Japanese sake is still strongly marketed with cost-based pricing, as compared to distilled spirits where branding influences the price largely:
- The production costs of sake are closely related to the polishing ratio of the rice and the used sake rice. Over 70% of the ingredient cost are associated with sake rice. Some other factors like the pressing method or fermentation starter method play also a role in the sake production cost.
- A Junmai sake 720ml bottle can be purchased in Japan for around 1,000-2,000 yen. More expensive Junmai Daiginjo sells for over 5,000 yen in Japan.
- Exported sake in the USA is about 2 to 3 times the Japanese retail price. For example, a Kubota Manju Junmai Daiginjo goes over the counter in San Francisco for 59.98 USD per 720ml bottle.
Sake Production Cost
How much does it cost to produce sake?
Compared to other spirits and alcoholic beverages, Japanese sake is still dominated by cost-based pricing, whereas crafty marketers can charge higher prices based on demand and brand strength. In general, the highest cost portion is the sake rice used for brewing sake. In the case of a basic sake (Futsushu) the rice contributes to over 70% of the overall ingredient cost.
Premium sake, e.g. Junmai Daiginjo Sake, using highly polished rice grains might have a higher cost ratio. The higher the rice is polished more rice is necessary for the same amount of sake and also the polishing costs increase exponentially. The remaining 30% of the cost for the sake ingredients are made up of koji, yeast, and water among others.
In addition to the sake ingredients, 50 percent bottling and packaging cost add up to a cost price of 698 JPY. An extra 30% overhead is usually added so that the brewery revenue is roughly 998 JPY per bottle.
On the sake bottle, roughly 26% alcohol taxes are applied before being sold to the wholesaler. The wholesaler sells the sake bottles to retailers with a certain margin (usually up to 15%). Lastly, the retailers add their margin to the wholesale price (about 20-30%). In this example, a 1.8 liter bottle of Futsushu (basic sake) the final retail price has a price tag of 1,890 yen.
What does sake rice cost?
There are specific sake rice (酒造好適米, Shuzokoutekimai) variants, which are specifically used only for sake brewing and have favorable attributes for sake brewing. The sake rice variants are more expensive than the normal table rice you can also buy at the supermarket.
The top 3 used sake rice varieties can be bought bags for the following prices:
- Yamadanishiki 25,000 to 40,000 JPY/60kg
- Miyamashiki (Nagano) 17,000 to 18,000 JPY/60kg
- Gohyakumangoku (Niigata) 16,000 JPY/60kg
Depending on the quality grade of the sake rice, which is determined by the number of faulty rice grains and the water content, the prices can also vary within the same sake rice variant.
Are there other cost factors making sake?
When special methods are used the price might vary slightly depending on the efforts. Some influential cost factors are:
- Fermentation starter method: Traditional fermentation starter methods like Kimoto or Yamahai take up to two weeks to ensure the right environment for the yeast to work in. Especially for the Kimoto method, hard manual work is necessary to create the needed rice paste.
- Fermentation speed: Slower fermentation at lower fermentation temperatures for Ginjo-type sake takes a couple of weeks longer to finish.
- Pressing method: Depending on the pressing method chosen, the manual work involved and achievable yield can be very different. When using horizontal pressing machines like widely used Yabuta, the yield will be higher and a whole batch of sake can be pressed in a couple of hours. On the other hand, the pressing process with a vertical press (“Fune”) can take a couple of days. Here the fermentation mash is filled into small bags stacked up in the pressing tub, which involves a lot of manual work preparing.
- Processing and storage: After the ferment has been pressed, the sake can go through a row of post-processing steps before finally being bottled. Depending on the extent of these post-processing steps like filtering or pasteurization the cost might vary as well. For example, unpasteurized sake tends to be a little bit more expensive as the sake bottles have to be stored ideally below 5 degrees.
Sake Retail Cost
How much does sake cost in Japan?
For example, a 720ml bottle of Junmai Daiginjo sake made with 50% polished top-grade Yamadanishiki costs about 5,000-6000 yen. But price alone does not determine its quality. There is some decently priced Junmai sake (sake rice polished to 70% or less, and no added alcohol) in the range of 1,000 yen and 2,000 yen per 720ml bottle, which are also easy to drink and recommendable.
In joint research of the National Tax Office and National Research Institute of Brewing, the sake price in Japan was investigated by interviewing breweries all over the country. For big 1.8 liter bottles, which are often used in restaurants and bars, an average Junmai sake is priced about 2300 yen, whereas a Junmai Ginjo costs about 3000 yen. The Daiginjo types (using sake rice polished more than 50%) can be purchased for over 5000 yen on average.
How much does sake cost in the USA?
According to JETRO’s research on the sake price abroad, the exported sake bottles from Japan are more expensive than the locally produced Japanese brands.
In Los Angeles, a 720ml bottle of Dassai 45 Junmai Daiginjo is sold for 19.98 USD. For example, a Kubota Manju Junmai Daiginjo (720ml bottle) is priced in San Francisco for over 59.98 USD. On the East Coast in New York Kumamoto Shinriki Junmai Ginjo (720ml bottle) goes over the counter for 44.99 USD.
The sake price in the USA is largely dependent on whether the sake has been exported or was locally produced by one of the subsidiaries of Japanese sake producers. Also, the sake price overseas is constructed freely and many distributors charge different prices in consideration of the sales margins. As a thumb rule, the imported sake in the USA cost about 2 to 3 times more compared to the sake price in Japan.
Conclusion
In general, sake is still priced based on cost and, not demand and branding. Some sake breweries and sake brands are trying to change this. For example, one of the most expensive sake, REIKYO by Niizawa Shuzo from Miyagi is retailing at over 350,000 yen, with vintages selling for more than 500,000 yen.
One can buy a Junmai 720ml bottle for anywhere between 1,000 yen to 2,000 yen in Japan. Junmai Daiginjo, which uses top-grade Yamadanishiki sake rice, is priced somewhere at 5,000 yen. Depending on the rice quality and various brewing methods the prices vary.
In the USA for the same sake usually, 2 to 3 times the Japanese retail price is charged to cover all the distribution and retail costs. If you are looking to your sake product portfolio with decently priced sake, get in touch with us.
