,TOKYO (Reuters), - His social life severely curtailed by the coronavirus pandemic, Tadasu Masuda found himself embracing the opportunity to take what in Japan are known as "liver rest days" and try out a range of alcohol-free beer brands. They tasted much better than he expected, and while Masuda is not giving up on regular beer, he's now committed to the occasional break. "I want to keep drinking these and make sure my liver gets days off," said the civil servant who lives in Kobe, western Japan, adding that he has become more health conscious since recently entering middle age. The pandemic is propelling an unexpected boom in alcohol-free beer that has Asahi Group Holdings forecasting a 20% jump in revenue for non and low alcoholic beer this year after flat sales in 2020. Asahi is also debuting a new "Beery" label and has plans to expand its line-up. Main rival Kirin Holdings, which had a head start in the category, expects its sales volumes in the segment to jump 23% this year after a 10% rise in 2020 and recently revamped one of its main non-alcoholic beers. Increased time at home, according to industry executives, has freed Japanese drinkers from social norms where beers with workmates often see a round of the same lager ordered for everyone - a change that has also helped lift sales of spirits and high-proof cocktails. Non-alcohol beer has also had other factors working for it, including constant reminders on TV and other media to stay healthy during lockdown and a fortuitous overlap with what executives say have been improvements to taste. Alcohol-free beers had often been described as too yeasty, watery or cloying. The boom has been a rare fillip for a 3.3 trillion yen ($30 billion) industry that has seen demand buckle as Japan's population ages and as wine and other alcoholic drinks have gained in popularity. In fact, Japan's beer consumption has more than halved in the past two decades, and the pandemic has exacerbated that pain as restaurants and bars were forced to close early. Asahi's overall beer sales, which are dominated by its flagship Super Dry brand, particularly at bars, plunged 16% by value last year. Kirin, which has a bigger range of beer offerings, saw its sales volume fall 5%. A second state of emergency that was imposed this year remains in place for Tokyo and its surrounding areas, where 30% of Japanese live, until March 21. BETTER TASTE Alcohol-free beer has become increasingly available in many countries with Anheuser-Busch InBev and Heineken rolling out versions of well-known lagers such as Budweiser and Stella Artois in recent years. While non-alcoholic beer is estimated to account for just 1% of overall beer sales worldwide, rapid growth is predicted. Its global market could grow to $29 billion in 2026, up 65% from 2019, according to a Global Market Insights forecast in January. But Japan's pandemic-driven trend has surprised many in the industry as the segment had long failed to gain traction. Sales of non-alcoholic and low-alcohol beer accounted for under 5% of all Japan beer sales in 2019, far behind 20% for Australia and 12% for Germany, according to Euromonitor data. Like other industry executives, Suntory CEO Takeshi Niinami says brewers have made progress in bringing the taste of non-alcoholic beer closer to regular beer. To that end, they have been working on reducing artificial aromas and sweeteners used to simulate the flavours created through regular fermentation. Some have also adopted manufacturing methods that allow for a gentler removal of alcohol, thereby preserving the taste of beer. "Of course there is the health aspect... but it's only when the flavour improved that people began to really respond," he said at a recent event outlining the company's strategy. Asahi's 0.5%-strength "Beery", for example, uses the slower alcohol extraction method and is advertised as having more "umami and richness" than other beer alternatives. It hits the market late this month, but the advertising campaign has begun in advance of sales - rare treatment for the niche category. Asahi plans to add more low and non-alcohol beer products this year and aims to triple its number of products in the segment by 2025. Kirin relaunched its "Green's Free" no-alcohol beer in late February, marketing it as having higher quality malt and barley as well as Nelson Sauvin hops which are used to give an aromatic kick to craft ales. Suntory too recently updated its "All Free" non-alcohol, calorie-free beer with a new recipe. Kazuo Matsuyama, who heads marketing for Asahi's domestic beer business, said the declining appeal of regular beer meant it's time to look beyond the company's core clientele of lager-loving men. "Until now, out of the broader population of 80 million in their 20s to 60s, we were targeting the 20 million people who enjoy drinking daily," he said. "But we now need to look at others." ($1 = 108.5000 yen) REUTERS
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