Yakult, the probiotic yoghurt drink famed the world over, has just launched into the mainstream US market for the first time. In this month’s just-food interview, Dean Best caught up with Hisashi Satoi, vice president for sales and marketing at Yakult USA, to find out how the Japanese brand is trying to win over consumers sceptical about the benefits of bacteria.
Yakult, the drinkable yoghurt famed for harnessing millions of good bacteria to boost health, has embarked on trying to tap into a culture of a very different kind – the US.
Yakult, which was developed in Japan in the 1930s, is renowned around the world for the benefits it brings to gut health. Almost 80 years since Japanese scientist Minoru Shirota first discovered the bacteria used in Yakult, the brand has become a leading player in probiotics. The company set up by Dr Shirota in the 1950s to handle the product, Yakult Honsha Co., claims 25m people in 27 countries drink Yakult each day.
But, while Yakult was making waves around the world, the product remained on the fringes of the US market. It has been sold in selected Asian markets in the US since 1999. Two years ago, Yakult looked to take advantage of its popularity in Mexico with a roll-out to selected Hispanic markets on the West Coast of the US. The average US consumer, meanwhile, remained blissfully unaware of probiotics. Scientific approval and recognition in Japan and Europe had provided the foundation on which probiotic products in those markets could grow. In the US, the scientific community had been initially reluctant to embrace the idea.
However, that resistance is slowly being broken and the US is becoming a more fertile ground for probiotics. This year, the likes of Danone and General Mills have launched probiotic products and now Yakult is being rolled out into the US mainstream for the first time.
Leading Yakult’s charge is Hisashi Satoi, vice president for sales and marketing at Yakult USA. Satoi joined Yakult in 2001 and moved to its US office a year later. He admits winning over sceptical US consumers will be a challenge but insists the category has potential.
“The category is brand new, there is no category yet. Yakult may be a major brand, a strong brand internationally but in the US, people just don’t know about us yet,” Satoi tells just-food from Yakult’s US base in California. “American people haven’t known about probiotics; they’ve tended to associate them with bad bacteria. But many people here have an unhealthy diet, eating a lot of fast food, and having a lack of exercise, so we believe there are lots of possibilities and a lot of potential for probiotics to grow in the market. We need to educate and we need to make people aware of basic healthy living.”
Hisashi Satoi, vice president for sales and marketing at Yakult USA
Industry watchers concur with Satoi’s upbeat outlook for probiotics in the US. Sales of functional dairy drinks across Western Europe, the US and Japan are projected to reach over EUR6bn (US$8.9bn) by 2011, according to analysts Zenith International. Last year, sales stood at EUR3.4bn. While Europe and Japan remain the two big markets for probiotics, the US will see the fastest growth; Zenith says the US is experiencing year-on-year growth of around 50%, albeit from a low base.
“Probiotics are just starting and companies like Danone and Yoplait [General Mills holds the US licence to the Yoplait brand] are just starting but the market is growing, really growing and that’s very good for all of us,” Satoi says.
Yakult has embarked on a piecemeal mainstream launch with southern California its first market. The company imports the product up from Mexico, where it has a manufacturing base and has been present for 26 years. Yakult is hoping the large Hispanic population in southern California can help drive the brand in its new mainstream accounts, like local retailer Ralph’s, and is on the ground meeting consumers and holding product demonstrations in-store.
Hands-on contact with consumers has been part of Yakult’s strategy since the 1960s when the company created its team of Yakult Ladies to sell direct to its customers throughout Japan. The company has decided to export that idea to the US.
“We do demonstrations in stores like Ralph’s from 11 in the morning to seven in the evening. We have Yakult Ladies standing in front of Yakult shelves, consumers pass by, and we explain why Yakult is good for you and why it benefits you. So we give an education and explain the health benefits,” Satoi says.
Naturally, the product’s packaging seems to confuse US consumers. “Small bottled beverages are not popular here,” laughs Satoi. “Yakult is in a really tiny bottle and we have had to explain to consumers why the bottle is so tiny but that it still contains 8bn beneficial bacteria.”
The company has used the usual marketing channels – print and TV – but for Satoi meeting and educating consumers will be vital to any success the brand enjoys. “We need to keep educating people and keep explaining the health benefits,” he says.
And, for now, Yakult is wisely focusing on getting the brand known in one market before setting its sights elsewhere in the US. “We’re still focusing on southern California and greater L.A. It’s a big, big market. We will then look to northern California, places like Sacramento and Fresno.”
The US, for all its potential, remains just a budding market for probiotics. Yakult will have to be just as meticulous at developing its brand there as Dr. Shirota was in a Japanese laboratory 80 years ago.