As Kirin is increasingly focused on Nutrition, it has recently made its move by offering US$1.85 billion for a stake in Australian-based vitamin supplier, Blackmores.
Kirin considers now as the right time for the acquisition as Chinese consumers now have a growing focus on health and nutrition after the pandemic.
Blackmores had faced bad times in the past for its over-reliance on the diagou trade to get its products into China. The pandemic has led to the evaporation of the diagou network, and with that, the share value of Blackmores plummeted from US$200 to US$76.65. Kirin has offered to purchase Blackmores at US$95 a share.
The higher price tag however comes with the ambition of building Blackmores into a much bigger enterprise, including hitting US$1 billion in revenue in just a few years, from the current US$650 million in annual sales.
For Kirin, which has owned the old Lion Nathan drinks business in Australia since 2007, the acquisition of Blackmores is all about building a health business into China as well as the rest of Asia. Kirin is diversifying away from beer into health-sciences related products. Blackmores is set to offer Kirin a ready-made platform for its existing range of products, and this is why it was willing to pay a premium for the already-established vitamins maker. Specifically, Kirin sees Blackmores vitamins as a good fit for its LC-plasma (lactococcus lactis), Citicoline, and milk-based supplements, which can be added to vitamins, drinks and digestives.
Kirin hopes to capitalise on Chinese consumers, who are more concerned on boosting their immunity and general wellness. With an already large Chinese distribution footprint, Kirin has also built its distribution in Thailand, Malaysia and Indonesia, which it is betting will turbocharge Blackmores’ growth, as well as its own.
Currently, health sciences products represent 5% of Kirin’s group revenue, but it aims to double this to 10% by 2027.