Amidst declining domestic beer market, Japanís 2nd largest brewer is now seeking market expansion in the promising health and functional food and beverage segments. Kirin Holdings faces difficulties in maintaining its yearly income in the face of fast-changing consumer demographics with a growing ageing Japanese population that is rapidly shifting away from alcoholic drinks in favour of healthier alternatives.
Kirinís over reliance on the beer segment, which contributed almost 40% of its revenue, certainly does not help it in the immediate term as it faces its 13th consecutive drop in domestic beer sales.
Kirinís competitor, Asahi has invested over US$11 billion over the past 2 years to buy beer brands across Europe like AB InBev. Kirin, on the other hand, has failed to seal overseas acquisitions as it could not find suitable targets. In 2017, Kirin was one of the potential contenders for Vietnamís SABECO but Kirin decided to withdraw as it found the asking (bid) price too high to justify.
Kirin is now looking at the health foods and beverage business as its next target for acquisition and expansion. ďI wish we could just focus on the beer business ó that's something we fully understand. But we cannot achieve sustainable growth from that business alone," said Yoshinori Isozaki, Kirinís Chief Executive.
Cash-rich Kirin, equipped with cash from 2017 sale of Brazilian beer business for US$1.1 billion, is looking at the Asian markets for growth.
Yoshinori added that Kirin now aims to build its health food and drink business into one of its growth drivers, particularly as growing health awareness is turning consumers in developed economies toward beverages with fewer calories than beer, for instance. At present, Kirin makes health products such as probiotic drinks, yoghurts and supplements.