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Yakult USA volumes ratchet up as it prepares to open first US plant

By Elaine Watson , 30-Sep-2011
Last updated on 30-Sep-2011 at 14:26 GMT

Japanese probiotic pioneer Yakult is now selling more than 118,000 bottles of its signature probiotic drink a day in the US (based on average sales Jan-June 2011) compared with 110,000 in mid-2010 and 90,000 in 2009.

While this is small fry compared with the 3.4 million bottles a day it sells in Mexico or the 1.69 million in Brazil, Yakult has been growing steadily in the US since entering the market in late 2007, and plans to open its first US factory in Fountain Valley, California, late next year.

760,000 bottles per day capacity

A short drive from Yakult USA’s HQ in Torrance, California, the new factory will initially produce 250,000 bottles of Yakult a day, but could ultimately make up to 760,000 a day, said a spokeswoman, who was speaking to FoodNavigator-USA at the American Dietetic Association annual conference and expo in San Diego this week.

“Three years ago we were still trying to explain to people what probiotics were all about, but now awareness is much higher.”

Engagement with dieticians and health professionals was a key part of Yakult’s strategy in the US, where it has just launched a new website at Yakultusadietitians.com for dieticians containing podcasts, a discussion forum and downloadable materials for patients and practitioners, she said.

The new Fountain Valley factory would supply stores in California, Nevada, Arizona, Texas, Colorado and New Mexico, which are currently supplied by Yakult’s factory in Guadalajara, Mexico, but would also provide a platform for expansion into new regions.

“We’re in Asian and Hispanic stores in several more states, but for the major chains such as Kroger, Safeway, Supervalu, H-E-B and Walmart, we’ve been focusing on six states and we’ll build from there.”

Health claims

Studies conducted using Yakult’s proprietary probiotic strain Lactobacillus casei Shirota (LcS) suggested it could potentially confer a wide range of health benefits from helping to strengthen the immune system and tackle GI tract conditions such as Crohn’s disease, to reducing the risk of certain cancers.

However, claims made on pack in the US would remain pretty generic for the time being, she said. “All we say at the moment is ‘helps balance your digestive system’.”

While Yakult has conducted several human clinical trials to show that LcS can reduce the incidence and severity of upper respiratory tract infections, health claims along these lines have not been approved in the EU, and do not feature on pack in the US, she said.

“We might make further claims in future but for now we are not talking about immune health on pack [an area that has landed other big names in probiotics in legal hot water lately].”

However, more research was planned in the US to support future claims this side of the Atlantic, she said. “We’ll look at claims again after conducting more clinical trials of Yakult specifically on the US population.”

Expansion plans

While more than half of its revenues are still generated in Japan, Yakult has been steadily increasing its presence in overseas markets, and recently announced plans to construct its second production facility in Guangzhou, China.

The firm, which currently has two plants in China, one in Guangzhou and the other in Shanghai, is also building a factory in Tianjin set to become operational within the 2012 fiscal year.

Net sales in the first quarter of fiscal year 2012 (April 1 to June 30, 2011) were up 1.9% to 76.014bn yen. Net income was down 31.7% to 2.16bn.

Sales in the Americas were up 7.5% to 9.908bn yen, but were higher on a constant currency basis as the strength of the yen against the dollar meant the firm took a big hit when translating sales from dollars to yen.

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