Osaka-headquartered Rohto Pharmaceutical announced its outlook and initiatives for the TCM brand during its financial results presentation for Q1 FY26 on August 6.
During the quarter, Rohto’s internal medicine / food portfolio in which Eu Yan Sang is a part of, saw an increase of 150.7% in sales to 15.9bn yen (US$107.6m).
The bulk of sales came from Asia — with 9.7bn yen (US$65.9m) coming from this region, boosting year-on-year sales growth by 4,420%.
The domestic Japanese market saw sales increased by 0.2% to 6bn yen (US$40.7m) for its internal medicine/food business.
According to the company, the boost in internal medicine/ food sales largely came from the acquisition of the Singapore-headquartered Eu Yan Sang — which occurred last April. The brand’s bestsellers include edible bottled bird’s nest and Bak Foong Pill for regulating menstrual ailments, with products like collagen and NMN in its range as well.
“In the internal medicines and food business, there was a significant increase in sales, partly due to the inclusion of Eu Yan Sang’s sales in the consolidated results,” said Masaya Saito, vice president and CFO at Rohto Pharmaceutical during the results presentation.
Although the TCM brand had contributed to Rohto’s overall sales, the brand’s sales saw a “high single-digit” decline — which was falling behind plans set for the brand.
Saito said that the decline was in part due to slowdown in Singapore and Hong Kong — which are the core markets of the brand.
“Eu Yan Sang, which started being included in the consolidated profit and loss from the second half of last year, is progressing below plan due to a slowdown in the Hong Kong and Singapore markets, which account for about two-thirds of its sales,” said Saito.
Expansion to Australia, Japan
As part of growing the Eu Yan Sang business, Rohto outlined five key initiatives for the business.
One of them is to expand the market footprint of Eu Yan Sang.
For instance, it has started selling bottled bird’s best at Costco Australia and plans to begin pilot sales in Japan via domestic e-commerce platforms in the second half of this year.
The brand is also showcased at the Singapore Pavilion of the Osaka Expo.
“We plan to start pilot sales in Japan within this fiscal year, and sales have already begun at Costco in Australia. We are also considering expansion into the United States and Southeast Asia, including Vietnam,” said Saito.
In fact, the Eu Yan Sang brand is not completely new to the American market.
In a previous interview with NutraIngredients, Dominic Wong, Group CEO of Eu Yan Sang International said that the brand’s products were sold in online marketplaces like Amazon, Weee!, and Yami, with offline presence in herbal stores and Chinese medical halls.
The expansion into the US, he said back then, was not only to serve the Chinese diaspora nor compete only in the TCM sector, but to cater to the wider health and wellness market.
Elsewhere within South East Asia, the brand also has a strong presence in Malaysia.
The brand also has a partnership selling US supplement brand Thorne’s products on its Singapore e-commerce website back in 2023.
The four other initiatives
Rohto has also outlined four other initiatives for Eu Yan Sang’s business, such as introducing new products to both the domestic and overseas markets through joint research between Rohto and the subsidiary.
It also plans to increase intra-group procurement ratio to lower the cost of sales, which it said has started to reap results.
Another way is to increase sales by reviewing and focusing on the main SKUs, and carrying out joint promotions with the lip balm brand Mentholatum.
Fourth, it plans to reduce fixed costs and improve profit margins by streamlining group headquarters functions and reducing rent — which is a large portion of fixed costs.
TCM and gut microbiome research
On the other hand, Rohto has been working with microbiome analysis firm Metagen Co. Ltd in finding out the relationship between naturally derived ingredients and the intestinal environment via in vitro testing.
The ingredients studied are from Eu Yan Sang’s products, such as cordyceps (Hirsutella Sinensis) capsules, Lingzhi Craked Spores Powder Capsules Plus, Royal Golden Bird’s Nest, Pure American Ginseng Capsule, Uric Care, Flex 360 Bone and Joint Supplement, Sleep Formula, and Lok Mei Pa pills.
In the study, the effects of these ingredients on intestinal flora and intestinal metabolites were analyzed using human stool samples.
Findings showed that multiple natural ingredients, including cordyceps and American ginseng, have been found to promote the production of short-chain fatty acids (SCFAs).
The production of SCFA is important as they play a role in strengthening the intestinal barrier function, regulating immune function, and improving obesity and glucose metabolism.
Based on the findings, the product Lok Mei Pa has been found to show high butyric acid production - which plays a role in immune function support.
“When we examined the production of the major short-chain fatty acids in the human intestine—acetic acid, propionic acid, and butyric acid—we found different trends for each ingredient.
“Among the short-chain fatty acids, butyric acid not only serves as an energy source for the intestinal tract, but is also known to be involved in immune cell function and strengthening the intestinal barrier function.
“The sample containing Lok Mei Pa Pills (LMP) showed particularly high butyric acid production, which suggests that the product may be useful for enhancing immune function and improving the intestinal environment,” said the company.
Also, the effects of natural ingredients may be affected individual differences in the intestinal environment, but the results obtained could be applicable to a wide group of population.
“The intestinal microbiota is influenced by factors such as diet and lifestyle, and therefore varies greatly from person to person, with responses also being known to differ depending on food ingredients, etc.
“The stool samples used in this study corresponded to all three enterotypes: Bacteroides, Prevotella, and Ruminococcus, allowing for an evaluation of the intestinal environment representative of a wide range of people.
“Therefore, the results obtained are highly versatile and are expected to have a wide range of applications, not just for people with specific intestinal environments,” said the company.