Yakult

Company Visit 2

Company Name : Hong Kong Yakult Co., Ltd.

Company Address :  4 Dai Li Street Tai Po Industrial Estate Tai Po, New Territories, Hong Kong

Date of Visit : 06 March 2015

Schedule

1. Visiting the production line

2. Presentation of company information and Tasting
3. Video showing
4. Q&A session

Company Background

Yakult Honsha Co., Ltd is established by ​​Dr. Minoru Shirota in 1930. In 1935, he finished its research and sold the first Yakult. Yakult is a probiotic product. It is a mixture of milk, sugar, dextrose and bacterium Lactobacillus casei Shirota. Nowadays Yakult have sold in many countries such as Brazil, Taiwan and Hong Kong. Hong Kong Yakult Company Limited is established in 1969. It is very successful in Hong Kong. It can buy in many places no matter in supermarket or small store. Every people remembers their slogan “Have you drink it today?”.

Yakult’s Product in Hong Kong:

There are three products sold in Hong Kong. They are Yakult, Yakult (Low Sugar) and Bansoreicha.

The Production Line of Yakult

The Yakult’s staff has show us the production line. First, he told us the bacteria is straightly come from Japan. They show that Yakult will use a fertilization tank to produce more bacteria. After that, we saw few boards showing the history of Yakult. This lets us to understand the evolution of the container and some detail about the founder of Yakult. We have seen the production steps. It includes molding room, processing room and the filling room. It has three production lines in the processing room. During the visit, we have seen many pictures of their advertisements and some of their products.

Presentation

Yakult's staff give a presentation that about the birth of Yakult. In 1930s, Japanese has to face difference intestines diseases and hard to prevent it. Dr. Minors Shirota recognised this problem and start investigate the solution. By using 5 years, he successfully produced the first Yakult, which contains live lactobacillus to help us maintain healthy intestines and prevent those diseases. Besides this, the staff told us some of their supply chain system. They show the process of how their products deliver from the factory to the customers. They have give us one Yakult to try. It seems only little different from those bought in supermarket. Because it just produce one to two days which is fresher than the one bought in supermarket.

Video Showing

After the presentation of the birth of Yakult, we have seen a video talking about the harmful of Escherichia Coli in our body and the difference of our intestines between drinking Yakult everyday and did not drinking it.

Escherichia Coli is a bacteria that will make our small intestines cannot function well and cause us diarrhea. The video shows that if we drink Yakult everyday, the live lactobacillus in Yakult will kill all the Escherichia Coli in our small intestines and maintain our digestive system function well. That’s why we always see their advertisement promote us to drink a Yakult. This is healthy for us to consume it.

Q&A Section

1. How can Yakult deal with the increasing demand in China?

For making sure the quality, the products, which are produced in Hong Kong, would be only provide to Hong Kong and Macau. To develop the market in China, Yakult set up its first branch in Mainland in 2001. It located in GuangZhou. In 2002, the first factory in Mainland was built in GuangZhou. As the demand in the Mainland has increased yearly, Yakult has built continuously. Nowadays, there are 6 factories in Mainland. They are located in GuangZhou, ShangHai and TianJin. They cope with the demand of the market in Mainland. However, the demand is still increasing. Yakult plans to build more factory in Mainland.

2. As your company advocates customer to drink one bottle of Yakult per day, do you think this hinders the sales of products? Are there any methods to improve the daily intake under health consideration?

For problem of improving the daily intake, since the claimed 10 billion probiotics per day is already enough for a human. It will be only a waste of probiotics for in-taking more than enough. For the sale of products, although the catching phrase may hinder the sales amount, there may still have some unpredictable events that affect the demand of the product. Thus, they still need to use past data to forecast their sales.  

3. How can Yakult maintain the profit by your current product line? Will Yakult develop more different ways to yield more profits (e.g. more flavor)?

The setting up of Yakult is aimed to use low cost to bring health to public prior than earning profit. Thus, their development direction is not yielding more profit. Also, Hong Kong’s production line is small, the production capacity is already saturated for fulfilling the demand of Macau and Hong Kong itself. So they may not consider of producing more flavor in coming future.

The way to maintain their current sales is to maintaining the product quality. Their salesmen keep on checking the store environment and tracking any expired inventories in the store as to ensure customer can have the best product.

4. Will you consider providing other sizes (volume) of Yakult?

No, the size of Yakult in Hong Kong is 100ml and will remain unchange. A person only needs 10 billion probiotics per day to help strengthen our immune system and prevent harmful bacteria reproduce in our body. In Hong Kong, the size of Yakult - 100ml already includes 10 billion live lactobacillus and it is one of the probiotics. Therefore, Yakult size will not be changed and always suggest people to drink it once everyday.

5. What have you done in the supply chain management to handle this kind of perishable products?

Yakult has its supply chain to handle the perishable products. First, Yakult manufacture the product in the Tai Po factory. It includes many steps to produce a Yakult. For example, sterilisation,  filling, capping and sealing. In the product, it has suitable amount of sugar and dextrose in order to keep the lactic acid bacte alive. After producing, it will move to storage. Since the operating hours is 0830 to 1730, all the products will store in a refrigeration room for one to two days. Then, Yakult use its three 16 refrigerated tons trucks to deliver to two offices, Fo Tan and Kwun Tong. The products in Fo Tan will deliver to store or supermarket in New Territories and Kowloon West. For Kwun Tong, it will deliver to Kowloon East and Hong Kong Island. Different place has its office. Also , it will deliver to Macau with container. Every step includes refrigeration system to keep the perishable products.

Besides, there is some trained salesman to check the product in the store to ensure the quality. If the store has expiry products, Yakult will replace the product until all the products have sold.

6. How do Yakult prevent the leakage of the secret of its recipe?

Although it did not mention about it during the visit, however, the ingredient is public. It includes water, skimmed milk (reconstituted), glucose-fructose syrup, sugar, maltodextrin, flavouring, contains Lactobacillus casei Shirota. Dr Shirota was got a patent for this unique strain of bacteria. The patent of bacteria makes Yakult so successful in healthy drink.

7. How can Yakult ensure the level of probiotics in the Yakult is in the ideal/ appropriate amount when it reaches to the end customers?

Since Yakult is a fermented milk drink and it contains some live bacteria, the company has a strict hygiene standard in production and transportation process. In early stage, the live Lactobacillus casei Shirota strain are tested in Yakult laboratory and then added to the Fermentation tank. The temperature of the tank is kept at 37°C in order to ferment in the tank until the quantity of Lactobacillus casei bacteria reach their ideal concentration. In transportation stage, the finished products are wrapped and stored at 2-3°C to wait for delivery. Yakult uses 3 large refrigerated trucks to deliver Yakult to the warehouses of the major office (Fo Tan, Kwun Tong). Next, the products are delivered directly to different stores or supermarket. Yakult has a Quality Management Program to ensure the quality. They collect some samples from production process to do some analysis. Yakult testing involves more than 120 samples per production run and check the potential contaminants, microbiological quality, composition etc. the quality assurance not only measure the quality level but also the personnel and factory standard, for example, equipment cleaning, processing methods. The Hazard Analysis and Critical Control Points (HACCP) principles can strictly ensure the quality of Yakult.

8. Your website showed that you were planning on introducing Yakult to Ahmedabad, India in Feb, 2015. What does it drive your introduction? Did you collect information from local about their likes and dislikes? Otherwise, how do you determine which place and when to introduce the product? And how do you minimize risks (for instance of unsatisfied customers)?

Yakult has done a research in India. In the research, there were two group of people. One group drunk Yakult everyday. The other group drunk placebo everyday. The research found out Yakult can help them to build up resistance. As the water pollution problem is quite serious in India. The Indian are always sick. They always have intestinal diseases. Therefore, Yakult would like to introducing its products to Ahmedabad where is in India Yakult hopes its product can help the Indian to be more healthy. 

Yakult decides, where the place for introducing its products, according to the healthiness of the people in that place. Yakult aims at helping all of the people to be distinct from intestinal diseases. Therefore, they would introduce its products in the place that there are always disease like India. However, it would also forecast the profit before the introduction of products. It is because Yakult also needs to balance the revenue and expenditure..

9. Yakult provides home delivery service in Mainland China, Japan and Korean areas. Why don’t you provide such service in HK? 

Yakult has provided an unique service, home delivery service, to its customer. They want customers to buy their probiotic products in a convenient way. Yakult ladies will deliver the product to customer and provide lactic acid bacteria to customer. This lets consumer easy to enjoy the Yakult and understand more product’s information. 

This service has provided in Japan since 1963. Besides Japan, many countries provides home delivery service, such as Mainland China and Singapore. Hong Kong have launched this service in 1969. After a year, Yakult has stopped this service due to few reasons. First, there are different sales mode in different countries. Hong Kong people do not like to deliver product to their home. This is totally different to Japan. Also, it has different buying behavior. By comparing to other places, Hong Kong is relatively small. People are easy to buy product in a short period of time. Therefore, home delivery service is not popular and Yakult stop this service in Hong Kong.

10. Your company has different products in different countries. However, the products are sold locally. Why don’t you sell all types of flavor in all countries?

First of all, the production capacity is limited in Hong Kong. It only contains 3 production lines so the flavor variety is limited. Also, since Yakult do not contain any preservative, it is hard to have mass production with various taste. Besides, there are many competitors in overseas so the company invent different flavor in order to differentiate their products. However, there is not many competitors in Hong Kong so the flavor is limited.

11.  Would you have other sustainable policies other than the bottle recycling (e.g. plastic cover)?

Yes, there are different sustainable policies in Yakult. Since Yakult contains bacteria, even the bacteria is good one, the recycled bottle cannot be reused for Yakult again. However, the bottle will use for other purposes, such as making plastic bottle and making artificial limb. 

Besides, Yakult has a goal of making the company becomes green by offer products and services that are in harmony with the environment, operate factories and offices that minimize the environmental impact. In order to achieve this, Yakult focus on the realization of a low-carbon society, promotion on efficient use of resources, and preserve biodiversity to create a sustainable society.

Reflection

In the visit of Yakult, we saw the production line of its company. The first impression is the factory is not big. However, it can provide enough products to cope with the demand in Hong Kong and Macau. Furthermore, As the nature of the Yakult product is perishable, Yakult is required to forecast the demand very accurately. Yakult have done a well job in this. It forecasts the demand weekly and has an accurate the result. Therefore, there are not stock out problem or excess inventory problem.  

Also, we appreciate its aim. The main aim of Yakult is helping people to be healthy rather than making profit. Moreover, we increase the knowledge of the Lactobacillus casei Shirota, the function and the effectiveness of protecting our digestive system by watching a video clap. It was an enjoyable time of having fun, drinking Yakult and taking group photos with the mascot dolls.

References:

Yakult presentation contents
http://en.wikipedia.org/wiki/Yakult

http://www.yakult.com.hk/co_dr.htm
http://www.yakult.co.jp/english/company/history.html
http://www.yakult.com.cn/company/history.html