Phantom Demand and the Sake Market

Abstract

This article examines sake consumption patterns in Hong Kong and reports on a study that seeks to determine if the market can be grown. Hong Kong is one of the major export markets for sake, driven largely by the popularity of Japanese restaurants. The Japanese Export and Trade Organizations (JETRO) is looking at ways to expand consumption as a means of overcoming the decline in sake sales in Japan. This study presents a cautionary tale of market research, for on the surface the study reveals the market could grow by at least 25%, and more importantly, the current price point is below what consumers are willing to pay. However, closer examination of the results suggests a much smaller growth potential for most of the people who consume sake do so once a month or less and usually in a restaurant setting. Increasing sales will require a change in overall dining and drinking behavior patterns, which will be difficult to achieve.