Kirin ploughs funds into US supplement firm as its health focus intensifies
For instance, Kirin plans to develop and launch products using Lactococcus Plasma, Toshiaki Hyodo from Kirin’s corporate communications told NutraIngredients-Asia.
Billions of yen has been invested into Thorne, Hyodo added, and after injecting funds, both Kirin and Mitsui will each own 30% of Thorne’s shares.
This investment will also enhance Thorne’s operations within US and Japan.
Based in New York, the core business of Thorne is to develop, manufacture, and sell supplements, and providing home testing services.
It has been providing personalised nutrition through home test kits in recent years and recorded sales of approximately 10 billion Japanese yen.
100 billion yen target
Kirin has been working on expanding its health supplements interests amid a declining beer market.
For instance, it has launched five products containing Lactococcus Plasma under the brand iMUSE last year. These products include chewable supplements, lactic acid drinks, and yoghurt.
It has even launched potato chips containing Lactococcus Plasma with Calbee.
Notably, the iMUSE professional chewable supplement saw outstanding sales performance. Its sales figure was “four times as much as” the targeted amount, Hyodo revealed.
“Across the nation, the cumulative number of medical institutions selling the iMUSE professional supplement exceeded 1,000. The supplement is also adopted by many medical institutions,” he said.
In the next two decades, Kirin aims to achieve sales amounting to 100 billion yen in its portfolio of food and beverage products that address health concerns, he added.
Commenting on the foray into health business, CEO Yoshinori Isozaki earlier expressed the wish to "just focus on the beer business”. However, he acknowledged that the firm “cannot achieve sustainable growth from that (beer) business alone.”
As such, the firm will “do bolt-on acquisitions in health if necessary” in order “to buy time", he said.
On the latest health products investment, Kirin said it aims to “co-achieve sustainable growth with our societies by realising value creation, addressing social issues and understanding consumer expectations via the core businesses (beverages, pharmaceuticals and bio-chemicals) of the Kirin group.”
Rebound in beer sales
Kirin’s beer business has unexpectedly improved as seen from its performance in Q1 of this year.
In contrast, its pharmaceuticals and bio-chemicals business paled in comparison, with revenue falling from 89.9 billion yen in Q1 of 2017 to 83.1 billion yen this year, which is a 7.5% decline.
The revenue and profit decline was attributed to “the increased use of generics and reduced buying ahead of the expected drug price revision,” according to Kirin’s presentation of its financial results.
On the other hand, its integrated beverage business sector in Japan recorded a revenue of 222.7 billion yen, which is 51.6% of its total revenue, and the biggest contributor to the firm’s business in Q1 of 2018.
This figure is slightly higher than the 215.6 billion yen recorded in the same period last year, which the company commented as “a strong start to the year that exceeded the plan”.