RENEE MONTAGNE, HOST:
Japan beer market has long been dominated by a few big brands like Asahi and Kirin but that era may be winding down, as Lucy Craft reports.
LUCY CRAFT, BYLINE: From a dusty country road about 100 miles north of Tokyo, rises the unmistakable whitewashed facade of a sake brewery. Here in the quiet town of Naka, the Kiuchi family has been brewing Japan's ancient rice wine for seven generations, since the time of the shogun.
(SOUNDBITE OF BUBBLING)
CRAFT: But these days, the beverage rolling off Kiuchi's production line would make its 19th-century founders squirm. The brewery is now a leading maker of micro-beer.
Vice president Youichi Kiuchi shows me around.
YOUICHI KIUCHI: (Foreign language spoken)
CRAFT: He tells me, that building furthest away used to produce sake. Now it's only for brewing beer.
(SOUNDBITE OF MACHINERY)
MONTAGNE: The humid air inside the newly expanded plant is fragrant with malt and wheat. In the beer business for just 15 years, the company will produce over 250,000 gallons of craft beer and earn about $8 million this year. Half their volume is destined for pubs and supermarkets in the U.S.
CRAFT: Kiuchi Brewery is among scores of Japanese sake makers that have branched into craft beer. The most successful have seen year-on-year growth of as much 40 percent, in the face of a long, slow decline for sake.
Ry Beville, publisher of the Japan Beer Times, says demand for craft beer is unprecedented.
RY BEVILLE: A lot of people are saying 2012 is the year of craft beer in Japan, even though it started in 1995. And you're seeing an explosion of craft beer bars and restaurants in Tokyo. I mean, there's over 100. All across the country they're popping up every week.
CRAFT: For Youichi Kiuchi, shifting into beer was not just a savvy business move, but an act of personal liberation. Beer-making, he says, has literally changed his life.
KIUCHI: (Through Translator) Making sake is like judo or flower arranging - you're judged by how well you stick to the rules. There's no margin for improvisation. But beer is about doing what you want. It's fun to make and sell. Sake is hard to make and tough to sell.
CRAFT: Experienced at handling the microbiology of brewing and blessed with high-quality water sources, the Japanese have started to gain international renown for their ale, stout and lager, Beville says.
BEVILLE: There are some Japanese breweries that are making better beers than Americans. A good example is Fujizakura which made a rauchbier, a smoked beer. That was shocking, I'm sure, to a lot of people, that a Japanese beer would win in a traditional German category.
CRAFT: In an effort to stand out in a global beer market brimming with choice, the Japanese have added in novel ingredients like ginger root, oyster shell, wasabi horseradish, and even miso - a soybean paste more commonly used in soups.
But if brewing has proved no stumbling block, Japanese brewers are still learning how to sell their stuff, says Ryouji Oda, president of the Japan Craft Beer Association.
RYOUJI ODA, PRESIDENT, JAPAN CRAFT BEER ASSOCIATION: (Through Translator) Technically, it's very easy for sake makers to switch to making beer. But the markets are completely different, so those sake makers are struggling to figure it out.
CRAFT: Micro-beer remains a micro-corner of the Japanese beer market, and, at close to nine dollars for a single-serving bottle, out of the price range of many guzzlers.
But small beer makers are confident about grabbing market share away from mass-market brew and other alcoholic beverages for years to come.
For NPR News, this is Lucy Craft in Tokyo.