Kirin targets dairy for global expansion

The group announced today that it has agreed to purchase all shares in Australia-based National Foods from San Miguel for €1.7bn to expand its presence in the growing health foods market. Kirin will join an increasing number of global companies expanding into the production of higher value goods like nutritional products. One of the major drivers behind this industry shift has been an attempt to offset increasing ingredients costs through diversification. Just last week, Kirin - currently the second largest brewer based in Japan - said it was raising prices for its core beer brands for the first time in seventeen years as result of tightening commodity costs. The company now says it is aiming for "a quantum leap"​ in sales growth by 2015, through extending its focus to new product ranges and international markets. The company says it expects part of this increase to be achieved through a targeted growth in overseas revenues of 30 per cent. "By adding National Foods' strong brands to its product portfolio,​ Kirin​ is laying the strong business foundations in the field of "food and health" business in​ Asia​ and​ Oceania​,"​ the company stated.​ In the Australian market alone, the purchase of National Foods could prove a prudent strategy if the country's dairy market continues its recent growth momentum. Between 2001 and 2006 the markets for yoghurts and non-milk dairy products in Australia have risen by 50 per cent and 34 per cent respectively, according to consumer analyst Euromonitor. By comparison, growth in sales of milk products has slowed down to just 14.3 per cent. Kirin will also expand its product portfolio of functional and dairy goods. Since June 2005, Kirin has been in a formal collaboration with Japanese dairy group Yakult to produce functional and well being products in the country. The group is not alone in expanding into production of health and wellbeing products for the food and beverage industry. Leading multinationals including Danone and Nestle have during the last year announced plans to refocus their entire operations towards the health and nutrition markets for improved profitability.