TOKYO • Brewery executive Kosuke Kuji brought his best sake to a New York booze showcase 16 years ago hoping to promote high-end Japanese rice wine to a new generation of sophisticated foreign drinkers. They were a little disappointed.
It was not that sake from his Nanbu-Bijin brewery failed to live up to its rating back home as Junmai-Daiginjo, the name given to premium grade vintages. But for aficionados of traditional grape-based wines, the local appellation that produces the main ingredient can be almost as important as the final product - think Napa Valley in California, Bordeaux in France or Chianti in Italy.
In 2001, most of the rice used in Nanbu-Bijin sake came from the prefecture of Hyogo. That is 1,000km south of where the beverage was made in Iwate, on the northern tip of Japan's main island of Honshu. So, when a sommelier at the New York event learnt from Kuji where the ingredients came from, the American wine expert seemed let down that the sake was not a more artisanal product.
"He wanted sake made from locally grown rice, just as he likes wine out of its vineyard," Mr Kuji, the 45-year-old president of Nanbu-Bijin, said.
For him, the experience showed the importance of what is known in the wine-making world as terroir. It is a word that the industry uses as a mark of unique regional characteristics and farming practices. The designation can also enhance the value and the appeal of different vintages.
After he returned to Japan, Mr Kuji began a collaboration with farmers in Iwate to develop and produce a rice variety exclusively for the family-run brewery. Now, about a third of Nanbu-Bijin sake is made from local grain - just in time for a surge in Japanese exports that is helping to offset a drop in domestic consumption.
Last year, Nanbu-Bijin generated about 100 million yen (S$1.2 million) in foreign sales, amounting to 15 per cent of its total revenue. Shipments were made to 34 markets, including the United States, France, China and Nigeria. That is up from zero two decades ago, and Mr Kuji says he is targeting 30 per cent of sales in five years.
"In overseas markets, consumers who love to drink wine also show interest in tasting sake," he said.
Sake is becoming more appealing to wine fans outside of Japan, he said. But to keep winning converts, the industry needs to adopt the terminology and promotional techniques of traditional vintners, he said. One example would be developing pairings with specific foods, kind of like how wine makers pitch reds with meat and whites with fish.
"When I drink a glass of sake, I can think of the best French food to have with it," said Mr Olivier Huet, a 45-year-old Frenchman who was qualified as a sake sommelier in 2015 by Sake Service Institute in Tokyo. "As Europeans love to have sushi and white wine, they should want to try sake with cheese."
Mr Kuji is not alone. Brewers across Japan are looking to boost foreign sales and are shifting the way they make and sell sake, particularly in the north-east region known as Tohoku, the largest rice-growing region and a major sake producer.
The Agriculture Ministry began a Tohoku Sake Terroir Project that matches brewers and farmers to develop new products. The programme is intended to help revitalise a region hit hard by the record earthquake and tsunami that caused a meltdown at the Fukushima nuclear plant in 2011.
Domestic consumption of rice and sake has been declining as Japan's population ages and the number of people in the country shrinks. Consumers also are eating more Western food. To support domestic farmers, the government set a target in 2013 of more than quadrupling exports of rice and rice-based products to 60 billion yen by 2020.
In the 12 months ending in March last year, sake consumption in Japan was 556 million litres, down 67 per cent from a peak in 1976 of 1.68 billion litres, according to the National Tax Agency. Rice demand is down 37 per cent at 8.41 million tonnes, compared with the peak in 1963, according to the Agriculture Ministry.
Sake exports expanded 156 per cent to a record 15.6 billion yen last year from 6.1 billion yen a decade earlier, government data shows. The US was the largest importer last year at 5.2 billion yen, followed by Hong Kong and South Korea. In the same period, rice exports rose to 2.7 billion yen from 1.2 billion yen.
Shipments of alcohol could keep growing after Japan and the European Union agreed this month to eliminate tariffs on imports of sake and wine in bilateral trade talks. Japan imposes a 15 per cent, or 125 yen-a-litre, tax on wine imports, while the EU levy on sake is a maximum €7.70 (S$12) for every 100 litres.
While exports last year rose to a record for a seventh straight year, foreign sales of sake remain a small portion of total demand. This year, sales in Japan will be 516.3 million litres, according to data from researcher Euromonitor International. The global wine market is 55 times larger.
In an attempt to narrow the gap, sake brewers are developing alternative drinks, including a sparkling wine called Awasake. Mr Kuji and eight other brewers established the Japan Awasake Association in November to promote the bubbly concoction. The group also set strict quality standards, including the use of only Japanese rice.
At the world's biggest sake competition in Tokyo last month, Nanbu- Bijin's Awasake was voted the best sparkling drink among 1,730 bottles, including 22 made by overseas brewers.
Rising sake exports are a potential lifesaver to Japanese rice farmers. The government will end state control of rice production at the end of this financial year. The change could mean too much supply and lower prices, so growers need more outlets to sell, said Mr Ryoichi Itsukaichi, a 60-year-old farmer in Ninohe.
"We can sell sake-rice at prices more than 10 per cent higher than ordinary food varieties," said Mr Itsukaichi, who heads the group of farmers who supply Nanbu-Bijin with the Ginotome rice they grow on 11ha paddies.
"We are lucky. We can grow rice for award-winning sake."