Breweries were forced to rise from the ashes of the 1995 Great Hanshin Earthquake in a devastated area that once boasted of the largest sake output in Japan. 

The massive quake on Jan. 17, 1995, leveled tens of thousands of homes, office buildings and other structures in Kobe as well as nearby cities and towns.

Among these were a large number of wooden sake breweries in the impacted area.

The area, called Nadagogo, stretching from Kobe to Nishinomiya to the east along the southern coast of Hyogo Prefecture, was home to dozens of sake brewers.

At the time, sake making was a staple of the prefecture’s economy.

Before the disaster, more than 50 sake brewers formed the Nadagogo Brewers’ Association.

But the number was halved by the end of 2024, illustrating the difficulties of remaining in business in the decades after the disaster.  

Many sake breweries are typically run by families and had limited financial resources even if they sought to rebuild.

What added to their burden was that the domestic market for alcoholic beverages continued to decline, casting a shadow over the industry’s future.

FINDING WAY TO SURVIVE

According to the National Tax Agency, 1.26 million kiloliters of sake were sold in Japan in fiscal 1995.

The volume plummeted sharply to 400,000 kl in fiscal 2022.

While the powerful temblor devastated many brewers, it also offered an opportunity to rethink their single-minded reliance on traditional sake making and find an innovative way of surviving--and thriving.

Fukutsuru Shuzo was one of the first brewers that moved quickly to rebuild.

The brewery had become a member of the group of Koyama Honke Syuzo Co., a leading sake maker based in Saitama, six years before the disaster.

After seeing all its wooden breweries destroyed, the brewery made a fresh start by pivoting to a reliance on tourism in March 1996 and eventually became part of Koyama Honke Syuzo.

Now known as Hamafukutsurugura brewery, it produces the Kuzo brand.

“We thought about offering something that cannot be experienced anywhere else,” Takashi Isohata, general manager of Fukutsuru Shuzo and now vice chairman of Koyama Honke Syuzo, explaining about the shift.

Isohata gained inspiration from the rising boom among tourists wanting to visit local breweries for tasting experiences.

He mapped out a survival strategy by building a facility not just for brewing sake but also showing the process and selling the finished product to visitors. He collected ideas through making numerous trips to breweries across the country.

Isohata acknowledged that group companies played a significant role in rebuilding, offering manpower and funding.

“Input from group breweries that were not affected by the disaster” was a big plus, he said.

Fukutsuru Shuzo shipped its remaining sake to the group’s facility in Kyoto, which remained largely intact despite the proximity to Kobe. 

“You could not come up with better ideas for rebuilding when you are stuck in a stricken site with little up-to-date information coming in,” Isohata recalled. “Under those circumstances, you tend to think that everywhere else in the country is in a similar situation.”

Kobe Shu-Shin-Kan Breweries Ltd. is another brewer that made a sweeping makeover within two years of the quake. 

In 1997, it launched a complex replete with a brewing facility, a hall for entertainment activities and a Japanese restaurant serving refined food with sake.

Its flagship brand is Fukuju, a sake that has been served at Nobel Prize-related official events since 2008.

Takenosuke Yasufuku, who became the president of Kobe Shu-Shin-Kan in 2011, said that diversifying the business helped build his company’s solid foundation.

“Sake brewing, tourism and a restaurant remain the three pillars of our business today,” said Yasufuku, 51. “We were able to move onto a new endeavor to export our sake because of the foundation in place.”

When the quake struck, the predecessor of Kobe Shu-Shin-Kan, which dates to 1751, saw all its wooden cellars flattened.

The brewer’s output ability was cut in half as a result.

Yukio Yasufuku, chairman of the company, said a relief program for hard-hit businesses was vital in the rebuilding effort.

Under the aid program, affected companies could apply for interest-free loans from the central and Hyogo prefectural governments on the condition that they modernize their way of doing business in multiple areas. 

At the time, the long-term interest rate was around 3 percent.

“We were exceedingly grateful for the loans,” said Yukio, 82.

Yukio and his elder brother, who was the president of Fukuju Shuzo, crisscrossed Japan to learn from breweries of local beer and wine methods to enhance their future business.

A year after the disaster, Fukuju Shuzo, joined by another company, established Kobe Shu-Shin-Kan to start upgrading business operations with 1.9 billion yen ($12.3 million) in loans.

It took the company 29 years to repay the entire debt in January 2024.

Yukio noted that while he appreciated the relief program, repaying the loans was an enormous burden for a company struggling to recover.

“To revive the local industry in the stricken region, grants that recipients do not have to pay back would be better,” he said.

His suggestion was reflected in relief measures for business operators affected by the 2011 Great East Japan Earthquake and other disasters.

HOLDING ONTO TRADITION

Some breweries have refused to change their traditional business models.

Kenbishi Sake Brewing Co., known for Kenbishi, the sake brand whose origin dates to the 16th century, is one example.

The brewer had eight breweries before the quake struck but all its seven wooden facilities were destroyed.

The company had four of the seven replaced with structures built with reinforced concrete.

But it chose not to tinker with its method and equipment for brewing sake.

“We feared that the taste of our sake might change,” Tatsuya Shirakashi, 78, the brewery chairman, said of the decision.

“Be the clock that stopped,” is the proverb that has been passed down in the Shirakashi family, who began making the Kenbishi brand in the first half of the 20th century.

It means that if you maintain a tradition, rather than chase trends, the times will eventually catch up with you.

Kenbishi Sake Brewing, adhering to the adage, would not develop a new brand of sake nor popular ginjoshu sake, which is made with the only best part of the rice.

But holding onto a tradition came with a price.

In 2019, it was forced to make a painful decision to close one of the rebuilt cellars due to poor sales.

“The most difficult time we experienced was in the immediate aftermath of the disaster,” Shirakashi said. “But it is still difficult even today.”

The brewery could afford to remain “the clock that stopped” due to saved earnings from the past.

The company managed to rebuild with its own capital.

Masataka Shirakashi, who assumed the presidency of the company in 2017, conceded the risk of not updating its sake lineup.

“Frankly speaking, we have a fear of not changing our sake brewing,” said Masataka, 47.

But he added that since the brewer is a family-run unlisted company, it allowed them to operate based on the perspective of decades and hundreds of years of experience.

Masataka also said Kenbishi has the potential to appeal to today’s sake audiences because it was polished to current tastes as various cuisine from across Japan was assembled in Edo, which is today’s Tokyo, during the Edo Period (1603-1867).

“Kenbishi may find new fans as culinary culture diversifies,” he said. 

SUSTAINING THE BRAND

As time passes, rebuilding becomes increasingly challenging for many brewers.

In addition to the loss of production equipment and market, interest in their plight and support from local communities will wear off despite their continuing efforts to recover.

The stricken companies, already vulnerable, tend to be buffeted harder by the changing environment.

Yasufuku Matashiro Shoten brewery, which was founded in 1751 and known for the Daikoku Masamune brand, had to significantly cut production after the earthquake.

Its wooden breweries were damaged, leaving only the reinforced concrete structures for use.

Nearly 10 years later, the brewer began feeling weighed down by the money it borrowed to invest in new facilities.

The aging of the existing facilities exacerbated the situation.

But the prospect for paying back new loans for upgrading them appeared dim, recalled Haruhisa Yasufuku, president of the company.

“Our only viable option was to close down our cellars and somehow find a way to sustain our brand,” said Yasufuku, 46, recalling the decision made in 2013.

But much-needed assistance came from the Kobe-based Hakutsuru Sake Brewery Co., the largest player in the sake industry.

Hakutsuru offered to "lease" one of its breweries to Yasufuku Matashiro Shoten.

The latter’s brewmaster responsible for the sake production goes and works at the leased Hakutsuru’s brewery and Yasufuku Matashiro Shoten then buys the Daikoku Masamune sake made there for the market.

The unique arrangement became possible as brewing technicians of the two sake makers happened to be acquaintances. 

More than 10 years on, Yasufuku Matashiro Shoten has pursued a unique path, offering sake to accompany wagyu cuisine and brown rice tea using sake rice.

Yasufuku said the aim of the brewery is to enrich culinary culture.

Hakutsuru, too, suffered greatly from the disaster, including the collapse of wooden cellars and vaults in the steel-reinforced concrete cellars.

Asked about when he felt his company was firmly on a recovery track, Kenji Kano, president of Hakutsuru, said he and employees were too busy grappling with their immediate tasks to dwell on it.

“Our focus has been on meeting customers’ requests day after day and creating a new market for a promising product,” said Kano, 53.

HOPE FOR THE FUTURE OVERSEAS

As the domestic market for sake continues to shrink in tandem with the graying Japanese population, one area that offers hope for growth is overseas markets.

In 2012, the country’s sake exports totaled about 9 billion yen to 57 countries, according to the Japan Sake and Shochu Makers Association.

While exports jumped to about 47.5 billion yen to 72 countries in 2022, the figures for 2023 came to about 41.1 billion yen to 75 countries.

A favorable wind is now blowing at the back of Japan’s sake exports.

Traditional sake brewing was added to UNESCO’s Intangible Cultural Heritage list in December.

Small sake brewers have popped up in the United States and Europe over the last 10 years, producing their own style of sake.

At Hakutsuru, an effort has been under way to market know-how on sake brewing as well as mini breweries in the global market.

“We have already received inquiries from overseas,” said Mitsuhiro Ban, executive officer and chief engineer of Hakutsuru.

In a vision the company has created, an overseas client can set up a small brewery at its restaurant and Hakutsuru provides support in the sake making.

Hakutsuru hopes such a setup will raise the profile of sake among foreign audiences and will pave the way for a market for its own products.

But before that happens, Japan’s sake industry still has a long way to go.

Sake's share among all alcoholic beverages in the United States is estimated at a paltry 0.2 percent or so of the market. 

Still, Ban remains hopeful.

“I see a big potential for sake in the U.S. market,” said Ban, 60. “If you increase to just 0.4 percent there, that means the sake market will double in size.”