Asahi Operations Resume After Attack

Digital Siege: How Asahi's Operations Survived a Crippling Cyber-Attack

A sophisticated ransomware attack recently paralysed the Japanese domestic operations of Asahi Group Holdings, Japan's largest brewer. The incident compelled a suspension of manufacturing and shipments, highlighting the profound vulnerabilities of modern, interconnected supply chains to digital threats. While the breach was contained within Japan, it sent shockwaves through the national economy, raising urgent questions about industrial cybersecurity. The attack on Asahi is a stark reminder that in today's digitised world, operational continuity is as critical as data protection.

The incident unfolded in late September, crippling essential systems responsible for order processing, delivery logistics, and customer service centres. Although Asahi's factory production machinery was not directly compromised, the inability to manage orders and shipments compelled the brewer to suspend operations at its domestic plants. This created an immediate void in the highly competitive Japanese beverage market, with major retailers bracing for significant shortages of popular products like the Asahi Super Dry beer.

The Ripple Effect on Japan's Retail Landscape

The sudden halt in Asahi's production sent immediate tremors through Japan's extensive retail network. Giants of the convenience store sector, including FamilyMart and 7-Eleven, quickly began to issue warnings to their customers. They anticipated imminent shortages not only of the flagship Asahi Super Dry beer but also of other beverages and private-label goods produced by the brewing giant. The reliance of these retailers on Asahi's vast product portfolio meant that the disruption threatened to leave significant gaps on their shelves.

This situation vividly illustrates the intricate dependency of retailers on the operational stability of their key suppliers. The cyber-attack did not need to breach the retailers' own systems to have a direct and damaging impact on their business. With Asahi's network for handling orders and distribution offline, a critical supply line was severed, leaving store managers scrambling to manage customer expectations and source alternative products. The incident serves as a powerful case study in the cascading effects of supply chain disruptions.

A Staggered Return to Production

In the wake of the debilitating cyber-attack, Asahi initiated a phased and cautious restart of its multifaceted operations. The company prioritised the production of its top-selling beer, Asahi Super Dry, at the six breweries that were gradually brought back online. However, the resumption of activities was not limited to beer production. The company also began restarting plants that handle its extensive portfolio of non-alcoholic beverages and food items, signalling a comprehensive effort to restore its entire domestic manufacturing footprint.

Despite the restart, Asahi officials were quick to temper expectations, stating that the reopened facilities were still operating below maximum capacity. The recovery was deliberately gradual, with a pair of its non-alcoholic beverage plants resuming operations at a reduced level. The company announced that an additional five plants producing non-alcoholic beverages would come back online incrementally, their reactivation synchronised with the restoration of shipment processing capabilities. In a similar fashion, the company's seven food production sites also restarted, although they had not yet reached their maximum output.

The Anatomy of the Attack

Asahi's leadership clarified that the cyber-attack did not breach the sophisticated industrial control systems (ICS) that manage the physical brewing and production processes within its factories. Instead, the attackers targeted the company's corporate IT infrastructure, specifically the systems that handle the logistical backbone of the business: order processing and shipment coordination. This distinction is crucial, as it highlights a vulnerability that exists outside the factory floor but is equally capable of bringing production to a complete standstill.

The company's Emergency Response Headquarters, established immediately after the incident was detected, confirmed that the servers had been targeted by a ransomware attack. This type of malicious software encrypts a victim's files, rendering them inaccessible until a ransom is paid. Asahi also discovered evidence suggesting that data had been exfiltrated from its servers, prompting an intensive investigation into the nature and scope of the stolen information. To contain the threat, the company promptly isolated the affected systems.

A Global Giant with Localised Problems

Asahi Group Holdings is a formidable force in the global beverage market, with a diverse portfolio of iconic brands. The company owns celebrated international names such as Grolsch, Peroni, and Pilsner Urquell, extending its reach far beyond its Japanese origins. In a significant move to solidify its presence within the United Kingdom, Asahi also acquired the brewing operations of Fuller's, including the historic Griffin Brewery in Chiswick and the much-loved London Pride ale. This global footprint, however, did not translate into a worldwide crisis.

The cyber-attack, despite its severity, was successfully confined to Asahi's operations within Japan. This geographical limitation was a critical factor in mitigating the overall damage to the multinational corporation. The company's international divisions, including its European and UK supply chains, continued to operate without interruption. This successful containment demonstrates the effectiveness of Asahi's network segmentation, which prevented the attackers from moving laterally across its global enterprise. The incident underscores that while global integration offers immense market advantages, robust internal firewalls are essential for resilience.

The Slow Road to Recovery

The path to full recovery for Asahi has been methodical and measured. The company made it clear that while breweries were coming back online, their initial focus was exclusively on producing the flagship Super Dry brand. This strategy aimed to prioritise the product with the highest demand and market share to alleviate the most severe shortages faced by retailers and consumers across Japan. It reflects a calculated business decision to stabilise the core of its beer market presence before diversifying production again.

Looking ahead, Asahi announced a significant step towards normalisation, with plans to resume shipments for a broader selection of sixteen items, beginning on October 15th. This expanded list includes popular non-alcoholic choices, including both Asahi Zero and Asahi Dry Zero, the Clear Asahi beverage, and the Black Nikka Clear brand of whiskey. The inclusion of these varied products signals growing confidence in the restored logistical systems. However, the company also conceded that the disruption would inevitably lead to the postponement of some planned new product launches, an unavoidable consequence of the operational chaos.

Data Breach and a Cautious Response

A deeply concerning aspect of the cyber-attack was the confirmation that hackers had successfully exfiltrated data from Asahi's servers. The company acknowledged the data theft and immediately launched a comprehensive investigation to determine the precise nature and extent of the compromised information. In its official statements, Asahi prioritised reassuring customers and business partners, stressing that it had taken immediate steps to safeguard critical data, including personal information, by isolating the affected systems.

While working with external cybersecurity experts to restore its systems, Asahi has been transparent about the uncertainty of the timeline for a full recovery. The company established an Emergency Response Headquarters to manage the crisis and has been coordinating its efforts to bring all systems back online as quickly as possible. To maintain a semblance of business continuity, Asahi reverted to partial manual order processing and shipment, a labour-intensive but necessary measure to ensure a continued supply of products to its customers.

Financial Tremors and Market Reaction

The cyber-attack inevitably cast a shadow over Asahi's financial standing, prompting the company to review the potential impact on its financial results for the fiscal year. The disruption's timing and scale led to significant market anxiety. Analysts from Sanford C. Bernstein Japan issued a stark warning, projecting that a prolonged disruption could force Asahi to slash its fourth-quarter operating profit outlook by a staggering 83% in Japan and 38% globally if no corrective actions were taken.

Furthermore, the analysts highlighted the risk of financial penalties from major retailers due to the company's inability to meet supply commitments. The market reacted swiftly to the news of the attack, with Asahi's shares plunging by more than 7% in the week following the incident. However, as the company began to communicate its recovery efforts and restart production, investor confidence showed signs of returning, with shares rising by 1.6% in Tokyo. This fluctuation underscores the market's sensitivity to both the threat of cyber-attacks and the perceived effectiveness of a company's response.

Image  Credit -by 663highland, CC BY-SA 3.0, via Wikimedia Commons

A Sobering Industry-Wide Warning

The attack on Asahi is not an isolated event but part of a disturbing trend of escalating cyber threats targeting the food and beverage industry. This sector, with its complex and time-sensitive supply chains, has become an increasingly attractive target for cybercriminals. Threat actors recognise that manufacturers in this space often operate with legacy technology and cannot tolerate significant downtime, making them more likely to pay ransoms to restore their operations quickly. The consequences of such attacks extend beyond financial loss, posing risks to food safety and public health.

Cybercriminals can tamper with product formulations or manipulate quality control systems, potentially leading to contamination or the failure to detect allergens. The UK's National Cyber Security Centre has specifically warned that ransomware remains the most significant threat to the sector, capable of causing widespread operational disruption and financial ruin. The Asahi incident serves as a powerful illustration of this threat, demonstrating how a digital breach can bring a physical production giant to its knees, affecting everything from factory output to supermarket shelves.

Echoes of Other Industrial Cyber-Attacks

The disruption at Asahi mirrors a broader pattern of cyber-attacks that have recently plagued major industrial firms, highlighting a systemic vulnerability across different sectors. The automotive giant Jaguar Land Rover (JLR) offers a chilling parallel. In September, a severe cyber-attack compelled JLR to stop manufacturing at its factories across the UK, Slovakia, Brazil, and India. The shutdown, which lasted for weeks, cost the company hundreds of millions of pounds and caused immense turmoil throughout its extensive supply chain.

The JLR attack, attributed to the Scattered Spider cybercrime group, incapacitated the carmaker by crippling its IT systems. The company was unable to produce or sell vehicles, leading to an estimated £1.7bn in lost revenues and prompting an unprecedented £1.5 billion government-backed loan guarantee to support its supply chain. Both the JLR and Asahi incidents demonstrate how attackers are increasingly targeting operational continuity. They show that crippling a company's ability to produce and deliver goods can be just as, if not more, damaging than stealing data alone.

The Blurring Lines of IT and OT Security

A critical lesson from the Asahi incident is the increasing convergence of Information Technology (IT) and Operational Technology (OT). While the attack did not directly compromise Asahi's brewing equipment (OT), it effectively halted production by disabling the corporate systems (IT) that manage logistics. This interdependence means that a vulnerability in a company's email or ordering system can have a direct physical consequence on the factory floor.

Industrial Control Systems, once isolated and secure, are now more connected to corporate networks and the internet, expanding the potential attack surface. Many of these systems run on legacy technology that lacks modern security features, making them susceptible to malware and unauthorised access. Attackers can exploit these weaknesses through methods like phishing emails or by compromising third-party vendors in the supply chain. The goal is often to disrupt operations for financial gain through ransomware, as seen in the Asahi case.

Fortifying the Digital Brewery

To defend against these evolving threats, cybersecurity experts advocate for a multi-layered defence strategy. This includes robust network segmentation to separate IT and OT systems, preventing attackers from moving from one to the other. Regular software updates and patch management are essential to close known vulnerabilities, while stringent access controls can limit the potential damage an intruder can cause. Whitelisting applications and implementing advanced firewalls and malware protection are also critical components of a strong defence.

Beyond technology, fostering security awareness among employees is vital, as people are often the first line of defence against phishing and social engineering attacks. For an industry as critical as food and beverage, where operational continuity is paramount, these cybersecurity measures are not just best practices; they are essential for survival. The attack on Asahi demonstrates that investment in digital resilience is as important as the quality of the ingredients in the brew.

The Peril of Supply Chain Attacks

Modern manufacturing relies on a complex web of interconnected suppliers, partners, and distributors. This intricate supply chain, while efficient, presents a significant cybersecurity risk. Attackers are increasingly targeting smaller, less secure companies within a supply chain to gain a foothold into a larger, primary target. A 2024 survey revealed that 66% of organisations had experienced a supply chain attack in the past year, making it a pervasive threat.

A breach at a single logistics partner or a component supplier can cascade through the entire network, halting production and delaying shipments for the main manufacturer. The financial and reputational damage can be immense, with downtime costs escalating into millions. The Asahi incident, where the disruption of order and delivery networks brought production to a halt, perfectly illustrates this vulnerability. It shows that a company's security is only as strong as its weakest link, extending to every vendor and partner in its ecosystem.

Ransomware: The Dominant Threat

Ransomware has emerged as the most significant and financially damaging cyber threat facing industrial sectors. In this type of attack, criminals encrypt a company's critical data and operational systems, bringing business to a standstill. They then demand a substantial payment, typically in cryptocurrency, in exchange for the decryption key. The food and beverage industry is a prime target because its reliance on just-in-time production means it cannot afford prolonged downtime, making companies more inclined to pay the ransom.

The attack on Asahi was confirmed to be a ransomware incident, explaining the complete shutdown of its logistical systems. This tactic is highly effective because it leverages the victim's own need for business continuity against them. Globally, ransomware incidents in food manufacturing are on the rise, causing substantial business interruptions and posing a risk to national food security. The increasing sophistication of these attacks, sometimes leveraging AI to automate phishing campaigns, presents a formidable challenge for businesses.

A Global Portfolio at a Glance

Asahi Group Holdings has strategically expanded its global presence through a series of high-profile acquisitions. In 2016, it purchased Peroni, Grolsch, and Meantime from SABMiller, significantly strengthening its European portfolio. The company's global brands now include Asahi Super Dry, Peroni Nastro Azzurro, Kozel, Pilsner Urquell, and Grolsch, each with a distinct market position. The acquisition of Fuller's beer business in 2019 for £250 million added iconic British brands like London Pride to its collection.

This diverse portfolio also includes a wide range of non-alcoholic beverages and food products, marketed under brands such as Calpis, Wilkinson, and Wonda. The company has a strong presence in Oceania and Southeast Asia, operating through a network of renowned breweries and distribution channels. This global scale makes the successful containment of the recent cyber-attack to just its Japanese operations all the more critical, as a wider breach could have had far more devastating consequences for the group's worldwide operations and brand reputation.

The Brewing Process Under the Microscope

Asahi's commitment to quality is evident in its meticulous brewing process. The journey of its beer begins with carefully selected ingredients, including two-row barley, chosen for its large, uniform kernels and high starch content. The company even operates a pilot barley farm to research and develop improved plant varieties. In the brewhouse, a mixture of rice, corn starch, and malt is heated and converted into a sweet, clear liquid called wort. Hops are then added to the wort, which is boiled to create the characteristic aroma and the beer's bitter flavour.

A key element in the creation of Asahi Super Dry is a proprietary yeast strain, No. 318, which is known for its high fermentability and ability to produce a crisp taste. The company has conducted extensive genetic analysis of this yeast to optimise fermentation conditions. After fermentation, the beer undergoes filtration and is then packaged for distribution. Asahi has also developed new brewing control technologies to improve foam retention, ensuring the beer's visual and taste appeal lasts until the final sip.

Innovation Beyond the Brew

Asahi's innovation extends beyond its beer production. The company is actively involved in research and development to utilise by-products from the brewing process in sustainable ways. For example, beer yeast, a by-product of fermentation, is processed into the nutritional supplement "Ebios" and also used to create yeast extracts that add flavour to food products. The company has also developed technology to process the previously unused yeast cell wall, which contains ingredients beneficial for plant growth, into agricultural materials.

In its beverage portfolio, Asahi is expanding its range of non-alcoholic and low-alcohol products. This initiative is part of the company's commitment to responsible drinking, aiming to create a society where both drinkers and non-drinkers can enjoy beverages according to their personal preferences and health considerations. This focus on sustainability and social responsibility is a core part of the Asahi Group's corporate identity, alongside its primary mission of delivering high-quality beer, beverages, and food to a global market.