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!

Lulu Lemon strides ahead

LuluLemon’s share price rose significantly in 2018, despite the Q4 global stock market rout, as the brand expanded into new markets, attracted new users and nailed down plans to enter men’s apparel.

Its most recent international expansion has been a new store in Macau which opened this month. Lululemon only entered the China market in 2016.

Lululemon has an international sales target of US$1 billion by 2020, 25% of total revenues.

Sake exports soar in 2018

Exports of Japanese sake soared in 2018 to over US$200 million, a record.

Hong Kong and mainland China was the biggest growth story with sales up 47%.

With better marketing, easier to read packaging based on consumer led insights, the Japanese sake companies can easily quadruple this number.

The arrival…

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“America’s role in the global economy was invariably going to diminish; we’re smaller as China & India and other emerging markets grow “ — Joseph Stiglitz