By Hiroyuki Kachi
TOKYO—Sapporo Holdings /zigman2/quotes/200413497/delayed JP:2501 +4.22% Ltd. is seeking a premium beer brand in the U.S. to increase its presence in North America, a Sapporo spokesman said Wednesday.
The Japanese brewer is looking to buy a premium brand or form an alliance to sell such a brand and has narrowed down its list of potential targets to three or so, the Sapporo spokesman said, though he declined to specify any names.
"It's true that we want a brand," he said, adding that a deal is necessary to buttress its premium brand portfolio in North America, which currently comprises its Sapporo brand beer and Canada's Sleeman beer. The brewer is partly owned by U.S. investment fund Steel Partners.
Given persistent slow sales in its domestic market, Sapporo is trying to go on the offensive in niche markets outside Japan. It began selling its Sapporo brand beer in the U.S. in 1985, targeting resident Japanese. But the 2006 purchase of Sleeman Breweries Ltd., Canada's third-biggest brewer, has helped the Japanese company broaden its customer base.
With the Toronto-based Sleeman, Sapporo is mapping out a strategy to meet increasing demand in the U.S. and Canada. With Sleeman's four breweries running at full capacity, Sapporo has three options: build new facilities next to a brewery near Toronto; continue outsourcing production; or purchase more breweries.
Japan's beer industry is under pressure as the nation's shrinking population and weak economy continue to pull down domestic demand. A shift in consumer appetite is also hurting beer sales. Reflecting this, industry-wide shipments fell 4.5% to 207.54 million cases in the six months to June from a year earlier.
Sapporo's interest in buying a North American brand was reported Wednesday by Bloomberg News.