Local Japanese media NHK reported that Suntory will launch the health foods business to meet growing demand of affluent and health-conscious Chinese consumers.
NutraIngredients-Asia has confirmed with Suntory that the initiative would take place via an existing JV company known as the China Jiangsu Suntory Foods formed in 1984.
The JV’s main business was to manufacture beer, soft drinks, and snacks in its early days. Some of the well-known products are Oolong tea and café latte.
This time round, the JV will introduce more of Suntory’s health foods products into China via e-commerce platforms from around August, a spokeswoman from the public relations department of Suntory Holdings told us.
“The main channel is going to be electronic commerce, but we will be considering other channels in the future,” she said.
The move will build on Suntory’s current health foods portfolio in China, where it is already selling one of its flagship product – the Essence of Chicken under the Suntory BRAND’s label.
She revealed that moving forward, the JV would sell other products which are also part of the same label and also sell drip coffee products via vending machines.
“Since 1984, when CiticGroup and Suntory established the JV Company, we have built a good relationship for a long time. By leveraging Citic Group's strong network and its high credibility in China with Suntory's business assets, we agreed that further growth could be made through the development of new business in China,” she said.
According to Suntory’s FY2019Q1 financial results, the company’s health supplement portfolio brought in JPY$13.4bn (USD$124m), which is 3.4% lower than the same period last year and commented that the “Essence of Chicken continued to struggle.”
Japan business
Suntory is a major health food innovator – in particular, a leader in the Foods for Special Health Uses (FOSHU) category in Japan.
Some of its commercial success came from the launch of its black oolong tea and its lyemon Tokucha tea.
However, sales volume has slowed down in the first quarter of FY 2019, with the FOSHU and Foods with Function Claims (FFC) portfolio witnessing a 5% decline.
In contrast, sales volume of the other beverages, such as the Green Dakara, Boss coffee, and Tennensui mineral water jumped by 20%, 6%, and 4% respectively.