US Slowdown Hits Suntory as Alcohol Profit Plunges 25%

Suntory’s alcoholic beverages business returned to revenue growth in the first half of 2026, supported by strong sales in Japan and India, but operating profit plunged nearly 25% as weaker US demand and distributor destocking weighed on its overseas operations.

Revenue from the business, including liquor taxes, edged up 0.2% from a year earlier to 653.6 billion yen ($4.10 billion), reversing a decline in 2025. Operating profit fell 24.6% to 53.9 billion yen ($338 million).

The results highlighted a widening divide across Suntory’s key markets. Beer, ready-to-drink products and whisky grew in Japan, while its Oaksmith whisky brand performed strongly in India. The United States, however, emerged as the biggest drag on profitability as consumers pulled back and distributors reduced inventories.

Suntory said the inventory adjustments delayed some US shipments until the second half of the year.

At group level, first-half revenue, including liquor taxes, rose 7.1% to 1.7332 trillion yen ($10.87 billion). Operating profit fell 2.6% to 126.3 billion yen ($792 million), while profit attributable to owners of the company dropped 19.2% to 48.2 billion yen ($302 million).

Taira Nishikawa, Suntory’s chief operating officer for corporate management and finance, said revenue growth was driven by the company’s beverages and food operations and its domestic alcoholic beverages business. Lower sales in North America and higher supply-chain costs weighed on operating profit.

Japan Provides Growth

Suntory’s Japanese alcoholic beverages business grew across several major categories during the first half, helped by product launches and marketing campaigns.

Sales of Suntory Draft Beer rose 12%, supported by updated products and packaging and a promotional partnership with Japan’s professional football league, the J.League.

Kin-Mugi beer also recorded higher sales. Suntory promoted the brand alongside seasonal ingredients and dishes, part of an effort to create new drinking occasions in Japan’s mature beer market.

Ready-to-drink beverages continued to expand. Sales of Suntory’s -196 brand rose 10%, helped by marketing that emphasised its fruit flavours.

RTDs have become an increasingly important category for Japanese drinks companies as consumers seek beverages with lower alcohol levels, greater convenience and more flexible drinking occasions.

Suntory’s alcohol-free portfolio also grew, with sales of ALL-FREE up 4%. The company launched ALL-FREE Ale Taste during the period, while its KARADA-WO-OMOU ALL-FREE product continued to expand.

In wine, sales of Sankaboshizai Mutenka no Oishii Wine, Suntory’s range made without added antioxidants, increased 9%.

Overseas Revenue Overtakes Japan

Overseas markets generated more than half of Suntory’s group revenue in the first half, underscoring the company’s growing exposure to shifts in global demand.

Revenue in Japan rose 3.7% to 843.9 billion yen ($5.29 billion), while overseas revenue climbed 10.6% to 889.3 billion yen ($5.58 billion). International markets accounted for 51.3% of the group total.

The milestone also means weakness in major overseas markets is having a greater effect on Suntory’s overall results.

Asia-Pacific revenue exceeded the level recorded a year earlier, with India delivering particularly strong growth. Suntory attributed the performance largely to Oaksmith, a whisky developed for the Indian market.

Sales of Japanese whisky brands Hibiki, Yamazaki and Toki also increased from a year earlier. The -196 RTD brand grew internationally as Suntory expanded it into more markets and stepped up marketing.

Those gains were offset by pressure in the United States, where weaker consumption and distributor inventory reductions hurt sales and profit.

Suntory maintained its full-year forecast despite the first-half earnings decline.

For the year ending Dec. 31, the company expects revenue, including liquor taxes, to rise 4.3% to 3.58 trillion yen ($22.45 billion). It forecasts operating profit will jump 26.6% to 280 billion yen ($1.76 billion), while profit attributable to owners will rise 32.8% to 115 billion yen ($721 million).

The forecast implies a sharp improvement in the second half. Delivering it will depend in part on whether Suntory can maintain growth in Japan and India while limiting the impact of weaker US demand and restoring profitability in North America.