Herbal candy Ryukakusan’s exports accelerate dramatically, only to face the danger of fakes

The exponential growth in tourists to Japan, now over 31 million/y, has been manna from heaven for many, especially drug stores.

In bound tourists spend on average $50/person on Japanese medicines which has resulted in the creation of new markets when visitors return home.

150 year old Ryukakusan, a maker of Rx and OTC products, as well as a popular line of throat candies, has seen its overseas sales jump 6 fold in the last 4 years thanks to distribution tie ups in Hong Kong, Taiwan, Korea and America.

Ryukakusan advert: “Your throat’s body guard”

The Ryukakusan brand has a strong ‘Kampo’ image, medicines made from a concoction of plants. Kampo originated from China and is holistic in ethos. There are over 140 Kampo Rx products in Japan and over 90% of Japanese doctors have at some point prescribed them. Most drug stores devote shelf space to Kampo products in addition to traditional western OTC products.

Ryukakusan’s packaging is premium, distinctive and its handwritten kanji logo make it unmistakably Japanese. According to Japanese drug store trade reports, Ryukakusan has consistently been one of the most popular products purchased by tourists.

Fake on the left, genuine product on the right

However can you tell the difference between these two designs? It’s very hard. Only someone who reads Japanese might notice the middle character on the LHS pack has changed.

Where these fakes have come from has not been stated, though doubtless Ryukakusan have their suspicions.

Safe guarding your brand’s intellectual property is key for long term export success. Looking at the Ryukakusan packs it seems they haven’t paid due diligence to IP protection. I suspect that Ryukakusan have naively assumed that no one would deliberately copy their work.

Now they have their work cut out chasing down fakes, instead of brand building.

The 5 secrets of trademark protection are laid out in Export and Expand.

Marketing chocolate the Aussie way: say G’day to TimTam

Created over 50 years ago, and with domestic sales around US$100m, TimTam biscuits are an Australian icon.

I’ve recently started seeing lots of them here in Japan, especially in Hokkaido, where they’re a hit with hungry skiers and locals alike.

Inspired by the UK’s Penguin brand, TimTam’s creator jazzed up the product creating a wider range of indulgent and chewier fillings, plus came up with a catchier brand name.

It’s not just Japan. TimTam has become popular in Indonesia, where it’s even been on promotion with MacDonalds, a great way to grow brand awareness and penetration, and been launched into the US, along with 40 plus other countries.

What further plans Arnotts/Campbells has for the brand, I’m not privy to, but they may want to think about some high traffic locations like popular department stores and other sites popular with tourists.

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Will Hokkaido’s Kinotoya be Japan’s next export hotcake?

I was in Hokkaido last week (great snowboarding!) and on the way back passed through Shin-Chitose airport.

The airport is one of my favourites for its superb collection of eateries and delicatessens. One of these is the Kinotoya bakery.

Kinotoya is Sapporo born and bred and is famous for its cheese tarts.

Another Hokkaido confectionery success has been Royce who have gone global with shops as far away as the Middle East.

Is it Kinotoya’s turn next? Check out more here

Is Asahi barking at the moon after yet another foreign beer takeover?

Asahi’s purchase of Fuller’s Pride in west London for £250million is the latest in a long line of foreign acquisitions by the Japanese brewer.

Fuller’s Pride in West London

Unlike most Japanese companies who prefer the steady path of organic growth, especially in overseas markets, Asahi has been aggressive in taking over foreign beverage businesses.

Two of the most notable was the $2billion acquisition of Peroni, Grolsch and Meantime and Schweppes Australia. International business now accounts for just over 30% of Asahi group’s revenue, far from insignificant.

However the company’s success internationally has not been a one-way street. Management was left crying in its beer in China, where it ultimately sold its stake in Tsingtao.

Pulling off M&A deals is one feat. Integrating the business, innovating, keeping and enthusing your talent pool are altogether different challenges.

Asahi’s Japanese rival Suntory experienced these challenges following its 2014 purchase of Beam, where many key executives promptly departed.

Fuller’s Pride is not close to Beam in scale, however one wonders whether there is a strategic plan? The small print of the deal reveals that Asahi has not acquired Fuller’s trademarks and will merely license them. So it has paid for a brewery, some prime land in Chiswick and a London distribution network. Fuller’s brand whilst well known in west London has little equity or saliency outside the M25.

Will Fuller’s Pride be promoted in Japan?

Or is Fuller’s just another Asahi head hunting scalp that will be quickly forgotten?

Export and Expand: 8 essential steps to take your business global is available here

Spicy kimchi reaches an all time export high

Exports of Korean Kimchi, one of the country’s famous signature dishes jumped 20% in 2018 to reach sales over US$97million.

Kimchi made from salted and fermented vegetables

It may be a surprise for some but the biggest export market was Japan, where a wide variety of kimchi is available in supermarkets and convenience stores.

The US, Taiwan, Hong Kong and Australia were the other big export customers.

Daesang FNF is one of Korea’s most popular Kimchi producers and its Chongga brand has around 60% share in the domestic market.

Brazil is top dog in Halal meat exports

Perhaps surprisingly, 8 of the world’s top 10 Halal meat exporters are not Muslim countries!

Top of the table is Brazil whose Halal meat exports in 2018 were valued at over US$5 billion.

Brazil has the second largest cattle herd in the world

Australia is number 2 with a business half the size of Brazils, whilst India is number 3.

The market for Halal certified food, beverages and other categories, for example cosmetics, continues to grow, not just in Muslim countries, but also in western markets where there are sizeable Muslim populations.

Health food start-up Huel heads East

Founded in 2014, Huel markets high nutrition, plant based foods to fitness minded Millenials, mainly in London.

Sales in 2019 are set to hit £40million.

Huel uses a direct-to-consumer business model, one which has been generally more popular with cosmetics, toiletry and supplement businesses, rather than food companies.

Late in 2018 Huel signed a deal with JD.com to enter the China market. I was surprised that they prioritised China over other Western markets, like Australia, where there are similar groups of consumers to the UK.

I like the Huel concept, though admit I’ve not been able to try it here in Japan.

Huel’s challenge internationally will be IP protection, as the idea is quite easy to copy. It will not be difficult for a good food nutritionist to replicate their formulas.

Huel’s core consumer target, fitness minded Millenials

Huel has just taken additional funding from investor Highland Europe.

I’m sure their game plan is to sell it to a big food or Pharma company, like Dollar Shave, the Direct-to-consumer start-up, was bought by Unilever.

Do you want to expand internationally? Let’s talk!