What are the popular health foods for 2014 in Japan?


Big Site Last week the Health Food exhibition was held again at Big Site exhibition spot in Tokyo. Once a year the major health food providers promote their new health food products. It is the place to gain insights for the expected upcoming trends in the Japanese health food market. Based on my impression unlike earlier years I saw this year a big shift away from the usually promoted vitamins, minerals or then the green vegetables juice powder to much more herbal only remedies. Furthermore unlike last year the yoghurt boom seemed to be over on the development front. This does not mean that you will not see new yoghurt types on the shelf this year, but I guess the consumer response was not as positive as expected and not much further R&D investment occurred. I wonder what this shift to more herbal only products means for the general public. Is the demand for drinks like vitamin water or ionic drinks already fading? Most likely consumers are expected to shift slowly but surely to products from Africa like rooibos tea as a healthy choice or then acai from South America with lots of polyphenols are just examples of products that gain more foothold in Japan recently.
This year during the expo the focus was on products and manufacturing sites in Kyushu and Okinawa. At first Ukon (turmeric) from Okinawa seems the most obvious and got quite some attention, but I have to say a wide variety of herbs from the region was promoted. Kyushu is actually an area with a lot of health food related business. Just have a look at the overview of the manufacturing and research sites in English from the METI site for all the biotech related companies. The amount of different breweries and health food companies is definitely impressive!
Along the same lines when Japanese business is fighting to keep their turnover, the health food industry in Japan was growing 0.6% for 2012 to a total volume of JPY million 2,088,000. Below shows an overview of the top 10 companies in Japan, when Tasly Japan impressed me most from moving within one year from spot 20 to 10. (After the company name their respective sales turnover in million Japanese Yen is listed, plus their growth in percent experienced over one year.)

1. Kyusai, JPY mio 28,985 (6.3%)
2. Eigao, JPY mio 26,233 (2.9%)
3. Media Prais, JPY mio 25,275 (-4.3%)
4. Yasuya, JPY mio 18,327 (n.a.)
5. Everlive, JPY mio 14,094 (n.a.)
6. Asahi, JPY mio 12,637 (-8.8%)
7. Kenkoukazoku, JPY mio 12,615 (-4.5%)
8. HRK, JPY mio 8,098 (43%)
9. Ing, JPY mio 5,499 (-3.7%)
10. Tasly Japan, JPY mio 2,768 (69%)

What is your favorite Japanese health food? I must confess it took me a couple of years until I got used to the taste of “Aojiru” (a vegetable power mixed either with cold or warm water), which I prefer to mix into soymilk, because then it truly tastes marvelous.

Brought to you by Sibylle Ito (伊藤シビル)

Admiring Rohto marketing strategy


I must say I enjoy following the business strategy of Japanese Pharma companies. Although most of the companies have weak pipelines (limited about of new drugs to come out), while at the same time their block buster drug patents is expiring soon, as a consequence to counteract the expected drop in turnover many companies are expanding now their product portfolio with high profit products. One interesting example to observe is Rohto. Thinking simply how you can increase profit to the maximum, you dream about a product that has a very low creating cost and can then be sold to a high price. Along these lines, I am truly amazed about Rohto, because they are creating a new market of the “very high priced mineral water”. This marketing strategy is simply genius, because would you have thought about selling water from Takushima (World heritage site)? Considering the site, a price of JPY 560 for 2 bottles of 300ml seems just right?! With the right branding, this water cannot be compared to any foreign or local mountain water.
For sure the timing to bring out this brand is absolutely perfect, because I see now after Fukushima more and more people concerned about the source of their water. Using in their ad then the obvious fact that 60% of the body consists of water, so why shouldn’t I want to have the best water possible for my body? I might potentially not taking good enough care of my body, but honestly I prefer to stay with Brita filtered tap water.

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Outlook of Japanese pharma


With the recent news of Takeda as Japan’s largest drug maker might be buying the Swiss rival Nycomed it is the perfect timing to look again how Japanese pharma is doing. Furthermore the financial figures are out after the yearly closing in March (based on data found in Nikkei Shimbun). Although Takeda as leader shows the biggest profit before tax, looking at the growth in percentage compared to last year, Daiichi Sankyo and Eisai with 68% resp. 67% stand out.

Takeda:
total turnover 2011: JPY Mio 14,193 (down 3%)
profit before tax 2011: JPY Mio 2478 (down 17%)
forecast turnover 2012: JPY Mio 14,500 (up 2%)
profit before tax 2012: JPY Mio 2500 (up 1%)

Otsuka:
total turnover 2011: JPY Mio 10,902 (up 1%)
profit before tax 2011: JPY Mio 810 (up 20%)
forecast turnover 2012: JPY Mio 11,700 (up 7%)
profit before tax 2012: JPY Mio 820 (up 1%)

Daiichi Sankyo:
total turnover 2011: JPY Mio 9673(up 2%)
profit before tax 2011: JPY Mio 701 (up 68%)
forecast turnover 2012: JPY Mio 9700 (same as previous year)
profit before tax 2012: JPY Mio 450 (down 36%)

Astellas:
total turnover 2011: JPY Mio 9539 (down 2%)
profit before tax 2011: JPY Mio 676 (down 45%)
forecast turnover 2012: JPY Mio 9740 (up 2%)
profit before tax 2012: JPY Mio 810 (up 20%)

Eisai:
total turnover 2011: JPY Mio 7689 (down 4%)
profit before tax 2011: JPY 673 (up 67%)
forecast turnover 2012: JPY Mio 7000 (down 9%)
profit before tax 2012: JPY Mio 695 (up 3%)

When I look at these forecasts I wonder whether the purchase of the Indian site for Daiichi Sankyo doesn’t work out in the long run (shift from a positive 68% increase of profit to a downgrade of 36% in the profit before tax). Further I am wondering what kind of miracles Astellas is able to create, when with roughly the expected same turnover a much higher profit before taxes is expected. Personally I will for sure keep a close eye on Astellas this year. There might be some special magic going on and everyone can learn from it.

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Who profits really from a ban?


Last year I have observed that more and more Japanese chemical or biotech related companies started to move into the local health ingredients market. One example is the picture on the side: Glucosamine from Suntory. I believe the market for health ingredients was successfully started off with Otsuka Pharmaceuticals. Vitamins and supplements are only recently becoming widely available in Japan. One of the most successful promoted brands was Nature Made, which offered a high priced product with rather low actual vitamin content, which is produced and marketed in Japan by Otsuka Pharmaceuticals. While now more and more local companies are offering health food ingredients I was surprised to see the Japan’s Ministry of Health, Labour and Welfare (MHLW) intention to blacklist 125 nutrients including forms of glucosamine, aloe vera and krill, because it says they are not being used in products, according to the US Department of Agriculture Foreign Agriculture Service. Others that appear on the list include isomaltodextranase, chitin, quercetin, mulberry bark extract, ginger extract and calcinated calcium and Eucalyptus leaf extract. If cuts are made Japan’s approved list will shrink from 418 to 293 approved substances. According to the USDA the MHLW was requesting additional information from the companies concerned that may wish to continue using the ingredients. “The stated reason for the deletions is that the ministry believes these additives are not currently being used in foods sold in Japan,” USDA said.
Honestly I am wondering what the actual reason for this step is. The products stated are not that unusual, plus at the same time offered by local companies. Potentially the difference of the end product lies solely in the place of manufacture. At the end, who is affected? All those local end users who buy only local products, paying more than double of the price for the same product containing a smaller amount of actual health ingredients. I am sure the local chemical or biotech industry does not mind this blacklist, which will stop certain foreign imports.

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Popular dietary supplements in Japan


In the most recent Japanese Health Industry News the top ingredients for the most popular 60 dietary supplements sold in Japan in 2010 were presented. Honestly I am not surprised to find collagen in the top spot for this year and next year. Considering how much Japanese women are concerned about the youth like appearance of their skin, collagen seems to be the common popular solution. You can find collagen in health drinks (for example Meiji Amino collagen, Shiseido collagen) or ramen, plus some restaurants offer special skin friendly collagen hotpot. Then on the second spot glucosamine is expected to sell well for this year and as well in 2011. Glucosamine is covering a different age segment: the elderly, who are experiencing problems with their joints. On the third place an anti-aging product: Placenta. Placenta cosmetics is promoted to stimulate cell renewal function and helps to slow down the aging process.

Out of popular 60 health products sold in Japan, the most popular ingredients for dietary supplements in 2010:

1: Collagen (30 products)
2: Glucosamine (23 products)
3: Placenta (14 products)
4: Hyaluronic acid (11 products)
5: Barley leave powder (6 products)
6: Chondroitin sulfate, dietary supplement for treatment of osteoarthritis (5 products)
6: Blueberry extract (5 products)
6: Turmeric (5 products)

Then for 2011 the expected most popular ingredients in dietary supplements:

1: Collagen (21 products)
2: Glucosamine (19 products)
3: Placenta (15 products)
4: Barley leave powder (7 products)
4: Ginger (7 products)
4: Peucedanum japonicum, traditional herb in the Ryukyu Islands, works as an anti-oxidant (7 products)
7: Chondroitin sulfate, dietary supplement for treatment of osteoarthritis (5 products)
7: Turmeric (5 products)

Honestly I expected to find some vitamins in this list like in other countries, but it seems that Japanese focus is more on beauty, getting enough greens or then keep the liver healthy with Turmeric. Apart from Peucedanum japonicum, I expect another product to become popular in the near future in Japan: SAM-e. Presently it is forecasted on 10th position. S-adenosylmethionine (SAM-E) is an amino acid that is used in the treatment of many conditions including depression, liver disease, osteoarthritis, migraine headaches and others. No matter whether you are taking any dietary supplements or not, wishing you the best health,

Sibylle Ito (シビル伊藤)

Do you know Sekisui Chemical: on the way to a globally active company


The recent news on “Business wire” shows the appetite and cash richness of Japanese companies, who increase their global presence by buying up foreign promising companies. One example is Sekisui Chemical Co., Ltd., who is in the process of acquiring Genzyme’s Diagnostic products business for $265 million in cash. For Sekisui it is important to gain access to the diagnostic product lines and technologies. With the goal to keep a winning team unchanged, Sekisui has agreed to offer employment the 575 employees (including senior management), and plans to maintain operations in all of the business’s current locations.
So why is this purchase such a big deal you might wonder. From a global perspective biotechnology in Japan is still in rather early stages. Sekisui’s deal will allow a critical step ahead with Genzyme’s Diagnostics business, which provides critical raw materials and enzymes, clinical chemistry reagents, rapid tests and infectious disease products to manufacturers, clinical laboratories, distributors and health care providers. In more simpler terms: The business is focused on the cardiovascular, diabetes, renal, and infectious disease areas, and is a leading provider of HDL and LDL cholesterol tests. The decision for Sekisui to gain access to the global diagnostics market did not come overnight, because both companies had worked together for more than 15 years. According to “Business wire” the business will be operated as part of Sekisui Medical Co., Ltd. (division of Sekisui Chemical), which is based in Tokyo. For sure it becomes now easier for Sekisui to expand its global presence, but I believe more important to increase the inflow of needed products into the Japanese market at the same time.
Although in the late 90s to the year 2000 the Japanese government made a commitment to develop biotechnology as a national strategy, this boom has burst in the meantime. For sure the previous goal to make the Japanese market an attractive environment where companies from all over the world can compete, engage in research, and produce and sell products, has become wishful thinking. With the example Sekisui I hope with the increased access to newer diagnostic technologies, the actual end-user – Japanese patients – can profit from it. In the past there had been several goals of the government to fast track the approval for new drugs and medical equipment, but it seems to me there is still a long way to go. For sure my hope and dream is that the medical support and availability of drugs is increased in Japan.

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No choice but need to hire from abroad?


When you think about a multicultural/international working environment I believe most of you agree with me that a multinational Japanese company would not pop up in your mind. Gradually Japanese companies seem to move towards a multinational approach due to market demands that cannot be met locally.
For example Uniqlo (major apparel company) and the chemical maker Toray Industries Inc. are expanding their business alliance for joint development of Heat Tech. (Heat Tech: Rather thin thermo clothes or underwear, which became a huge sales hit locally.) Heat Tech is presented as advanced fiber technology in Japan, but it was actually developed by Chinese researchers abroad at a center Toray set up in Nantong in China. It seems that Chinese universities generate more competent workers for the textile industry, which are then hired at the Toray research center, who has 200 such graduates working with them.
Another example of a more international approach is IHI Corp., who started hiring young South Koreans graduates, because the basic academic skills of Japanese science and engineering majors have weakened. So far they are employing 12 South Korean, who are working on designing automobile parts and developing information systems. Further at Sasebo Heavy Industries Co according to Tae-Jin Kwon, a previous South Korean managing executive officer, who was surprised about the gap he found in Japan at the use of information technology at work. In order to turn business around the goal is to become as cost-efficient as the South Korean rivals amid rising steel product and other materials prices.
In order to keep up with the global speed of development of optical technology-based diagnostic devices, Nitto Denko Corp. had set up a R&D center in Singapore, because development and operations are progressing much faster outside of Japan compared to the local R&D centers. The major difference achieved seems to be based on the use of the leadership skills of a nuclear physicist from Thailand, who graduated from a U.S. university.
Based on my experience with life science instruments from a global perspective Japan has no choice but to catch up in some sectors, because the common local standards cannot measure up anymore to the global needs. I truly hope more Japanese companies understand the urgent need for keeping up with global standards, especially as most likely the end-user or potential patient is not even aware of the actual risks involved due to different standards.

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