Kirin Yakult NextStage bears first fruit

The two Japanese companies first announced their intention to formalise their relationship in June 2005, after having already sold each others' products in their vending machines since 2003. In a climate where health and functional foods has become an important - and competitive - area for food companies, Kirin and Yakult decided that the best way to gain a competitive advantage was to combine R&D strengths in their respective areas. The total Japanese market for health food, functional food and supplements is estimated to be worth around US$27 bn by US-based analyst Paul Yamaguchi and Associates, of which FOSHU foods (foods for specified health uses) account for $6 billion, non-FOSHU functional foods $11 billion, and dietary supplements around $11 billion. For the last 15 months the two companies have kept the details of their working relationship under wraps, only now announcing that the joint venture, to be formally established on October 1, will be known as Kirin Yakult NextStage Company (KYNS). BBcube will be launched the very next day. As befits a product developed by a company capitalized 55 per cent by Kirin and 45 per cent by Yakult, BBcube combines ingredients devised by both parties: Kirin's BYC3 dietary fibre and Yakult's Bifidus2 bacteria. The importance of the KYNS for the companies' is underscored by plans to transfer to it their existing, discrete health food businesses. Kirin, which sees health and functional foods as its fourth core business pillar after alcoholic beverages, soft drinks and pharmaceuticals, will transport the main business of Kirin Well-foods to KYNS as of 1 January 2007; part of Yakult Honsha's health food business will also be transferred, but specifics are not available at present. KYNS is to be staffed by employees recruited from both partners, and particularly from Kirin Well-foods. The aim is to develop streamlined operations from product development, manufacturing, through to marketing and sales - and KYNS expects to increase its operating base quickly with the development of more products. Not only will KYNS utilize resources of both partners, but the companies have said they expect the venture to smooth the way towards sharing production and logistics capabilities in other areas too. Indeed some Yakult products are already being produced by at the Tokyo plant of Kirin Beverage subsidiary Koiwai Dairy Products. While vending machines remain an important outlet, BBcube will be sold through Kirin Well-foods' mail order channel and Yakult's door-to-door sales schemes.

Kirin Yakult NextStage bears first fruit

The first product from the collaboration between Kirin Breweries and Yakult Honsha to develop health and functional foods will hit the market next month. Called BBcube, it brings together a fibre from Kirin and a bacteria from Yakult into one product aimed at "supporting healthy lifestyles".

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