Kirin Beverage has completely revamped the flavor, package design, and containers of its top-selling tea beverage brand, “Kirin Afternoon Tea,” for the first time in six years since 2018. This includes the Straight Tea, Milk Tea, and Lemon Tea varieties. In advance of the nationwide release on June 18, 2024, the “Afternoon Tea Strategy Presentation” was held.
- Kirin Beverage’s Unique CSV Management
“Kirin Afternoon Tea not only offers delicious tea beverages but also contributes to solving social issues,” says Kazuhiro Inoue, President of Kirin Beverage. He introduces Kirin Beverage’s unique CSV (Creating Shared Value) management, which includes the Afternoon Tea brand.
The domestic beverage market is expected to shrink due to the declining population. While there is potential for the market to improve through increased inbound demand and expanding health needs, the “future outlook remains uncertain and challenging.” In such an environment, which is expected to persist, Kirin Beverage believes that “realizing CSV (Creating Shared Value) by maximizing Kirin’s strengths is essential” for the company to be loved by consumers and to survive.
CSV stands for “Creating Shared Value,” which aims to solve social issues while generating economic value, making it the next driving force for growth. “The Kirin Group promotes CSV management through various foods, services, and initiatives, and each employee has the power to practice CSV,” says Inoue. Among them, Kirin Beverage is a company that provides value to a wide range of people, from children to adults, through its soft drinks, and it plays a leading role in CSV management within the group.
At Kirin Beverage, driven by the desire to “contribute to the health of our customers’ minds and bodies through delicious beverages,” we have established the “Delicious Health in Your Daily Life” [Promise to Our Customers] as the overarching concept for all our business activities. Recognizing the significant and crucial role the company plays in supporting the growth of the health science business advocated by the Kirin Group, Inoue emphasized that the mindset of employees is essential for advancing Kirin Beverage’s CSV.
Furthermore, he pointed out that “strengthening the collaboration between the field and the headquarters is also important.” It is necessary to quickly implement the PDCA cycle by sharing issues identified in the field with the headquarters, formulating appropriate strategies, and deploying them in the field. “To realize strategies, it is crucial that the blueprint envisioned by the headquarters is communicated to the field and executed with a solid understanding.” In the medium to long term, he also revealed the intention to promote bottom-up initiatives, where new CSV projects are proposed from the field.
In 2024, Kirin Beverage will accelerate its transformation towards a robust business portfolio with a focus on health science, based on our [Promise to Our Customers] for sustainable growth. To build a strong brand centered on CSV and enhance profitability, we have set two key priorities: “Building a Robust Brand that Realizes Delicious Health” and “Strengthening the Business Foundation that Supports Sustainable Growth.” To achieve “Building a Robust Brand that Realizes Delicious Health,” the company plans to expand its health science beverages, such as those containing plasma lactic acid bacteria. Additionally, new value propositions will be introduced from the core brand “Afternoon Tea” to further enhance and revitalize the tea category, making it even more attractive.
From “Afternoon Tea,” which leads the Japanese tea market as the number one brand in the category, Kazuhiro Inoue, President and CEO of Kirin Beverage, stated that it is not an exaggeration to say that it is the DNA of Kirin Beverage. In order for “Afternoon Tea” to further grow and establish tea culture in Japan, throughout 2024, the company aims to provide drinking experiences that convey the high quality and richness inherent in tea. As part of this effort, the core products of “Afternoon Tea,” including “Straight Tea/Milk Tea/Lemon Tea,” will undergo a significant refresh in terms of taste, packaging, and container for the first time in six years, and will be released on June 18th.
In addition to these three products, “Afternoon Tea” will also showcase the appeal of tea through new approaches. Tea leaves from Sri Lanka, which are used in part for “Afternoon Tea,” are beloved worldwide for their high quality. This year, by promoting tea leaves from Sri Lanka, the brand aims to firmly emphasize the quality of “Afternoon Tea” while proposing scenes where tea can be enjoyed as a more familiar beverage, such as during the summer as an iced tea.
‘Afternoon Tea’ is not only a brand with the value of deliciousness but also a brand that contributes to solving social issues,” he repeated, mentioning that approximately 40% of the tea leaves used in “Afternoon Tea” are imported to Japan from Sri Lanka, with an additional 20% being used in “Afternoon Tea” itself. In Sri Lanka, tea leaves are a representative agricultural product, accounting for about half of the export value in the agricultural sector. “In other words, the success of ‘Afternoon Tea’ also contributes to the economic support of Sri Lankan farmers,” emphasized Mr. Inoue.
At Kirin Beverage, support is provided for Sri Lankan tea estates to obtain international farm certification known as “Rainforest Alliance Certification.” This initiative involves assisting farmers in acquiring agricultural techniques and support towards certification, enabling them to produce tea leaves while considering nature and human rights. With the company’s support, one-third of the large-scale farms in Sri Lanka have obtained certification. This effort is establishing a foundation for sustainable tea leaf imports.
Since 2021, the “Kumamoto-grown Strawberry Tea” has been on sale, with a portion of its sales donated to support Kumamoto Prefecture’s recovery efforts, contributing to regional assistance. Additionally, by reducing the use of plastic in the PET bottles, environmental impact is minimized. Mr. Inoue reiterates that “Afternoon Tea” is truly a brand that embodies CSV (Creating Shared Value).
Mr. Inoue states, “With the increasing availability of tea leaves and a variety of bottled tea beverages, as well as the growing number of specialty tea shops akin to coffee shops, the potential for growth in Japan’s tea market is still significant.” He adds, “It would not be an exaggeration to say that ‘Afternoon Tea’ leads Japan’s tea market. By further developing the ‘Afternoon Tea’ brand, we aim to contribute to the expansion of the tea market, the penetration of tea culture, and deliver delicious health to our customers every day.”
Tea Industry in Sri Lanka
Mr. E. Rodney M. Perera, the Ambassador of Sri Lanka to Japan thanked KIRIN Beverage Company to continue launching new types of drinks made from tea leaves originating in Sri Lanka. KIRIN’s efforts to showcase actual locations where the tea is harvested deepens the connection between the consumer and the product. It allows everyone to appreciate the origins of the tea they are enjoying and the process that goes into its production.
Mr. E. Rodney M. Perera, the Ambassador of Sri Lanka to Japan
Then he appreciated the contribution of KIRIN for global sustainability initiatives, like the Rainforest Alliance. Sri Lanka like Japan, deeply rooted in agriculture with the two major crops being rice and tea, is challenged by climate change with changing weather patterns. Initiatives for economic, environmental, and social sustainability are important for these industries.
He unraveled the history of tea, stating that tea culture in the world changed in the 17th Century when British King Charles II married Catherine de Braganza, a Portuguese princess who loved tea. Queen Catherine introduced tea as a breakfast drink and it became fashionable amongst the wealthy classes and later, affordable for everyone. Today with King Charles the Third, the tea consumption is expected to be continue to grow.
Then he shared the story of Ceylon Tea begins with coffee. Sri Lanka was administered by Britain between 1815 and 1948. The British provided the transportation network that enabled coffee-planters to get their produce to town, and then to market in England. By 1860s, Ceylon became the world’s largest producer of coffee. But a coffee-rust disease wiped out the entire coffee enterprise in Ceylon.
He shared an interesting tidbit that in the year 1862, around the same time, Yukichi Fukuzawa, while en route from Japan to Europe and upon his return, visited Sri Lanka twice. “Currently, tea, which is a major export item from Sri Lanka to Japan, further enriches the friendly relations between the two countries,” he continued. Perera himself revealed an episode where he visited the Noto Peninsula, which was struck by an earthquake on January 1st, three times to encourage the affected victims. On these occasions, he served Sri Lankan curry along with Sri Lankan tea to uplift their spirits.
He then explained that Sri Lankan tea gets its unique flavor from the soil, sun, amount of rainfall, altitude differences, and the monsoonal winds from the eastern and western sides. From its high antioxidant content to its ability to improve cognitive function, Ceylon tea is a great choice to boost your health and well-being. He also mentioned Sri Lanka’s scenic hill country railway, a winding, ascending route described as one of the world’s greatest train experiences. The soft rhythms of the train climbing up through the highlands lull you as you pass lush tea plantations, rolling hills, forests, and breathtaking views.
- Brand Strategy of “Afternoon Tea”
Speaking about the importance of Sri Lankan tea leaves in “Afternoon Tea” is Mr. Eiji Hara, Senior Brand Manager of the Afternoon Tea Department at Kirin Beverage. Since its launch in 1986, Sri Lankan tea leaves have consistently been used in part. To enhance the quality of these tea leaves and maintain an environment conducive to sustainable sourcing, efforts have been made towards obtaining Rainforest Alliance certification. Additionally, in 2007, the Kirin Library was established, engaging in activities such as donating books to schools located within plantations.
Mr. Eiji Hara, Senior Brand Manager of the Afternoon Tea Department at Kirin Beverage.
“Afternoon Tea” has set forth a brand vision of “Creating a tea culture in Japan and enriching the daily lives of society and customers,” says Mr. Hara. “By making customers feel the value of drinking tea and the value of tea itself, we want to create a culture in Japan where tea is chosen daily.” Following the COVID-19 pandemic, where positive emotions have decreased and it has been challenging to restore the joyous feelings, Mr. Hara revealed the sentiment of wanting to do something with the familiar tea for the customers’ minds. Considering the current situation where there is a rising desire for a slightly richer and healthier lifestyle, he expressed the outlook of capturing such changes in customers’ mindset and promoting the penetration of tea accordingly.
Pointing out the potential of tea, it’s noted that tea offers not only a sense of luxury and richness in aroma but also versatility, being enjoyable both hot and cold, with or without milk. Highlighting the health value of tea polyphenols, it’s acknowledged that such appeal makes tea a companion to consumers regardless of age, season, or occasion. However, for those who don’t usually drink tea, there’s a gap in understanding the scene for drinking tea compared to other categories. For some, it’s just one of the options alongside juices. Emphasizing the need to create scenes where customers are more inclined to drink tea and to provide as many experiences as possible where they think, “Tea is delicious!” in its original high-quality form is indicated.
To bridge such gaps, Mr. Hara expresses the intention to take actions in 2024 that allow customers to imagine moments when they want to drink tea. Particularly focusing on the regular three items – “Straight Tea/Milk Tea/Lemon Tea” – and “Delicious Unsweetened”, activities will be conducted to evoke scenes of drinking tea and further emphasize the rewarding experience characteristic of tea, as demonstrated by the “TEA SELECTION” series launched last year. Through these efforts, the strategy to expand the tea category will be continued.
“It is crucial for expanding the category to focus on summer initiatives,” emphasizing the peak season for soft drinks, where the “Summer Iced Tea” campaign, started last year, will continue to be promoted. At the core of this effort are the three regular items set to be renewed on June 18th, aiming to create opportunities for those who don’t usually drink tea to pick up a tea. Collaborating with partners, they aim to enhance new product offerings and event experiences to encourage engagement.
He explains once again the deliciousness of ‘Afternoon Tea’. Regarding the ‘commitment to black tea’, ‘Afternoon Tea’ selects varieties that complement the characteristics of black tea leaves for each flavor. As for the ‘commitment to production methods’, after numerous trial and error attempts to address the tendency of black tea to cloud when chilled, they have achieved a clear, transparent liquid with no off-flavors through the ‘Clear Iced Tea production method’. Furthermore, they mentioned their ‘commitment to the manufacturing process’ by emphasizing that the tea is made using the same procedures as brewing tea in a pot, resulting in an authentic flavor.
The three products being renewed this time have each been adjusted in flavor: ‘Straight Tea’ to provide a refreshing sweetness and a clean aftertaste, ‘Milk Tea’ to enhance the satisfaction of milk, and ‘Lemon Tea’ to incorporate both the fragrance of black tea and the sweet and sour taste of lemon. Additionally, the packaging has been significantly redesigned after six years, transitioning from shrink labels to roll labels to reduce the amount of plastic resin used. Furthermore, by making Anna Maria’s portrait, the symbol of ‘Afternoon Tea’, slightly larger and more prominent, they aim to enhance the modernity and premium feel of the product.
Yahoo news on 7 June 2024
“Kirin’s ‘Afternoon Tea’ Strategy Presentation Aims to Expand Summer Market with Appeal of Iced Tea.”
https://news.yahoo.co.jp/articles/0d6e5c3ad909bee42565f3624e5c527d0b0dab20
Kirin Beverage held a strategic briefing on June 7th regarding “Afternoon Tea,” during which President and Representative Director Kazuhiro Inoue provided explanations.
Afternoon Tea, launched in 1986, has been a long-standing favorite for 38 years. However, its mainstays—Straight Tea, Milk Tea, and Lemon Tea—are being renewed for the first time in six years and are set to be released on June 18th.
Inoue mentioned the current state and future prospects of the beverage industry, stating, “The domestic market is expected to shrink due to population decline. While there is potential for market improvement with increased inbound demand and expanding health needs, the reality remains uncertain and forecasting is quite challenging.” In light of this environment, Inoue emphasized the necessity of maximizing Kirin’s strengths through the practice of Creating Shared Value (CSV) to survive.
For its 2024 business strategy, the company prioritizes building a strong brand and reinforcing its business foundation. By promoting the attractiveness of existing categories through new value propositions within the Afternoon Tea brand, they aim to strengthen brand power.
According to Eiji Hara, Senior Brand Manager of Afternoon Tea in the Marketing Department, Afternoon Tea aspires to “create Japanese tea culture and enrich the daily lives of society and customers.” However, he noted a trend in consumer sentiment wherein the enjoyment experienced during the pandemic has diminished, and even recently, such sentiment has not returned. Hara believes there are things unique to tea that can address this issue.
Hara highlighted the strengths of tea, such as its sophistication, rich aroma, and versatility in consumption. While acknowledging concerns about the lack of clarity in when to drink tea compared to other beverages and the association of tea with juices, he emphasized the need to create situations where people desire to drink tea. By creating experiences of quality and deliciousness, they aim to expand the market.
Hara emphasized the importance of summer strategy for category expansion, aiming to create opportunities for people to crave iced tea during the peak season for refreshing beverages. They plan to appeal to a wide range of consumers, from tea enthusiasts to those with less interest, and revamp the image of tea in Japan from a drink primarily consumed hot in autumn and winter. Additionally, they seek to influence the subconscious notion of “something a little better for everyday consumption” by leveraging the sophistication of tea.
In this renewal, they maintain the brand’s traditions while pursuing flavors that resonate with contemporary tastes by changing the tea leaves used for each flavor, employing a clear iced tea production method that remains clear when chilled, and following the same production process as pot-brewed tea in factories. The goal is to achieve a balance of tea’s unique aroma and just the right amount of sweetness, catering to moments of relaxation or indulgence.
Regarding flavors, Hara stated, “For Milk Tea, adjustments have been made to enhance the satisfaction of milk. For Straight Tea, changes have been made to enjoy a pleasant sweetness and a refreshing aftertaste. Lemon Tea has been revamped to enjoy the fragrance while experiencing the sweet and sour taste of lemon.”
Furthermore, they have revamped bottle and label designs, transitioning from conventional shrink labels to roll labels to reduce plastic resin usage.
As part of their limited-time offerings, they will release “Kirin Afternoon Tea Sparkling Lychee Squash,” which provides a refreshing experience with added carbonation, on July 2nd, and “Kirin Afternoon Tea TEA SELECTION SUMMER BLEND ICE TEA,” expressing tropical flavors without sugar, on July 9th, appealing to those who do not typically consume tea.
Inoue stated, “There is still growth potential in the Japanese tea market.” He emphasized the need to expand the market to approximately 10%, similar to the current level of coffee sales, to establish tea as a cultural staple. By growing the Afternoon Tea brand, they aim to contribute to the expansion of the tea market and the proliferation of tea culture.
During the presentation, E. Rodney M. Perera, the Sri Lankan Ambassador to Japan, was also present, representing the Sri Lankan side responsible for producing the tea leaves used in Afternoon Tea. Perera introduced the history of Ceylon tea, mentioning that Sri Lanka, once the world’s largest producer of coffee in the 1860s under British rule, shifted to tea cultivation experiments to salvage coffee estates devastated by rust disease. He expressed gratitude to the company for supporting Sri Lankan tea estates in obtaining Rainforest Alliance certification in recent years.
Perera also encouraged attendance at the “16th Sri Lanka Festival 2024,” taking place at Yoyogi Park in Tokyo on June 15th and 16th, where visitors can enjoy Sri Lankan food and culture.
