The Japanese Yakult drink, which contains Shirota lactic acid bacteria that reach the intestine alive, is successfully sold in German supermarkets, and about 90 percent of Germans have heard of it. In this J-BIG interview, we talked to Mr. Tatsuya Hirano, the Managing Director of Yakult Germany, about the interesting origin of the Yakult name, the company’s strategy since it entered the German market 25 years ago and encounters with competitors as well as the European Food Safety Authority.
J-BIG: First of all, what is the origin of Yakult?
Tatsuya Hirano: Yakult was first sold in 1935 by Dr. Minoru Shirota, the founder of our company. Dr. Shirota was born in 1899, and in the early 20th century, nutrition and sanitation were still not great in Japan. Many people, including children, were dying due to intestinal infections such as cholera and dysentery. Heartbroken by this reality, Dr. Shirota went on to study medicine with the hope of saving lives. He focused his research on “preventive medicine,” which aims to stop people from getting sick in the first place, rather than treating them after they become ill. In the process, he discovered a lactic acid bacterium that suppresses bad bacteria in the intestines, which he later named “L. casei Shirota”. He was also the first in the world to succeed in strengthening and cultivating this bacterium. In 1935, he launched “Yakult,” a drink that takes advantage of the important function lactic acid bacteria play in the intestines. This is the origin of our company. The price for the drink was set as low as possible so that as many people as possible could drink it every day. Yakult had a strong desire to provide health at a price that everyone could afford. This mentality is why Yakult is still in existence today.
The name of the company comes from the Esperanto word “Jahurto,” which means yogurt. The language Esperanto was created more than 130 years ago with the goal of establishing a universal language. The decision to choose such a global name was a very conscious one: The company was hoping that Yakult would be drunk not only by the Japanese but by people all over the world.
Currently, our foreign business is centered around lactobacillus beverages, but in Japan we are developing various products that promote health and a healthy lifestyle, including lactobacillus beverages, vegetable juices, soy milk, noodles and other food products, cosmetics that protect the health of the skin, and medical products that contribute to cancer treatment.
J-BIG: When did you start your business in Germany?
Tatsuya Hirano: Our German branch was established in 1996 in Neuss, a town near Cologne and Duesseldorf, in the state of NRW. Our goal as a company is to educate as many people as possible about the importance of the gut and gut microbiota to health. So from the early days of the company to the present, we have prioritized face-to-face communication to thoroughly explain about Yakult. This corporate culture also led us to focus our early sales activities exclusively on NRW and to gradually widen our scope over time. After Yakult became available in supermarkets all over Germany, we also started advertising on TV and on radio etc. At present, Yakult has a high level of awareness of between 80 and 90 percent in Germany, but a lot of people are not aware of its specific characteristics and how it differs from competing products, yet. Yakult is sometimes confused with Actimel from our competitor Danone, so we need to further emphasize the uniqueness of Yakult.
Today, Yakult’s sales ratio in NRW is higher than the population ratio of other states: NRW is home to about 20 percent of Germany’s total population, but accounts for 25 percent of Yakult sales in the country. I think this is because the people who started to buy from us 25 years ago are now passing it on to the next generation. Compared to European companies, Japanese companies generally do business in a step-by-step, steady manner. We need to obtain budget by presenting successful examples of small projects. We developed the German market in a spirit of trial and error, always making sure to learn from our previous mistakes before we take the next step. Even if Yakult would be in the red for a few years, it is unlikely that we will withdraw. Our stance is that once we enter a market, we will work hard until we succeed.
Yakult’s idea is to make sure that people continue to drink the product every day, rather than buying it during promotions, so basically, we don’t have it in Aldi, Lidl, etc., which are called hard discounters in Germany, but rather in supermarkets such as Edeka, Real, Rewe, Kaufland and others. In this segment, we are represented in over 90 percent of the individual supermarkets. Recently, our sales in Munich and Berlin have also been increasing. Berlin is a very cosmopolitan city, and I have the impression that many people are open-minded. Also, people who used to drink Yakult in other countries continue to drink it here and recommend it to their friends and family, so the market is expanding.
J-BIG: What were your biggest challenges for doing business in Germany?
Tatsuya Hirano: There are strict regulations in Europe regarding nutrition and health claims on food products. It has been 27 years since we entered Europe, but currently none of our category products, including Yakult, have been certified for health claims by the European Food Safety Authority (EFSA) – even though they are certified in many other countries, including Japan. Basically, there is a perception that health-related products are drugs, not foods. Yakult is a food product but it seems to be a category between food and medicine, and it is difficult to get people to understand this in a culture that often sees things in black and white. Because of this, we are not able to fully promote the health benefits of Yakult products in Europe, and I think that it will be a challenge for us in the future how to communicate the results of our more than 85 years of research on lactic acid bacteria.
German audiences also place a lot of value on food quality regulations and certifications. The “Bio” label, for example, which certifies that a product is natural or organically grown, is becoming increasingly important for German consumers, and the popularity of such products is growing significantly compared to other countries. Germany also has strict rules in various fields with a long history, such as the “Reinheitsgebot” for beer production, which limits the ingredients of beer to only malt, hops, water, and yeast. I respect German culture, but I think there are inevitably barriers due to these differences in the rules of each country.
“J-BIG – Japan Business in Germany” is the e-mail magazine dedicated to Japanese companies and their business activities in the German market.
J-BIG: How are you setting yourself apart from competitors that offer similar health drinks?
Tatsuya Hirano: When we opened our first European office in the Netherlands in 1994, there weren’t many European manufacturer selling this type of drinks with lactic acid bacteria – we were the pioneers in this field. The market has expanded as competing products have entered the market. Currently, our market share in Germany is less than 10 percent, far behind our competitors. In this environment, Yakult is making the most of its strengths – our special lactobacillus shirota strains, our history of more than 85 years, and our global experience in more than 40 countries – and making clear what differentiates our product and our company. We aim to make Yakult a part of people’s daily lives by encouraging the habit of daily drinking. The small Yakult bottle has a big mission. As a pioneer in lactobacillus research, we would like to continue to contribute to the creation of healthy and enjoyable lives.
J-BIG: Please tell us about the products you are selling in Germany.
Tatsuya Hirano: Currently, we have three types of products in Germany. The first one is the red Yakult Original, the most famous product. This product accounts for 70 percent of our total sales, and it is sold in 40 counties and regions in the world. The second is the green Yakult Plus. It is low in calories, low in sugar and contains vitamin C and fiber. It was developed for a different taste, a taste preferred by Europeans. The third one is the blue Yakult Light. It has less calories, but additional vitamin D and vitamin E. Of the wide range of products in Japan, the one that I would be happy to see in Germany is “Yakult 1000”. Each 100-milliliter bottle contains more than 100 billion Shirota lactic acid bacteria, which are alive and reach the intestines. They help with relieving stress, especially in situations of temporary mental stress, and improve the quality of sleep – the bacteria promote deep sleep and leave you waking up refreshed.
J-BIG: What have you been focusing on the most since you yourself have been stationed in Germany?
Tatsuya Hirano: I came to Germany in May 2014, so I have already been stationed here for seven years. Our company is based on the principle of “localism” so that we can correctly understand the characteristics of each region and conduct business that is rooted in that region. This is one of the reasons why we often have a longer expatriation period than most Japanese companies.
I have always believed that the most important thing is for employees to have confidence and pride in the fact that they are working for Yakult. Without pride and confidence, it is impossible to communicate well with consumers. Currently, we have 15 employees in Germany, including myself. The past seven years have not been easy, and there have been many difficulties. Although our team is very small, we are a group of employees with various functions, such as Marketing, Sales, PR, Science, Administration, and it is not uncommon for our discussions to become heated. For example, Yakult places great importance on evidence and has a large research facility in Japan, where the company’s headquarters is located, that conducts research centered on lactic acid bacteria and life science, the Yakult Central Institute. This attitude of steadily accumulating evidence and continuous learning is also one of our company’s principles. Science and PR activities are an investment in the future, even if it does not directly lead to immediate sales, but there are often differences of opinion with the Sales department.
In this situation, I play the role of a “surfactant” that mixes water with oil, aiming for a win-win situation for each of us. Our PR Officer, who has roots in Germany and Japan and understands both cultures, also supports me in explaining the management philosophy of the Japanese headquarters to the local employees in an easy-to-understand manner. Each and every one of us needs to think about why we are delivering Yakult in Germany, how we can communicate the themes of health and happiness to Germans, and what our goals are. My own goal is to make sure that everyone understands Yakult’s wonderful Japanese philosophy and the ideas of our founder, Dr. Shirota, and puts them into action. Currently, we have a very strong team.
We also work very closely with the Japan headquarters and the European operating companies. We have to act quickly in consultation with the head office on important matters related to our products and new initiatives, but the head office listens to what we have to say in the field. For example, Dusseldorf and Paris are about 500 kilometers apart, similar to the distance between Tokyo and Osaka, but the cultures are completely different. For this reason, there are meetings in Europe where the Managing Directors from each country gather four times a year to discuss various matters, and there is also a global MD meeting in Japan every two years.
J-BIG: What kind of approach do you take towards stakeholders outside the company?
Tatsuya Hirano: We try to communicate in a way that helps people understand and trust Yakult products. There is a saying in Germany, “Was der Bauer nicht kennt, frisst er nicht.” (Farmers don’t eat what they don’t know), and I certainly had the impression that it was difficult for Germans to pick up products they had never seen before. In particular, elderly people who have been using a single product for 30 or 40 years are not likely to try out a new one. I like the German culture very much, but I still had a hard time with this custom. On the other hand, there is of course a good side to this, as once a German becomes a fan of Yakult, they remain loyal for a long time.
Therefore, the first thing we originally did was a large amount of direct sampling. At the time, there were another Japanese employee besides me, but we were both unfamiliar with the German language. We actively called out to passersby, saying things like, “Probieren Sie Yakult!”, and this kind of persistent communication is very important. Communicating directly to consumers is an something that we have been doing for many years around the world, and it is a fundamental acitivity of Yakult as a whole. The fact that we started in Japan, our pursuit of life science, and our unique communication method are the three elements that make us unique, and we are working hard every day to find ways to communicate them to Germans. In Europe, there is a saying, “An apple a day keeps the doctor away,” so I believe that our goal of preventive medicine and the principle of Kencho Choju (a strong gut is the key to a long and healthy life) will also attract the attention of Germans and gain their trust.
J-BIG: Speaking of unique communication methods, you also have the “Yakult Lady” initiative, don’t you?
Tatsuya Hirano: That’s right. The Yakult Lady is a staff member who delivers Yakult products. Many of our customers were housewives, so we started this program in 1963 to make our customers more familiar with us by having someone in the same situation visit them.
The Yakult Group has about 41,000 employees globally, and in addition to that, about 80,000 Yakult Ladies are active.
In Japan, Yakult Ladies deliver products to elderly people who live alone, while checking on their safety and talking with them.
Unfortunately, there are no Yakult Ladies in Germany, so we have not been able to carry out these so-called “Courtesy Visits” . However, in order to carry out this philosophy in Germany, since February 2020, we have been supporting the “Herzwerk”, a local initiative in Dusseldorf that cares for people affected by old-age poverty. We provide Yakult and support with healthy breakfasts.
The products sold in European supermarkets are produced at the Almere plant in the Netherlands. In general, many companies measure their business by sales, but we try to count the number of bottles drunk per day, we are looking at 40 million bottles worldwide.
J-BIG: Finally, what is your vision for Yakult’s future in Germany?
Tatsuya Hirano: I still want as many people as possible to drink Yakult. Since 70 percent of immune cells are located in the intestines, I want the Germans to know that taking good care of the intestines is also connected to our preventive medicine story. As a result, it is our ideal and sincere hope that Yakult will become a part of the daily lives of many. Germans are often very diligent about keeping shopping lists. Our current goal is to make Yakult an indispensable product for healthy living. I’d be happy if we got to the point where people put it on their standard shopping lists, so they never forget to buy it.