Another Mountain to Climb

As you head west out of Morioka, the capital of Iwate Prefecture, the city fades quickly into lush green rice fields followed soon by dense forest and the mountains that form the spine of the central Tohoku region. Riding the Tazawako Line, which connects Morioka to Akita, the wait between trains is, at minimum, close to an hour. Life moves at a slower pace, which can be both refreshing and frustrating.

On a warm August morning I arrive at Shizukuishi Station to meet Hidenori Oka, CEO of Ginga Kogen Beer. He has kindly offered to personally pick me up on his way to work, providing us with some extra time to chat. Though approaching 50, Oka is spry and fit, in part because of his hands-on work at the brewery and also due to his love of mountain climbing. He has an infectious, positive energy about him that is uplifting for any that interact with him.

We drive 30 minutes deeper into the countryside of Iwate to Nishiwaga-machi. As we cruise along a snaking road beside a stream cutting a path through the woods, Oka jokes that there may be more bears in town than people. I half-expect to see one cross the road in front of us. The population (of people, not bears) is in the neighborhood of 5700 and shrinking rapidly as youth pursue a more dynamic, promising life in the city. Oka adds with a smile that out here those considered “elderly” are over 80. People in their 50s are regarded as mere babies.

We turn off the main route and arrive at the brewery a few hundred meters down the road. The property is surrounded by forest. There’s a gentle breeze and Oka deems it a perfect day to do the interview outside under the shade of a grove of trees situated on the expansive lawn that spreads out in front of the facilities. Aside from the faint hum of a compressor somewhere in the brewery, the only sounds are those of chirping insects and birds. The half-timbered facade of the brewery itself resembles a traditional Bavarian house. To its left is a brick-faced lodge that is undergoing renovation and closed for an uncertain period of time. In the company’s heyday it must have been a fabulous place to stay. Now, it’s a reminder of the prolonged financial downturn the company experienced. In November of 2017, Oka took on the challenging task of turning things around.

Twenty years ago, Ginga Kogen was at the top of its game and the apex of the Japanese craft brewing world. It had four sizeable–almost decadently built–production facilities and a well-known brand recognized for its high level of quality. At the time, it was the largest craft brewery in the country. Ginga Kogen Beer was founded in 1996 by entrepreneur Isao Nakamura as part of his company Higashi Nihon House Co., Ltd, with the intention of economically developing Iwate’s Sawauchi Village area (now part of Nishiwaga-machi). According to Oka, Nakamura was not interested in being one of the many small souvenir beer operations that had sprouted up around the country after the change in brewing laws in the mid 90s. He was going big or not at all. He wanted to rival the industry giants. When he formed the company, he set out to do something completely different than the norm of industrial lagers put out by the large companies. The decision was made to brew German-style weizen beer adhering to the strict regulations of the Reinheitsgebot (German Beer Purity Law).

Oka says, “The most important thing to me when I first got here was to understand the philosophy of the person behind the beer, so I did a lot of research on Nakamura. These days, pretty much everyone knows about craft beer, but twenty years ago, no one in Japan knew what it was. Nobody could tell you what a hefeweizen was. I think it was amazing that Nakamura took on introducing a new style of beer to Japan.”

Nakamura invested heavily in building those four ambitious campuses previously noted in Nasu (Tochigi), Aso (Kumamoto), Hida (Gifu), and the main Iwate location in Sawauchi. All were designed for both production and tourism, complete with brewery, beer hall, and event space. At the height of its success the company was the largest craft beer maker in Japan with an annual production close to 10,000kl (at the four breweries combined). It had commercials on TV and any Japanese currently in their 40s or 50s recognize the brand, regardless of whether they drink craft beer or not.

Unfortunately, the company made enormous investments right before the major, prolonged slump in the craft beer market that lingered through the early 2000s. In 2001 sales began to plummet. As a result, that year the Aso and Hida factories were shut down. In 2005 the company was forced into liquidation in an attempt to cover its massive debt. It sold off all of the facilities with the exception of the original property in Sawauchi.

The company survived over the last decade or so owing to a loyal fan base and a stubborn belief in its flagship hefeweizen, Ginga Kogen Komugi no Beer. But the lack of a new fan base compounded by quality control issues and a general lack of direction meant the brewery’s financial woes continued. The parent company (then Nihon House Holdings Co., Ltd.) made the decision to sell. On September 28th of 2017, 100% of the shares of the company were acquired by craft beer giant Yo-Ho Brewing.

At the time Oka was Yo-Ho’s Director of Marketing and Logistics Development and a big part of the company’s success. Back in 2000 he had applied for a job at Yo-Ho, but it was having its own financial troubles due to the market downturn and couldn’t afford to take him on. Yo-Ho’s parent company, however, Hoshino Resort, saw potential in Oka. He was offered a position in human resources with the possibility of eventually moving to a role at the brewery when the situation improved. That came in 2007 and, keeping to its word, Hoshino Resort transferred Oka to the brewing team at Yo-Ho. In his ten years there, Oka worked in production, packaging, QC and HR, basically learning every aspect of the company while moving up in the ranks. Not only has he become one of the stars of the Japanese craft beer world, but he is also respected on an international level as a beer judge and representative of Japanese craft beer.

Most people would have envied his situation at Yo-Ho. The company is often listed among the best in Japan for work environments and employee satisfaction. I ask, “Why would you leave that for what surely is going to be a trying experience?”

Oka replies, “That’s a great question!” He pauses to find the right words, then continues. “I love a challenge. When I joined Yo-Ho it had twenty employees and no one knew Yona Yona Ale. We had technical difficulties and problems with the facilities. There was a mountain of issues to overcome, we were short on cash and understaffed. Now Yo-Ho Brewing is Japan’s largest craft beer maker and Yona Yona Ale has become one of the most prominent brands in the whole country. In terms of human resources, the company has assembled talented people from all over the country.”

“I’m satisfied that I contributed to the growth of Yo-Ho in my role there, and I’m proud of my achievements. However, there was a part of me that was no longer content. Once Yona Yona was successful, I felt like I had climbed that mountain. When you get the top of a mountain, you can see another in the distance and think, hey, that one looks great! I want to climb that one, too. That’s the feeling I had. Precisely at that moment, my company was looking for someone to take the lead at Ginga Kogen. Ginga’s was the most famous craft beer in the country twenty years ago. To try to make it Japan’s top brand again was something that really enticed me. I couldn’t think of a job that would be more exciting. I applied for it immediately.”

While many things have changed at Ginga Kogen since it down-sized, Oka says one thing that hasn’t is the beer. Though brewers may have tweaked recipes, all along the company has been brewing according to the strict regulations of the Reinheitsgebot. Oka has been involved in American and British brewing methodology for most of his craft beer career. The brewing process at Ginga was entirely new to him. He was familiar with German beer itself, having visited the country on multiple occasions, but had little knowledge of the traditional brewing process.

At Yo-Ho he was heavily involved in beer styles focusing on voluminous dry-hopping and barrel-aging. When he observed the German brewing methods during his trips, he thought, “It seems mildly interesting but not especially exciting”. But after arriving at Ginga, he felt as though his eyes had opened to a new world. He is excited about his next trip to Germany during which time he plans to dive deeply into the traditional ways of brewing, visiting as many breweries as possible and consulting with brewers.

When he took over at Ginga, Oka inherited all the previous staff. Including himself, there are 25 employees–about the same as when he joined Yo-Ho, he points out. But isn’t there a massive difference in company culture? At Yo-Ho the vibe is like that of a glee club or a cheering squad.

Oka admits, “The company culture is definitely different. But I think much of it is due to the character of people from Iwate. Think about when we were taking group photos. It wasn’t like a shooting at Yo-Ho where everyone is super outgoing and crazed, waving cans of Yona Yona. I’m sure you noticed everyone here is more reserved and serious. But when it comes to making beer, they are extremely diligent, which is exactly the same as at Yo-Ho. After my first month here I felt confident that I could succeed with this crew.”

Having faith in your personnel is a good base for success, but how does he plan to restore the brand to its prior status at the top? Oka admits that winning over a new fan base is one of the biggest challenges he faces. Most of the company’s loyal fans are middle-aged. How do you get the 20- and 30-something crowd to buy Ginga? Where do you start?

“Back to the Basics” is Oka’s current philosophy at this stage. He isn’t interested in following the current trends, like hazy IPAs or barrel-aged brews. That isn’t what Ginga Kogen is about. He has made it the company’s primary goal to elevate its hefeweizen to the point where it is recognized as world-class. The beer has been a quality choice off the shelf for many years, but Oka’s is a tall order.

In the brewery, he is investing a great deal of effort into increasing quality. He finds it admirable that the company unfalteringly continued brewing in the traditional German way, but prior to his arrival they didn’t know much about the concept of continuous improvement. He points out that no one questioned why certain practices were followed. They just accepted them as the correct way of doing things and saw no reason to change. But in the ever-evolving craft beer world, obviously change is necessary and inevitable. Oka is employing science to prove that there are often better or more efficient ways to do things, even while maintaining tradition. This is where Yo-Ho comes in.

He is taking full advantage of Yo-Ho’s well-equipped lab and experienced staff to implement quality control and demonstrate how things can be done differently to produce better results. Building a similar world-class lab at Ginga would be an expensive endeavor. Attracting talented people to staff it out in rural Iwate is another barrier. This past summer it took him four months just to find two part-time workers to assist with seasonal distribution. Using the Yo-Ho lab (whose privilege Ginga pays for) is clearly the best alternative right now.

One area in which he sees room for improvement is the environment for the yeast. The water used at Ginga is naturally extremely soft (measured at 9mg-CaCO3/L). Yeast requires minerals to thrive and brewers commonly add zinc or other minerals to assist. But because Ginga follows the beer purity regulations, they cannot do this or treat the water in anyway. So a very specific mashing process was devised to create an environment that promotes healthy yeast activity through pH levels and the presence of compounds like proteins. But that process has seen almost no change during the company’s existence.

Oka says, “I want everyone to study how improvements can be made and to keep records. From that data we can learn why we had a certain attenuation. We can understand how much oxygen is the perfect amount to create the best environment for fermentation. I have implemented measurement and data recording procedures to help us improve in this area.”

Ginga has five brewers currently. Up to this point they have had little training beyond what they learned from their supervisors. Their location in the wilderness of Iwate provides them with few opportunities to interact with other brewers. Oka believes this is a big problem. He relates, “Until recently, they didn’t really feel it was necessary to hear the opinions of other brewers. They respected the traditional process they’d been reliably using for twenty years. But I believe we must continue to make improvements as well as value the tradition we have. Now I am encouraging them to interact with other brewers and to seek to improve their techniques.”

In response to Oka’s prodding, the staff at the brewery have developed attitudes conducive to study. Oka says he supports visits to other breweries that make similar styles of beer. He stresses deepening relationships with fellow brewers. He says he wants to open Ginga Kogen’s doors to them, as well.

Beyond the walls of the brewery, there is also much work to be done. Oka feels there is still a largely untapped market for consumers taking a first step into the craft beer world. Moving directly from an industrial lager to a West Coast IPA is not a likely course. But a traditional German-style weizen or pale ale isn’t such a big leap. Though some will surely move beyond to the so-called “extreme stuff”, he feels it’s possible to keep many of the new converts.

Even among current craft beer fans, Oka thinks that there are many that aren’t looking for only “extreme” beers. Most want to try different varieties of quality beer. Surely there is a large contingency that want traditional hand-crafted beers. He cites Brimmer Brewing’s Porter and TDM 1874’s Brown Porter as prime examples of craft beers that exemplify what he is talking about–well-made brews with an emphasis on balance. He firmly believes that the number of people that are attracted to these types of beer is underestimated and those are the customers to whom Ginga Kogen will appeal.

The Tokyo area is the company’s biggest market. Its consumers are people that often drink at home. Many are business people that want to enjoy something a little different than an industrial lager or happoshu when they get home from work. Ginga’s beers are primarily sold in cans at supermarkets and convenience stores. Since Yo-Ho has been extremely successful in getting on the shelf in these places, can’t they just piggyback on contracts with the parent company?

Oka explains that the two companies are completely financially independent. Ginga’s sales staff is responsible for dealing directly with stores. Though Yo-Ho president Naoyuki Ide expects results, he doesn’t issue directives on how to accomplish the company’s goals. Oka says Yo-Ho provides no assistance beyond help with improving brewing skills and QC. All Ginga Kogen’s beer is produced at the Iwate facility and the idea of having its beer brewed at Yo-Ho is not being considered right now.

Oka has given himself five years to make Ginga the top brand in Japan again. It’s ambitious, yes, but he believes that it’s possible. I interject that the market is completely different than it was twenty years ago. Competition is fierce now, both domestically and from abroad. How are you going to beat out your competitors?

Oka asserts that his philosophy is different. “I don’t think about beating out another brewery’s hefeweizen. I think about expanding the market. I don’t think of the other craft brewers as competition. I am thinking about how to reach potential customers that haven’t had craft beer before.” With cooperation he believes that the market can be advanced for the benefit of all.

“First and foremost, my goal is to generate interest in craft beer in Japan. I would never tell someone they must only drink Ginga Kogen. If they become interested in craft beer after drinking a Ginga Kogen brew, I am happy.”

So what barriers exist that might prevent Japanese craft beer from taking the next big step?

“Taxation is absolutely an impediment. A change in the laws to make homebrewing legal is another thing that would definitely trigger market expansion.”

Okay, so we have to get politicians to listen. But they have no incentive to make changes. If you aren’t one of the big four companies with deep pockets, how do you convince lawmakers to hear your voice?

Oka has a tale for this. “So I was talking with Steve Hindy (co-founder of Brooklyn Brewery) recently. He told me that Japan’s craft brewers need to make a much more concerted effort as a unified group. Right now there are many breweries, but they are mostly working on their own to affect change. While he thinks that is commendable, it isn’t enough to get the job done. We need to come together as a strong group working on a national level for our voices to be heard, just like the Brewers Association in America. We all need to band together, including myself, to show resolution and demand action.”

CEO of Ginga Kogen and international beer judge Hidenori Oka seems like a candidate with the necessary clout to put this group together. I ask him if he’d be up to it.

“Oh I would love to! But when I get to work there are so many things to deal with. All of the craft beer company heads are in a similar position. I bet many would love to take the lead in forming some kind of association, but they have to first worry about their own companies.” It’s evident that it pains him that he can’t take on this additional charge.

As if to drive that point home, he continues, “When I was lamenting my lack of time to Steve, he said, ‘You read my book, right? We had the same issues in America! All the brewers in the US are busy. They all had differing opinions. It was no different. It’s a different culture but there is no excuse that you can’t get it done!’ He got really upset at me and all I could do was say, ‘Yeah, you’re right. I’ll do my best.’ I do know that if individualistic Americans could get together to unite as one then (much more group-oriented) Japanese brewers can absolutely do it.”

Admittedly, Oka has a lot on his shoulders. The challenges are many, but he won’t be shying away. Like many of the mountains he has climbed, he expects to reach the top, as any true leader must. In 2015 he summited Denali in Alaska. At 6190m, it’s the tallest peak in North America and has claimed the lives of a significant number of climbers. Getting to the top is a daunting task requiring steely resolve. It would seem that Yo-Ho has wisely put their trust in a person that possesses the right attributes to succeed. Will we see Oka-led Ginga Kogen dethrone its parent company as the top-selling brand in Japan five to ten years down the road? Only time will tell, but I wouldn’t bet against him.

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This article was published in Japan Beer Times #36 (Autumn 2018) and is among the limited content available online. Order your copy through our online shop or download the digital version from the iTunes store to access the full contents of this issue.