Portfolio revision: Kao transfers functional beverage brand to Kirin to focus on ‘core businesses’

By Hui Ling Dang

- Last updated on GMT

Kao has entered into an agreement with Kirin for the transfer of functional beverage brand Healthya. ©Kao
Kao has entered into an agreement with Kirin for the transfer of functional beverage brand Healthya. ©Kao

Related tags kao Kirin functional beverage

Kao Corporation has entered into an agreement with Kirin Beverage Company Limited for the transfer of Healthya, a functional tea-catechin beverage brand, to focus its resources on other business areas to achieve its targets for FY2027.

Based on years of metabolic research on body fat and visceral fat, Healthya debuted in 2003 as the first tea brand with function claims, specifically body fat reduction, that was approved as a Food for Specified Health Uses (FOSHU) in Japan.

According to Kao, the brand’s total cumulative sales from May 2003 to December 2023 is approximately 3.1bn units.

“Kao is accelerating structural reforms to strengthen the competitiveness of our core businesses to achieve the goals of our Mid-term Plan 2027 (K27). As part of the efforts to review and optimise our business portfolio, we have decided to transfer the Healthya brand.

“We have selected Kirin Group, a leading beverage manufacturer excelling in immunology research, as the best partner to further develop the brand,” ​Rika Takamizawa, Vice President of Strategic Corporate Public Relations at Kao Corporation, told NutraIngredients-Asia​.

The two Japanese majors had launched a dual-function supplement called Kirin iMUSE Immune Care and Healthya Visceral Fat Down​ last November, on the back of joint research.

At the time, Kirin said that the firm has been actively expanding its line-up of functional products with immunity claims, and that obesity and immunity are important and familiar concerns for Japanese people that need to be addressed simultaneously and easily.

The transfer comprising a total of five sub-brands under Healthya is expected to conclude by August 1.

These are namely Healthya Green Tea, Healthya Green Tea Umami Taste, Healthya Water (sports beverage), Healthya my rhythm Sparkling (carbonated beverage), and Healthya Tea Catechin Green Tea Taste (powder drink).

Following this, Kao will be channelling its resources to businesses with “stable earnings”, including fabric care, home care and personal care, as well as “growth driver areas” like cosmetics, chemicals and life care.

The [capital] efficiency of our Life Care business will greatly improve with the transfer of the Healthya brand. We aim to grow [this field] by expanding the hygiene business and building new businesses through co-creation with partners,” ​Takamizawa added.

Striding towards K27

Kao’s Mid-Term Plan 2025 was reviewed and announced as the new K27 in August 2023, which is formulated based on its “Global Sharp Top Strategy” to sustain quality businesses that have strong global performance, transform to build robust business through investment, and maximise the power and potential of human capital.

In FY2024, the Group will further tighten the withdrawal, sale or handling of businesses, brands and assets, and advance business portfolio management to achieve the goals of K27.

For the cosmetics category, Kao is looking to bring UV care products outside Japan to markets in Europe, Australia, Brazil and the ASEAN region, introduce “high value-added sheet-type products” to the global audience, and revitalise its hair care business through the launch of next-generation premium products.

In addition, the company will strive to increase investment efficiency through various strategies, including collaboration between different businesses — for instance, skin care and protection with insect repellent and eradication technology that does not use insecticides.

At the same time, it is working to improve return on invested capital (ROIC) in process industries, such as new product development in the sanitary business.

Its ROIC in FY2023 was 4.1% and is forecasted to reach 8.6% in FY2024, with a target of 11% or more for FY2027.

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