Yakult (益力多): 50 Years in Hong Kong

York Lol: Yakult (益力多): 50 Years in Hong Kong

Yakult 50 Years In Hong Kong Image 1 York Lo

Left: glass bottle of Yakult before 1971; Middle: the original Yakult HK plant at 161 Wai Yip Street in Kwun Tong (Yakult HK website); Right: plastic bottle of Yakult today

In the late 1960s around the same time when Japanese instant noodle (see our article on Winner Food and Doll noodles) and Japanese rice cookers became popular in HK, another Japanese item – the probiotic dairy drink Yakult – came on the scene which eventually became a staple in the refrigerators of HK households. In 2015, the daily consumption of Yakult in HK was 632,000 bottles per day and HK Yakult continues to dominate the local drinking yogurt market with 46% share of retail sales in 2016.

Made by fermenting a mixture of skimmed milk and a special strain of bacterium Lactobacillus casei shirota created by Japanese microbiologist and Yakult founder Dr. Shirota Minoru (代田 稔, 1899-1982) in 1930, Yakult has a bottling operations model similar to Coca-Cola where local bottlers in 31 countries produce the drink using the same bacteria culture provided from a mother strain developed at Yakult Honsha, the parent company in Japan founded in 1935.

After achieving success in Japan, Yakult first ventured overseas in 1964 when it set up its operations in Taiwan (which went by a different Chinese name of 養樂多) with local partners – a syndicate led by two tea merchants Lee Tuen-chu (李團居) and Chen Chung-kuang (陳重光, 1913-1998) with the latter being politically extremely well-connected as a member of the Taiwan provincial assembly and later head of one of the 3 state-owned TV stations and the baseball federation. Yakult then set their eyes on Hong Kong where they found an eclectic yet dynamic foursome that included a politician/lawyer, a painter turned merchant, an enterprising trader and a Swatow lace merchant as partners.

The politician/lawyer, who served as the chairman of HK Yakult for decades was Woo Pak-chuen CBE JP (胡百全, 1910-2008), the son of Swire comprador Woo Hay-tong and UK trained solicitor who was Legislative Councilor from 1964 to 1973 and Exco member from 1972 to 1976. Aside from Yakult, Woo was also chairman of Kowloon Motor Bus and board member of Liu Chong Hing Bank (1972-2004) and Sun Hung Kai Financial. (for more on the Woo family, read my entry in the Dictionary of HK Biography, 2011).

The painter was Fan Hon-chia (范洪甲, 1904-1998), the managing director of the venture, whose strong connections in Japan and Taiwan was likely critical to the formation of the Yakult venture. Born in Hsinchu and grew up in Tainan, Fan graduated from the Tokyo School of Fine Arts (precursor of Tokyo University of the Arts) in 1930 and became a renowned painter. To generate steady income to support his young family, he also worked as an interpreter for the Japanese courts in Taiwan and the Japanese armed forces in South China and Southeast Asia in the 1930s. After the 228 Incident in Taiwan in 1947, Fan relocated to HK and Japan where he was involved in the trading business such as importing Taiwanese bananas into Japan. He became a Japanese citizen in 1963 and adopted the Japanese name of Kogen Hong-chia (高原洪甲). Before he started HK Yakult, his business interests also included mining in Manila in the 1960s. Due to his business commitments, he gave up painting for many years but was celebrated as a pioneering Taiwanese modern painter in his final years.

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Left: Hong Kong Scenery by Fan Hong-chia; Right: President Lee Teng-hui (centre) and wife (right) with Fan Hong-chia (left) at his 90th birthday show at the Taipei Fine Arts Museum in 1995.

The trader was Tinson Lam Sou-ham (林守鑫), whose Hock Tai Hong I & E Ltd (福泰行出入口有限公司) was involved in exporting a wide variety of products ranging from ashtrays to plastic flowers and toys to socks and blouses. He was also the chairman of the property developer Winfair Investment (永發置業) when it went public in 1973. The Swatow lace merchant was Lim Ping-suan (林炳宣, 1922-), a native of Chaoyang who founded E-Shing Embroidery & Garment Factory (怡成抽綉製衣廠有限公司) and was named an honorary citizen of Swatow for his generous donations to his hometown.

While both the Yakult Japan and HK websites show the inception year of the HK operation as 1969 (which is true since that was the year when local production of Yakult began), Hong Kong Yakult Co Ltd (香港益力多乳品有限公司) was incorporated in July 1966 and the article from October 1966 shows that plans for local production had already began in 1966 with 5 executives from Japan flying into Hong Kong for planning meetings. Another visit by Japanese executives took place in April 1967 and plans to open a factory in Kwun Tong was announced to the press at the banquet at the Golden Crown Restaurant in TST hosted by PC Woo. However, the plans were likely stalled by the riots that year and construction of the plant did not commence until 1968. At the time, Yakult already had plants in Brazil and Mexico in addition to Taiwan with 45000 workers worldwide and daily sales of 16 million bottles (in 2015, that figure was 33.8 million). In December 1968, Yakult participated in the HK Products Expo to soft launch the product and in spring of 1969, the $5 million Yakult plant went into production. The original plant at 161 Tsun Yip Street in Kwun Tong at first was producing Yakult in glass bottles and the plant featured what was allegedly the only ultrasonic bottle cleaning machine in HK at the time. In 1971, the plant switched to bottling Yakult in the familiar polystyrene (PS) plastic bottles the brand came to be identified with.

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Five Yakult executives from Japan arriving in HK in 1966 (WKYP, 1966-10-7)

The distribution of Yakult was initially done through direct marketing, through housewives which was how it was marketed in Taiwan as well since 1966. The rationale of this approach was because Yakult has always been positioned as a nutritional drink especially for children, so mothers were a beachhead market segment for the firm. With the rise of supermarket chains in the 1970s and convenience stores in the 1980s, the direct marketing model was phased out.

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Article about Yakult’s participation at the HK Products Expo with a picture of its production facilities (WKYP, 1969-11-28)

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Lam Sou-ham (right) speaking at the Castle Peak Lions Club about nutrition and longevity in 1969 (WKYP, 1969-11-8)

To promote Yakult, the firm spent heavily on advertising and promotional events such as lucky draws and Lam Sou-ham himself went on the speaking circuit as a nutritional expert (as seen above) promoting the health benefits of the product. Business took off and Yakult successfully created a new beverage category in HK which it jas dominated for decades since its launch.

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Directors of Yakult HK at its 10th anniversary in 1978. Front row left to right: Fan Hung-chia, P.C. Woo, Sugao Hirao (平尾), Imada-san (今田), Back row from right to left: Tsunoda-san (角田利武), Lam Sou-ham, Lim Ping-suan, Lam Kai-leung () (Kung Sheung Evening News, 1978-10-11)

In 1994, Yakult moved into new production facilities at the Tai Po Industrial Estate in the New Territories. In January 2001, HK Yakult in partnership with Yakult Honsha and Yakult Taiwan together with local partners formed Guangzhou Yakult Co Ltd with total investments of RMB247.5 million and production began in June 2002. (By 2015, Yakult was producing 2.1 million bottles per day in Guangzhou and a second plant was added in 2014) By 2002, the daily sales of Yakult in HK were 399,000 bottles a day with annual sales of US$24.8 million. During the SARS epidemic in 2003, daily sales of Yakult in HK tripled to its all-time high of 900,000 bottles a day on rumors that it had an effect against the virus, sending even the stock price of Yakult Honsha in Japan to a 9 year high. In 2004, three parties (Yakult Japan, HK and Taiwan) successfully blocked Yakudo, a firm formed by the eldest son of Yakult Taiwan co-founder Lee Tuen-chu from selling his products in HK.

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P.C. Woo at the 20th anniversary of Yakult Hong Kong (WKYP, 1988-1-17)

Despite of its health benefits, one criticism has been the sugar content of Yakult so in recent years the firm had introduced a line of diet tea Banshoreicha in 2009 and also began manufacturing the low-sugar  Yakult Light in HK in 2011.

Additional Sources:

  1. https://www.yakult-hk.com/history
  2. http://nrch.culture.tw/twpedia.aspx?id=4693
  3. http://www.scmp.com/article/446070/yakult-gets-rival-yakudo-banned
  4. http://www.fac1988.com.tw/goclass.php?ASN=60
  5. http://talk.ltn.com.tw/article/breakingnews/1757287
  6. http://www.yakult.co.jp/english/ir/management/pdf/ar2015.pdf
  7. http://www.euromonitor.com/yoghurt-and-sour-milk-products-in-hong-kong-china/report
  8. https://en.wikipedia.org/wiki/Woo_Pak-chuen
  9. Kung Sheung Daily News, 1967-4-27, 1968-12-7
  10. https://www.marketwatch.com/story/hk-sars-panic-sends-japan-yakult-stock-soaring

This article was first posted on 21st March 2018.

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