Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Suntory Family Built a Whisky Empire
Transcript
- Lucas: So the year is 1923, and the place is Yamazaki, a small town between Kyoto and Osaka. A 44-year-old man is pouring the first stone for a whisky distillery. And almost everyone in the Japanese drinks industry thinks he's lost his mind. Luna: That man being Shinjiro Torii, right? The founder of Suntory? Lucas: Exactly. Shinjiro had already built a successful wine business — he'd been importing and selling Western-style wines and spirits since 1899. But whisky was a different beast. Japan didn't have a real whisky culture at the time. People drank sake, shochu, or beer. Whisky was something the rich drank to look cosmopolitan, and they mostly bought it from Scotland. Luna: So he wasn't just building a distillery. He was betting that Japanese drinkers would eventually embrace a homegrown version. That's a pretty bold move for a guy in his mid-forties. Lucas: Bold, and it almost bankrupted him. The first releases were rough — Japanese palates weren't used to the smoky, peaty style of Scotch. But Shinjiro had a vision. He wanted to make a whisky that was lighter, more floral, more suited to Japanese cuisine. And he had the patience to wait for it. Lucas: It took more than a decade for his single malt to find its footing. The real breakthrough came in 1929 with the Suntory Shirofuda, but even that was a slow burn. Shinjiro kept tweaking the blend, and he gradually built a loyal following among Japanese connoisseurs. Luna: So the foundation was set by the founder. But what happened after he passed? I imagine that's where a lot of family businesses stumble. Lucas: Shinjiro died in 1962, and his son Keizo took over. Keizo wasn't a distiller — he was a marketer. And that's probably why Suntory didn't just become a drinks company, but a lifestyle brand. Keizo pushed into beer, then into soft drinks, and eventually into restaurants and even a publishing arm. He also expanded the whisky lineup, launching the iconic Hibiki blend in 1989. Luna: Hibiki is the one with the 24-sided bottle, right? It's become this global symbol of Japanese craftsmanship. Lucas: That's the one. Keizo understood that whisky wasn't just a beverage — it was a story, a piece of Japanese culture. He invested heavily in the 'Japanese whisky' narrative, even when domestic sales were flat. That long-term thinking paid off decades later, when international connoisseurs started discovering what the family had been making all along. Lucas: But here's the interesting part — the Torii family didn't just hand the reins to the eldest son and hope for the best. Keizo had two sons, Nobutada and Shingo. In 2001, he made a decision that stunned everyone: he named Nobutada as his successor, but he also gave Shingo control of the food and beverage division. It was a split, not a contest. Luna: That sounds modern, almost like a corporate board decision. But it also set up potential conflict within the family. How did they manage that? Lucas: They've never been public about the details, but the result is that both sons have had room to lead. Nobutada focused on the global spirits push, and Shingo ran the domestic drinks and food empire. In many family businesses, that kind of dual leadership creates fiefdoms. Here, it seems to have created a healthy division of labor. Luna: And that global push — that's the part most people know about now. When did Suntory become a name you'd see on a shelf in New York or London? Lucas: The inflection point was the 2003 launch of Yamazaki single malt in the United States. It won a bunch of international awards, and suddenly 'Japanese whisky' was a category. But the real accelerator was the 2014 announcement that Suntory would buy Beam Inc. — the company behind Jim Beam and Maker's Mark — for about 16 billion dollars. That was the moment the family signaled they weren't just a niche player. Luna: Sixteen billion is a staggering number for a company that's still run by the founder's grandsons. But doesn't that kind of acquisition require outside capital? How do they fund these moves without going public? Lucas: That's the riddle of Suntory. They're not listed on any stock exchange. They're a privately held holding company, and they've financed growth through bank debt, bond issuance, and retained earnings. The Beam deal was largely debt-funded. That's a huge bet, and it only works if you have the cash flow to service it — which Suntory does, thanks to that massive domestic drinks business. Lucas: But staying private has a cost. You can't issue stock to reward employees or fund acquisitions. You have to be more disciplined. And you're accountable only to the family — which can be a blessing or a curse. Luna: I'd assume the blessing is that you can play the long game without quarterly earnings pressure. The curse would be that you can't easily exit or dilute. So how has the family navigated that tension? Lucas: They've been remarkably consistent. Every generation has said the same thing: we're a family business, and we plan to stay that way. That's not just sentiment — it's strategy. It lets them invest in whisky that won't be ready for 20 years, or build a distillery in the mountains with no immediate return. Public shareholders would hammer them for that. Luna: Which is why we're talking about them today. But let's be honest — not every family business survives that kind of patience. There are plenty of second- and third-generation failures. What's different about the Torii family? Lucas: A few things. First, they've been willing to bring in professional outsiders at key positions. Nobutada isn't a distiller — he's a business guy. And they've hired some of the industry's best blenders and marketers. Second, they've diversified enough that whisky isn't their only bet. If whisky had a bad decade, the beer and soft drink side carries the company. Lucas: And third — and this is crucial — they've managed succession with a lot of care. The 2014 transition to Nobutada was planned for years, and Shingo was given a clear role. That's not always the case in family empires. Luna: Speaking of succession — what's happening now? We're halfway through 2026. Are we looking at a fifth generation coming up? Lucas: Nobutada is in his early seventies, so the question is definitely live. There hasn't been any official announcement, but his son and daughter have both worked in the business. The family has been tight-lipped, which is typical. They'll probably make a move within the next few years. Luna: And that's where the real test lies. Because you can have the best whisky in the world, but if the next generation doesn't want the job — or can't handle it — the whole thing can unravel. Lucas: Right. And that's true for any family business, whether you're selling whisky or widgets. The succession question is the one that keeps founders up at night. Luna: It's funny you mention that. I was thinking about how often we talk about the founders' vision on this show, but the real skill is in passing that vision on. And that's something most families struggle with. Lucas: Yeah, it's the hardest thing. And it's one of the reasons we keep doing these episodes. If you've been listening to Family Business Stories for a while, maybe you've picked up a lesson or two that's helped with your own decisions, professional or personal. That's the hope, anyway. And honestly, it's also why listener support matters so much. This show has no ads, and it stays that way because of people who find value in it and decide to chip in. If that's you, you can help keep these conversations going at buy me a coffee dot com slash fexingo. It's a small gesture, but it makes a big difference. Luna: And we genuinely appreciate it. It keeps us independent, and it lets us spend the time to dig into stories like the Torii family's. Lucas: So where does that leave Suntory? They've survived two world wars, the post-war economic miracle, the bubble burst, and the global whisky boom. They've done it by staying family-led and patient, even when that patience looked like stubbornness. Luna: And the next decade will show whether that patience still pays off. Whisky demand is cooling in some markets, and younger drinkers are gravitating to other spirits. But Suntory has been through cycles before. Lucas: They have. And they've got something most competitors don't: a century of institutional memory. The Torii family has learned to wait. Their whisky took 50 years to find its audience. If that's any guide, they're probably already thinking about the next 50.