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Hong Kong gin brand opens distillery in Japan

01 October 2024 By Joyce Yip

Hong Kong’s first homegrown gin label is opening its own distillery in Hokkaido, Japan that will include single malt whisky production; and it’s calling for investors.

Founded in 2018 by Hong Kong mixologist Kit Cheung and cardiac care nurse Joseph Cheung (the two are not related), Tankyu Distillery has been working with local farmers and suppliers to make Perfume Trees Gin, which is distilled in the Netherlands for easier access to distribution networks in the West.

This summer, Tankyu Distillery announced its plans to build its own distillery in Higashikawa – located a two-hour drive away from Sapporo, the capital of the mountainous Japanese island of Hokkaido. Measuring 19,741 square feet, construction is expected to finish by January 2025, with its first single malt whisky due to launch by the end of 2028.

Aside from its staple Perfume Trees Gin, the distillery is aiming for a production of 32,000 litres of whisky a year, with a capacity for a maximum of 76,200l. Combining modern and traditional techniques, malt is fermented for 48 hours in temperature-controlled stainless-steel tanks. The malt then spends another 48 hours in Japanese wooden washbacks. Distillation is conducted in the European-made iStill, and ageing happens in casks of Oloroso Sherry, Bourbon and the acclaimed Japanese Mizunara.

Currently, Tankyu Distillery is looking for investors for its Private Cask Programme that starts at HK$46,297 (£4,522) for a Bourbon octave.

Co-founder Kit Cheung praised Higashikawa for its affordable storage and quality water that springs from the slopes of Mount Asahidake, the highest mountain of the prefecture. Both of these ingredients are essential to the whisky making process, and are also elements that Hong Kong lacks.

Japan is one of the few countries in Asia with an illustrious history in whisky making, dating back to 1924, which added appeal for the Hong Kong-based brand.

Tankyu Distillery’s project cost HK$30 million (£2.9m), and the expense has been split with the Higashikawa government as part of its revitalisation programme to prevent a declining and ageing population, a prominent problem in many rural Japanese towns. In return, Tankyu Distillery must hire locals and produce gin for the town with botanicals unique to its terroir.

Though he says that global gin consumption has dropped compared to 2019, Kit Cheung is still confident that the category – especially a unique expression from Japan – will still be sought after.

IWSR market data indicates that premium-plus gin volumes rose at a compound annual growth rate (CAGR) of 3% between 2019 and 2023, but fell back by -7% during 2023.

The gin category has becoming somewhat overcrowded, with global brands and flavoured gins taking the vast majority of market share. Tankyu Distillery has felt the impact of over-saturation first hand.

“On-trade is becoming a struggle because top bars are making their own spirits through elaborate methods like slow-cooking, milk fat and fat wash,” says Cheung.

But things are looking up, as forecasts suggest CAGR growth of 1% between 2023 and 2028 for gin globally.

As such, he’s hoping Perfume Trees Gin’s presence at bars across London, Hong Kong and Southeast Asia will be a branding initiative for off-trade consumers, whether for personal enjoyment or as gifts.

“I still want our Hong Kong-made gin to shine on a global stage; but realistically, we want our bottles to be in the homes of people who appreciate it.”

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