Net sales for the Japanese dairy giant was down 16.1 per cent to JPY$235.9bn (US$2.2bn), while operating profit declined 19.6 per cent to JPY$18.6bn (US$170m), the Japan-based dairy giant said in its FY2022 Q1 report for the month of April to June 2021.
The company, which also runs a pharmaceutical business, said its food business had suffered declines in sales and profits.
Net sales for its food business shrunk 18.2 per cent to JPY$199.8bn (US$1.8bn) and operating profit was down 17.5 per cent to JPY$19.4bn (US$177m).
The decrease in functional yogurt sales had “seriously impacted” operating profit, however, other food products, such as sports nutrition, functional chocolates, and medical foods reported growth, the firm said.
Net sales of functional yogurt dropped 16.8 per cent to JPY$25.3bn (US$231m) compared to the same period last year, while that of non-functional yogurt dropped 5.9 per cent to JPY$21.2 bn (US$193m).
“Sales from yogurt and cheese business decreased significantly yoy due to the levelling off of extraordinary demand during the previous fiscal year caused by the COVID-19 pandemic,” the company said.
Meiji’s functional yogurt products contain Lactobacillus. An example is Meiji Probio Yogurt PA-3, a Foods with Function Claims (FFC) that contains Lactobacillus gasseri PA-3 and claims to suppress rising uric acid levels.
Sports nutrition, chocolates, gummies boom
On the other hand, the firm’s sports nutrition products, especially its SAVAS range, have reported good growth.
SAVAS is a whey-based sports supplement and the firm also has another sports nutrition brand known as VAAM, which consists of amino acid products.
The company said that sales of its sports nutrition products was up 30.9 per cent to JPY$11.7bn (US$106m), due to a growing consciousness for exercise and also an expanding customer base.
On the other hand, net sales of chocolates and gummies climbed 4.2 per cent to JPY$25bn (US$228m) and operating profit was up 33.2 per cent to JPY$2.1bn (US$19m).
A breakdown shows that the sales of chocolates increased 2.8 per cent to JPY$19.8bn (US$181m).
“Sales of chocolate-covered nuts was favourable, particularly for large-volume packages, while sales of chocolate bar had decreased.
“Gummy products increased significantly yoy after struggling in the previous fiscal year due to decreased demand during rush hour and amongst office workers.”
The company earlier said that it has been expanding its line-up of high cocoa-content chocolates. An example of such products is Chocolate Kouka Cocoa 86%.
A study it funded also found that the consumption of cacao polyphenol-rich chocolate could reduce post-meal glucose spike.
Decline in infant formula
Both infant formula and drinking milk reported a reduction in sales.
The net sales of drinking milk was down 8.7 per cent yoy to JPY$21.7bn (US$198m) – again a result of exceptionally strong demand from last year.
The overall sales of formula products also decreased by 1.1 per cent to JPY$14.6bn (US$133m), although the impact was cushioned by growth in the sales of enteral formula for home and hospital use. Enteral formulas include oral diet, liquid supplements, and tube feeding formulas.
One of the bestsellers from this portfolio was the liquid version of Meiji Mei Balance, which was said to have delivered “favourable” results. Other formats include yogurt and jelly.
The company also manufactures beauty supplements under the brand Meiji Amino Collagen.
Meiji said that consumer expenditures on food products have not yet returned to the level seen in FY2019 and that there was only weak recovery seen between April and June this year.
It believes that it should focus on value creation for the long haul, in which health and nutrition are key.
The company is also developing an inactivated vaccine for curbing the spread of COVID-19 and is preparing for a phase III trial. The vaccine production is expected to start in Spring next year.