However, sales of functional yogurt continued to decline yoy, largely due to market competition.
According to the firm’s latest financial results, while net sales had increased yoy, operating profit had declined mainly due to high raw material costs and marketing expenses.
Across all product categories, net sales were up 11.2 per cent yoy to JPY$247.1bn (US$1.86bn), driven by growth in the firm’s nutrition business, B2B business, chocolate and gummy business.
Operating profit was down 3.1 per cent to JPY$18 bn (US$135m), while profit attributable to owners was up 28.2 per cent yoy to JPY$16bn (US$120m).
For its nutrition business, which consists of sports, infant, and enteral nutrition, net sales were up 5.8 per cent to JPY$28.9bn (US$216m). Operating profit was down 14.4 per cent to JPY$4.1Bbn (US$30.8m).
In particular, sales of its sports nutrition brand SAVAS had increased 0.6 per cent to JPY$11.8 billion (US$88.6m), with favourable sales from RTD products.
“Sales of the SAVAS series remained largely unchanged, even though the firm had raised prices and reduced product volume. Sales of the ready-to-drink products were favourable,” the company said.
This is against the backdrop of a shrinking sports protein powder and granules market – which had shrunk four to five per cent, said the firm.
On the other hand, the sales of infant formula and enteral formula had increased 11.7 per cent to JPY$16.3 billion (US$122m).
“Sales of liquid diet Meiji Mei Balance and infant formula, in which the firm had caught some inbound demand, were favourable,” the firm said.
Meiji Mei Balance is a drink designed for older adults and individuals with a low appetite.
Functional yogurt sales declined
As compared to the nutrition category, sales from yogurt and functional yogurt had decreased by 2.4 per cent.
In particular, the sales of functional yogurt had decreased 9.8 per cent YoY to JPY$22.8bn (US$171m).
“For functional yogurt and yogurt, we expanded our product line and strengthened marketing activities, but sales decreased due to the impact of various competitor products appealing health value,” the company said.
Some products, such as LG21 yogurt and Probio Yogurt R-1 had declined yoy, with the exception of the newly launched Mitasukarada series that was out in April.
The company has been reporting a decline in functional yogurt sales in recent months. While sales of its core customers remained stable, it was struggling to attract new customers, it said.
On August 30, Meiji will be releasing its first labelless yogurt drink bottled products under the Meiji Probio Yogurt R-1 brand.
Doing so will help reduce the use of plastic and expand the use of environmentally friendly materials.
“Adopting labelless bottles is expected to reduce the amount of plastic used per bottle by approximately 8.5 per cent, contributing to a reduction in environmental impact,” the firm said.
The labelless bottles will be sold in boxes of six.