Japanese beer company Sapporo Holdings (Sapporo) has begun reorganizing its business by selling real estate asset and focusing on its beer business.
According to Nikkei Asia on the 11th (local time), Sapporo Holdings plans to change its name to Sapporo Breweries in July. It will be the first change in 23 years since it shifted to a holding company structure in 2003 and adopted its current name. The move is seen as reflecting its intent to concentrate resources on beer, its core business.
To that end, in April it also set up an organization dedicated to mergers and acquisitions (M&A) and business alliances. The company has moved to strengthen its investment capabilities by hiring outside talent with global transaction experience and appointing a business investment expert to lead the unit.
The centerpiece of the strategic shift is the sale of its real estate business. Sapporo is gradually disposing of real estate asset, including Yebisu Garden Place, a mixed-use commercial complex in Tokyo's Shibuya Ward. Pressure from 3D Investment Partners, a Singapore-based activist fund that has called for improved capital efficiency, also played a role. Sapporo plans to use between 300 billion and 400 billion yen (2.85 trillion won to 3.80 trillion won) of the funds it secures for growth investments centered on its alcoholic beverage business.
But market views are divided. The company fell short of expectations in past overseas acquisitions. In 2017, Sapporo acquired U.S. craft brewer Anchor Brewing for 11.8 billion yen (112.24042 billion won), but the following year it recognized a large impairment loss and ultimately liquidated the company in 2023. Stone Brewing, acquired in 2022, also recorded an impairment loss of 13.9 billion yen (132.19734 billion won) due to weak results and decided to sell it this year.
Sapporo says it will focus on growing existing core brands rather than buying new ones. It has put its flagship product, Sapporo Premium Beer (SPB), at the center of its growth strategy. Sold overseas for more than 60 years, SPB has recently been growing at an average annual rate of around 20%. In the United States, after building recognition mainly at Japanese restaurants, it expanded its sales channels into major retail networks such as Walmart and Whole Foods Market.
In Asia, it is strengthening collaboration with local corporations. Through a partnership signed in 2023 with Danish brewer Carlsberg Group, the company significantly increased sales in Hong Kong, Singapore, and Malaysia. It is currently seeking a local partner to enter the Vietnam market.
Sapporo plans to announce a midterm management plan through 2030 at the end of this year and disclose detailed investment plans for the proceeds from the real estate sales.