Earthquake Update

After Japan’s earthquake and tsunami on 11th March there was significant disruption to the beverages industry in the affected regions of the country. Some of the companies and areas affected have included:

· Kirin Beer’s beer storage tanks and factory buildings in Sendai – some stock destroyed
· Damage to Asahi and Sapporo’s factories in the north and east of Japan – both from earthquake damage and from resultant ground liquefaction nearer Tokyo
· Yakult’s Fukushima and Iwate factories suffered damage halting supply of Yakult Calorie Half, Yakult SHEs, Yakult 300V and Yakult Genki Yogurt products
· Morinaga Dairies Sendai factory – building and equipment affected
· Otsuka Pharamceutical Hanamaki factory producing nutrition products
· Nihon Kami Pack – damage to buildings and production facilities and the collapse of stock in its automatic warehouse
· Coca Cola Central Japan – damage to its automatic warehouse system and stock
· Hokuetsu Package in Ibaragi, which makes packaging for milk suffered serious damage to its factory. (50% of Japan’s production of paper cartons is in Ibaragi which was an area badly affected)
· Toyo Seikan Group, one of Japan’s largest soft drink and beer packaging suppliers has suffered damage to a number of factories including its Kanto and Tohoku PET bottling, and to Japan Crown Cork in Ibaragi which produces 30-40% of Japan’s PET bottle caps
· Daiwa Seikan, another major can and bottle packaging supplier has suffered damage to production facilities, and plant shutdowns due to fallen and damaged stock of secondary materials

Much of the most serious impact however has been to logistics and distribution, in particular regarding availability of fuel. And power cuts have necessitated the disruption of production affecting production efficiency and output. Companies with factories in the west side of Japan have been shifting production there where possible and necessary. However, as of 24th March we are already seeing production resuming at some of the damaged and disrupted facilities.

In addition, both the major and smaller beverage and food companies have been quick to make significant product and financial donations to the relief effort. Some, such as Cheerio Corporation, have been able to create their own new and direct distribution routes to the disaster areas.

We will bring you more details of the effects of the Japan earthquake on the beverage industry and market as they emerge.