![]() “Leading nutra firms are actively pursuing mergers and acquisitions (M&A) of struggling companies to expand their scale of operations and to survive in an increasingly competitive industry. Kirin’s move ‘logical and reasonable’ – Japan expertĬontrary to market response, Kirin’s acquisition of Blackmores is “logical and reasonable”, a nutraceutical industry expert from Japan told us. “We aim to improve our corporate value over the long term, not to be swayed by the daily movements of stock prices,” Russell Roll, manager, Kirin Holdings Corporate Communications Department told us in response to market reaction. “The fact that 10 per cent of its total sales are always generated from new products suggest that they have high product development capabilities,” said Minakata.ĭespite the potential gains, Kirin’s shares fell by three per cent after making the announcement, Reuters reported. “They have established a method to collect consumer data from various countries from various sources in a timely manner, analyse it, and apply it to new product development. It also hopes to tap on Blackmores’ insight in APAC’s nutraceutical regulatory and consumer demands. Kirin’s other functional ingredients include citicoline and human milk oligosaccharides (HMOs) which it said could be incorporated into functional drinks, digestive supplements and milk powder. “By introducing their knowledge, we believe we can strongly promote the development of LC-Plasma which is backed by the high evidence,” said Minakata. “Blackmores has established a sales method in which pharmacists and medical advisors recommend products based on factors such as the individual’s physical constitution. “Consumer surveys conducted in the areas in which Blackmores operates show that in all countries, improving immunity is the top-ranked purpose for taking supplements. “The sales composition is very well-balanced,” said Takeshi Minakata, director of the board, senior executive officer, president of Health Science Division in charge of Strategy of the Health Science Domain.Ĭiting data from PwC Consulting, Kirin added that immunity and resistance ranked among the top three purpose of taking supplements among consumers from China, Thailand, Malaysia, Indonesia, and Australia. “The company’s sales revenue is approximately JPY 60 billion, with Oceania accounting for just under half of the total, South East Asia accounting for approximately 30 per cent and China accounting for the remainder. In line with its growth ambitions, Kirin is hoping to piggyback on Blackmores’ distribution presence across APAC. Its long-term plan is to scale up its Health Science Business Division from JPY$103.6bn (US$760m) in 2022 to JPY$200bn (US$1.47bn) in 2027. Last year, the firm also said it was in talks with South East Asian firms in incorporating LC-Plasma into dairy products. To date, it has launched 45 LC-Plasma products with its business partners in the form of beverages, green juice, candies, jellies, and powder. Between January and May last year, beverages containing LC-plasma saw their sales volume went up by 40 per cent to 2.6 million boxes. It has also teamed up with Coca-Cola and Morinaga, in launching LC-Plasma in beverages, powder, and gummy forms. Kirin has launched finished products containing LC-Plasma branded iMUSE. Back in 2021, Blackmores’ largest shareholder and son of the company’s founder, Marcus Blackmore, previously criticised the board for a perceived lack of innovation.Īs a key player in Japan’s Foods with Function Claims (FFC) sector, Kirin’s forte lies in food and beverages containing Lactococcus lactis strain Plasma, or LC-Plasma – its proprietary ingredient and also the first permitted by Japan Consumer Affairs Agency (CAA) to make immune health claims. ![]() While the majority of Blackmores’ products are in the supplement format, Kirin pointed out that consumer research has shown the demand for gummies and functional drinks. ![]() The two companies had been in talks for the acquisition since last year, Kirin revealed to NutraIngredients-Asia, adding that Blackmores’ management is expected to continue to lead the firm. Last Thursday, the two firms announced their acquisition plan valued at AUD$1.88bn (US$1.24 billion). The Australian complementary medicines leader can expect to gain from Kirin’s R&D capabilities, especially in terms of dosage formats and environmentally friendly packaging.
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