minds, he says. Sake tends to have a high sugar content.
“When I go out for sushi, I’ll go for a highball. Because sake might be delicious, but I can’t afford the sugar. Sure I can have maybe just one glass, that’s fine. But sake is too good—you can rarely just have one,” Niinami says.
But it also speaks to a turn in local production. Many traditional sake brewers are now pivoting to whisky, attracted not only by strong domestic demand but the high prices premium varieties can command overseas. International awards , marketing campaigns and actor Bill Murray’s turn in “Lost in Translation” have whetted appetites for Japanese whisky to such an extent that a bottle of Suntory’s Yamazaki whisky, aged for 55 years, can set you back close to $1 million.
Yoichiro Nishi, an eighth-generation sake and shochu producer, opened Ontake Distillery in 2019.
Nestled in the foothills of Mount Ontake, Japan’s second-largest volcano after Fuji, the distillery strikes a blend between old and new. Dark timber panels, autumnal maple trees and natural springs recall the traditional tea houses of Kyoto, or the temples of Koyasan, but an angular, concrete walkway, echoing the masters of Japanese brutalism, suggests tradition might be taking a turn.
Inside, burnt-black sherry casks carry a single-malt whisky, now five years old. A first edition was released in 2023, taking gold at the San Francisco Wine & Spirits Competition.
Nishi acknowledges the jump from sake to whisky was far from straightforward. He recalls his fascination with the idea that a drink could improve over time, maturing for five, 10, or 20-plus years. “As a brewer of sake, a drink best consumed fresh, this was an intriguing concept,” he says.
But time is money, and whisky is by nature a waiting game. To get around this, Nishi sells casks before they have matured. While waiting, customers are invited to stay in the distillery, sample a few drams and sink a few holes in Ontake’s on-site golf course. The distillery is open to everyone—everyone who can shell out $50,000 for a cask, that is.
Nishi is one of many newcomers to the industry. In 2016, there were 10 whisky distilleries in Japan. Today there are nearly 130. But an increasingly vibrant market has come at a cost. From record highs in 2022, exports of Japanese whisky have now started falling. Many are worried that an explosion of distilleries is diluting authenticity, with blends of local and overseas whiskies commonly sold under the Japanese whisky brand.
Some are calling for tighter industry regulations. Others insist the rules are made to be broken.
“Creativity has always been vital to the Japanese spirit,” says Brian Ashcraft, an author who has written extensively on Japanese drinking culture. “Any regulation shouldn’t come at the expense of that.”
It is a sentiment shared by the craft sake movement, whose proponents hope new ideas will drive demand both domestically and abroad. Exports have roughly doubled since 2018, with sake breweries popping up around the world, from Taiwan to the U.S. and Mexico, each with their own take on the drink.
Okazumi, the craft brewer, said the new varieties could do for sake what the California roll did for sushi.
“Sometimes tradition needs to innovate to go global,” he said.
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The ASX 200 rose 1.28 per cent in the week ending 30 October as miners rallied, consumer stocks fell and rate-rise expectations climbed
6 min
The Australian sharemarket rose during four of five sessions in the week ending 30 October, but the headline gain concealed a sharp divide between recovering miners, rate-sensitive property stocks and retailers hit by inflation and weaker trading updates.
The Australian sharemarket finished October with a positive week, although the route higher was anything but uniform.
The S&P/ASX 200 closed Friday 30 October at 8,908.1, gaining 112.9 points, or 1.28 per cent, from the previous Friday’s close of 8,795.2.
The All Ordinaries advanced 1.34 per cent to 9,025, while the more concentrated S&P/ASX 20 gained 1.11 per cent.
The benchmark rose during four of the week’s five sessions. It added 0.17 per cent on Monday and 0.46 per cent on Tuesday, before slipping 0.03 per cent on Wednesday. It recovered 0.50 per cent on Thursday and gained another 0.18 per cent on Friday.
The index briefly reached 8,933.3 but again failed to establish itself above the psychologically important 9,000-point mark.
The week’s central tension was between a resources recovery and a less forgiving domestic interest-rate outlook.
Materials gained 4.06 per cent, reclaiming part of the previous week’s heavy fall. Australian real estate investment trusts rose 3.77 per cent, financials gained 1.05 per cent and energy advanced 1.39 per cent.
At the other end of the market, consumer staples fell 5.13 per cent and consumer discretionary shares lost 2.35 per cent. Utilities declined 0.73 per cent and communication services eased 0.68 per cent.
Inflation changes the conversation
Australia’s September inflation data was the week’s pivotal domestic release.
Annual inflation of 4.3 per cent pushed market pricing towards another possible Reserve Bank increase and disrupted Wednesday’s early sharemarket rally.
By Thursday’s close, one widely followed market measure placed the probability of an increase in the cash rate to 4.85 per cent at approximately 80 per cent.
That pricing does not make an increase certain. It does, however, change the framework through which investors assess Australian businesses.
Companies dependent on discretionary household spending face renewed pressure on sales and margins. Property trusts, banks, developers and highly leveraged companies must be considered against the prospect of higher funding costs.
Banks present a more complicated equation. Higher rates can support margins, but they may also slow credit growth and increase arrears.
Miners recover
BHP gained 4.56 per cent across the week to close at $57.56, making a substantial contribution to the benchmark’s rise.
The recovery followed an 8.3 per cent fall during the previous week and helped lift the broader materials sector.
Northern Star Resources added 4.59 per cent, while Goodman Group advanced 6.85 per cent to become the strongest performer in the ASX 20.
The commodities picture was mixed. Gold fell approximately 3.12 per cent on the cited weekly measure, while Brent crude added around 0.68 per cent.
The Australian dollar was little changed at approximately US70.35 cents at the reference point.
Supermarkets and consumer shares retreat
The consumer-staples story was markedly weaker.
Coles fell 11.77 per cent after its first-quarter update, making it one of the largest significant-company declines of the week.
Woolworths lost 3.66 per cent and Wesfarmers fell 4.48 per cent to $76.69 as investors processed company trading commentary against the prospect of another squeeze on household demand.
The moves illustrate how quickly expectations can change when an apparently defensive company disappoints.
Supermarkets still benefit from the recurring need for groceries, but customers can trade down, shift between chains and reduce spending on higher-margin discretionary lines.
Wesfarmers carries exposure to several consumer categories through businesses including Bunnings, Kmart and Officeworks. A renewed rate increase would place more pressure on households already confronting higher prices.
The wider market’s biggest movements
Among companies outside the ASX 20, Mesoblast surged 27.32 per cent, SiteMinder gained 22.74 per cent and Zip rose 22.60 per cent.
The sharpest weekly falls included 4DMedical, down 33.51 per cent; Tuas, down 29.95 per cent; Catalyst Metals, down 17.47 per cent; and Champion Iron, down 13.35 per cent.
Those percentages require context.
The movements in BHP, Commonwealth Bank and other very large companies had substantially more influence on the index than similarly dramatic changes among smaller companies.
A 20 per cent move in a relatively small stock may attract more attention than a two per cent rise in a major bank, but the bank can have the greater effect on the market.
How the ASX 20 moved
The following list uses the S&P/ASX 20 constituents and five-session movements reported at the 30 October close.
Where the component feed did not publish a valid five-day comparison, no figure has been estimated.
BHP Group: Up 4.56 per cent
Commonwealth Bank: Up 1.66 per cent
Rio Tinto: Down 2.20 per cent
National Australia Bank: Up 0.48 per cent
Westpac: Up 0.08 per cent
ANZ Group: Up 1.92 per cent
CSL: Up 2.05 per cent
Macquarie Group: Up 2.19 per cent
Wesfarmers: Down 4.48 per cent
Woodside Energy: Up 1.43 per cent
Goodman Group: Up 6.85 per cent
Telstra: Five-day comparison unavailable from the cited component feed
Woolworths: Down 3.66 per cent
Fortescue: Five-day comparison unavailable from the cited component feed
Transurban: Down 2.40 per cent
QBE Insurance: Down 1.21 per cent
Aristocrat Leisure: Up 0.63 per cent
Northern Star Resources: Up 4.59 per cent
Sigma Healthcare: Down 0.36 per cent
Brambles: Down 1.20 per cent
The companies dominating the conversation
Coles was the week’s standout media-facing company for the wrong reason.
Its trading update produced an outsized repricing and drew attention across the grocery and retail sectors. Woolworths and Wesfarmers were also scrutinised as investors considered how stubborn inflation and another possible rate rise could affect sales volumes.
Bank of Queensland offered a more positive corporate signal.
The bank reported that its FY26 net interest margin had risen six basis points to 1.70 per cent, ahead of the 1.68 per cent expected by the market according to contemporaneous reporting.
Bank of Queensland shares rose 5.8 per cent on Thursday, while the major banks also rallied.
Endeavour Group finished Friday at $3.39, up 4.31 per cent on the day, and released the results of its annual general meeting.
The movement was notable during a week in which investors were highly sensitive to consumer-facing companies. The AGM result should not, however, be presented as the sole cause of the share-price increase without further supporting company guidance.
Mesoblast’s 23.4 per cent Thursday rise and 27.32 per cent weekly gain returned the biotechnology company to the centre of market attention.
For editors, it is important to separate the size of that percentage movement from its influence on the index. Mesoblast was an eye-catching performer, but it did not drive the ASX 200 in the way BHP or Commonwealth Bank did.
Qantas remained part of the broader market conversation as investors watched travel demand and company updates.
However, the primary-source review did not locate a fresh Qantas announcement that justified attributing a major weekly market movement to new company information. The airline should therefore remain on the monitoring list rather than being forced into the week’s causal narrative.
Is Australia’s IPO market reopening?
The official ASX new-listings pipeline remains active but selective.
ASX’s upcoming-floats page included formal applications with offer timetables extending through October and at least one anticipated listing on 30 November.
The exchange notes that its page covers companies for which a formal listing application has been received. It does not represent every company privately exploring a float.
The wider debate concerns whether Australia’s public market is sufficiently competitive when high-growth businesses can pursue capital in the United States or remain privately funded for longer.
ASX has previously raised possible reforms designed to improve the attractiveness of the local market. These include debate about reducing minimum free-float requirements and streamlining aspects of the admissions process.
An enhanced fast-track pathway for qualifying applicants can shorten the review process, reducing the execution risk created when market conditions change during a long IPO timetable.
That does not remove the more fundamental challenge.
New floats still require credible earnings or a convincing growth pathway, sensible pricing and enough genuine free float to support trading after listing.
Investors can already obtain diversified exposure through low-cost exchange-traded funds or buy established, liquid businesses. A float must therefore offer more than novelty.
The current pipeline suggests that the IPO window is open, but it is not indiscriminate.
What investors will watch next
The Reserve Bank’s next decision now sits at the centre of the domestic outlook.
Any change in cash-rate expectations will flow rapidly through banks, retailers, property trusts, listed developers and companies carrying substantial debt.
Investors will also watch whether the materials recovery can continue, whether BHP can hold its rebound and whether consumer companies provide further evidence of slowing demand.
Overseas, technology-sector volatility, commodity prices and the United States interest-rate outlook will continue to shape Australian trading.
The week’s 1.28 per cent headline gain was encouraging, but it was not a broad declaration of confidence.
It was a rotation towards miners, selected financials and property securities—and away from consumer businesses facing a more difficult inflation and interest-rate equation.
Market dashboard
S&P/ASX 200: 8,908.1, up 1.28 per cent for the week
All Ordinaries: 9,025, up 1.34 per cent
S&P/ASX 20: 5,214.7, up 1.11 per cent over five sessions
Best sector: Materials, up 4.06 per cent
Next-best sector: A-REITs, up 3.77 per cent
Weakest sector: Consumer staples, down 5.13 per cent
Major large-cap winner: Goodman Group, up 6.85 per cent
Major large-cap loser: Coles, down 11.77 per cent
AUD/USD: Approximately US70.35 cents at the weekly reference point
Gold: Approximately US$3,885 an ounce, down 3.12 per cent on the cited weekly measure
Brent crude: Approximately US$117.70 a barrel, up 0.68 per cent on the cited weekly measure
As interest rates, inflation and market sentiment fluctuate, investors are being urged to focus on data, not panic.
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