Kirin Holdings is increasingly developing into a pharmaceutical and healthcare company as it moves away from beer and beverages. Amid a shrinking beer market in Japan and setbacks in beer markets like Brazil (inside.beer, 1.6.2017) and more recently Myanmar (inside.beer, 11.3.2022), Kirin announced it would invest around JPN 100 billion (US 870 million) in its healthcare and pharmaceutical businesses over the next three years. The company plans to double revenue of its non-core business in the next 5 years from almost JPN 100 bn to JPN 200 bn in 2027.
“If the beer segment would grow forever, it would’ve been better for us to focus on it, because making a challenge in a new business is very tough,” Yoshinori Isozaki, CEO and President of Kirin Holdings told the Financial Times.
Starting from the beer business, the company expanded into the Food & Beverages domain. From the 1980s, fermentation and biotechnology have been used to expand into the Pharmaceuticals and Health Science domains. Since then, “the Kirin Group is working to provide products and services that increase the quality of life for consumers in all of their life stages and at the same time solve the social issues,” according to Kirin’s website.
The development of technology for handling raw materials began with the hops and malt used in beer. As the business expanded, knowledge and research findings were applied to grapes in the wine business and to tea leaves and coffee beans in the non-alcoholic beverages business. Today, Kirin has developed technologies that allow the company to extract functional health ingredients from a wide range of raw materials in order to solve health problems.
Similarly, Kirin has combined biotechnology with the technologies for controlling fermentation and culture that originated from beer brewing and applied these to the cultivation of various microorganisms, including lactic acid bacteria. This has led to the discovery and extraction of various useful substances (functional substances) in the field of health sciences. It is also used for the cultivation of animal and human cells in the pharmaceutical business, and forms the basis of the Kirin Group's technological capabilities.
“We want to turn Kirin into a fermentation biotechnology company. We need to grow a new business while the beer segment is still healthy,” Isozaki added. He also told the Financial Times that he wanted to avoid the fate of Eastman Kodak, the US photography pioneer that sticked to long on its lucrative analogue film business and missed out on the digital photography. The company finally filed for bankruptcy in 2012.
While JPN 100 billion will be invested in research and development and the plant expansion in the health science and pharmaceutical sector, Kirin will spend another JPN 80 in the traditional beer and beverage sector. In addition, there will be funds for mergers and acquisitions.