Sales of Lactic Acid Beverages Nearly Overtake Vegetable Juices in Japan
Kids are told to chug lactic acid drinks like Calpis and Yakult rather than "drink" their vegetables.
What’s new: 2023 was the year that demand for lactic acid beverages nearly overtook demand for traditional vegetable juices in Japan. While it's been a long time coming, food tech experts across the country are curious as to how this turn of events came to pass.
Context: According to the Ministry of Health, Labor and Welfare, the average per capita vegetable intake of Japanese people is only about 280 grams, compared to the ministry's recommended daily vegetable intake target of 350 grams. Moreover, this target has not been met once in the past 10 years until the most recent survey in 2019, and intake has remained flat (Ministry of Health, Labor and Welfare "National Health and Nutrition Survey in 2028"). Manufacturers of plant-based beverages are well aware of this situation and are, naturally, eager to make up the difference by selling more vegetable juice.
What’s happening: Sales of vegetable drinks have, however, been sluggish for more than 5 years. In response to the sharp rise in prices of raw materials for vegetable drinks, market leaders Kagome (カゴメ) and Ito En (伊藤園) implemented price increases in July 2022 and February 2023, respectively. This undoubtedly had an impact on the decline in sales. Recently, the price of the ingredients of vegetable and fruit juices has risen significantly, and Kagome and Ito En are preparing to raise the price of their vegetable drinks again in February of this year, which will, undoubtedly, cause a further decline in sales in the short term. However, the 30 billion yen (about $207 million) market shrinkage of the market over the past five years cannot be explained by price increases alone.
"Demand has shifted to lactic acid beverages. In fact, the market for lactobacillus beverages has grown rapidly in recent years and has now surpassed that for plant-based beverages.” - Daisuke Honjo, president of Ito En
Why it matters: The reversal in demand appears to be a case of the triumph of product positioning and other marketing techniques by the makers of lactic acid beverages.
Vegetable juices have traditionally had a strong following because of their perceived value as being somehow good for health. Lactic acid beverages, on the other hand, are now being positioned as "functional foods" with specific, scientific claims such as immune system enhancement, improved sleep quality, and reduction of stress.
By the numbers: Despite attempts “to juice” the numbers, the data do not lie, and it does not look good for the makers of veggie smoothies.
Shrinking Market: The market size of plant-based beverages, which was approximately 200 billion yen ($1.382 billion) in 2018, is expected to decline to approximately 170 billion yen ($1.175 billion) in 2023.
Market Leaders Struggling: Kagome (カゴメ) is the leader in vegetable beverages, and as of the third quarter of fiscal year 2023, sales in the beverage category were down 2% year over year. One of the most underperforming products is its flagship product, Vegetable Seikatsu 100. Sales of this series continued a negative trend, declining 4% year on year in fiscal year 2022 and 6% year on year in the first half of fiscal year 2023.
At Ito En (伊藤園), a major vegetable beverage company, sales of vegetable beverages declined 12% year over year in fiscal year 2022 and 10% year over year in the first half of fiscal year 2023, a double-digit decline.
Driving the news: It seems that the vegetable juice manufacturers have been side-swiped by the slowly growing phenomenon of the shift to lactic acid beverages.
A Brief History of the Lactic Acid Beverage Segment: Lactic acid drinks have a long history in Japan. Since 1919, Calpis, the original lactic acid drink, has maintained a strong following1. Calpis, "a refreshing blend of sweet and tangy cultured milk produced by a natural process using lactobacilli, yeast and fermentation," has its roots in Mongolia, where a visiting Japanese businessman named Kaiun Mishima suffered from an upset stomach during an extended trip in the early 1900s. Legend has it that he tried drinking the local cultured milk and was miraculously cured. Upon his return to Japan, Mishima developed his own cultured milk product, which became Calpis. The rest is history!
Similarly, in 1935, a young Japanese doctor named Minoru Shirota launched a fermented milk drink called Yakult after spending years researching and developing a unique strain of lactobacilli which would help suppress harmful bacteria in people's intestines that would often cause illness. The discovery is known as Lacticaseibacillus paracasei strain Shirota. Since not many people have a microorganism named after them, you have to admit that this is pretty impressive!
More Recent Efforts to Capture Consumer Demand: Largely due to the widespread belief that yogurt—including the kind sold in a drinkable format--has "functional claims for immunity," the global pandemic sent probiotic sales into overdrive. For more information, see an article I wrote for Japan Insider in 2021: “Why Do Japanese People Love to Eat Bacteria?”
What to watch: Juice companies have no intention of letting their share of minds (and stomachs) slip any further. They are fighting back with bold product positioning.
Clinical Evidence: The market leaders are promoting the nutritional benefits of vegetable drinks and gathering evidence to support their claims that can be printed on product packaging. Ito En's Nutritional Fortified Vegetables for a Day (栄養強化型1日分の野菜) is one such product. This product not only contains all of the recommended 350g of the daily requirement of vegetables in a single bottle, but is also a food with three functional claims: suppressing the increase of neutral fat and blood sugar levels which are typically experienced after every meal, as well as the ability to lower high blood pressure. This product is an outstanding success story in the company's overall product portfolio of plant-based beverages, which have been suffering from slowly declining sales for years. Like this new entry, sales of food drinks with functional claims grew significantly in the first half of fiscal year 2023, increasing 18.6% year over year.
Sales of Kagome's Vegetable Ichinichi Koreichibon Triple Care (野菜一日これ一本 トリプルケア), which claims the same three functional benefits, have also been strong.
Among the plant-based beverages sold by Kagome, tomato juice is doing particularly well, due to successful efforts to modify the product positioning of this staple. Sales from January through September 2023 were up more than double digits compared to the same period in 2022, thanks in large part to updated marketing claims about the product's ability to "raise good cholesterol" and "lower high blood pressure." The messaging resonates with middle-aged and older consumers, especially those in their 50s, who are looking for ways to prevent metabolic syndrome.
The proactive dissemination of scientific information is also proving to be an effective marketing tactic in data-obsessed Japan. For example, lycopene in tomato juice is known to have powerful antioxidant properties, and it is believed to prevent and reduce skin damage such as redness and pigmentation caused by ultraviolet rays. Japanese women are often obsessed with cosmetics to prevent and hide pigmentation caused by too much sun exposure. Therefore, the new claims about the benefits of drinking tomato juice are particularly effective in boosting sales among women.
The company posts the results of many such studies on its website, promoting the value of its products and the evidence behind them. In recent years, lycopene has attracted the attention of beauty and health-conscious influencers, and the number of buyers in their 20s and 30s has also increased.
Self Monitoring: Kagome has developed a device to measure vegetable intake called "Veggie-Check." It measures the amount of carotenoids accumulated in the skin by placing the palm of one’s hand on a sensor. About 30 seconds later the device displays the estimated vegetable intake for the past two to four weeks on a tablet screen. Results are classified into 12 separate degrees of vegetable intake, making it easy to determine if you're getting enough vegetables. Since its launch in 2019, the service has been installed in the produce departments of supermarkets and retailers that focus on health management, with a total of more than 1,500 rentals and leases as of the end of December 2023, and a cumulative total of more than 6.55 million Veggie-Checks. At some of the retailers where Veggie-Checks were installed, sales of Kagome's vegetable beverages increased 145% week-over-week, and smoothies sales increased 222% week-over-week.
What’s next: Kagome has its sights set on carrots. In the future, the company plans to focus on promoting the value of beta-carotene in carrots, which are known to prevent "hidden spots" that can appear on the surface of the skin.
“It is important to communicate the specific value of the product." - Kagome spokesperson Shinsuke Nishimura
Another effort will be to educate consumers about the importance of vegetable intake. While product improvement is important in restoring demand for plant-based beverages, consumers must be made aware of their desire to consume vegetables.
Link to Japanese Source: https://toyokeizai.net/articles/-/725983
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While the name may give English speakers the false impression that this drink is made with urine, the brand name Calpis is actually a combination of "cal" for calcium and "salpis" which is the Sanskrit word for "superior taste.”
I was always surprised how little fruits and vegetables Japanese eat. However, the situation is changing. You could not imagine seeing as many fruits and veggies salads in convenience shops 20 years ago as you are seeing now.
I stopped buying packed veggie juices in Japan because they are packed with sugar. It is hard to find freshly squeezed veg juices also. But supermarkets now store more vegetables welcoming kale and beets. So, making huge bowl of delicious salad is my way out. It is also hard to find unsweetened yoghurt or other “milky” drink, so I stick to no sugar soy milk.
I find this information quite surprising, firstly, because I thought that, like me, the vast majority of East Asians were lactose intolerant; and, secondly, because our rulers do not want us to consume meat (or, therefore, dairy products). They want us to consume more vegetables, all as part of the C02/man-made climate change scam:
https://winepressnews.com/2024/01/05/who-head-tedros-declares-war-on-meat-and-demands-nations-transition-to-plant-based-diets-at-cop28-aims-to-accomplish-by-2025/