Yakult, Kirin strengthen partnership to grow functional food sales
beverage group have agreed to jointly develop new functional foods
for the domestic market and share manufacturing and distribution
resources to increase efficiency, writes Dominique Patton.
The firms have been selling each other's products in their vending machines since 2003 and the new agreement will also strengthen this partnership.
But it will also lead to a sharing of research and product development resources as well as reciprocal use of manufacturing and distribution functions in existing food and beverage activities.
The aim is to improve competitive advantage in an increasingly tough marketplace. A growing health food offering from the mainstream food companies, particularly in established functional food markets like Japan, will put pressure on niche brands.
Kirin expects the Japanese market for health food, functional food and supplements to grow 70 per cent to as much as £15 billion (€22.6bn) over the next five years.
Yakult also has an alliance with France's Danone group, which was strengthened further last year. The new alliance with the French group involves closer cooperation on R&D and entry into new markets, with India the most recent target by the pair, announced this April.
The alliance with Kirin involved each firm buying a small minority stake in the other.
Kirin is currently preparing to sell products made by its Well-foods division through the Yakult Lady network, and the companies will investigate selling Yakult Honsha health drinks through Kirin's sales channels.
Yakult products are being produced by at the Tokyo plant of Kirin Beverage subsidiary Koiwai Dairy Products from this month.
