Hello Market Shakers!

Welcome to Market Shake’s last, but not least issue on the plant-based milk market in Japan. On the menu today, Alpro’s launch in Japan, with both an interview with Marcio Fukuda, Marketing Manager at Danone, and comments from Duco Delgorge.

We overviewed how the Japanese market seems to be catching up fast with the worldwide plant-based revolution in our past newsletters Beyond Milk, Consumers’ Sound Bites, and Shelf Sweep.

In the last few years, Japanese consumers grew more health-conscious than perhaps ever before, and it’s a key driver to what’s happening in the market. Environmental and ethical concerns are not yet top priorities in Japan, but there’s a growing sensibility to sustainability.

These preexisting trends accelerated with the pandemic, a time during which consumers grew worried about their health (preventing sickness, diet) and product quality. The Japanese market, long dominated by soy milk, had already made room for alternative milk such as almond (a boom going back to 2017).

Sensing the timing was right after careful market research, Danone group launched Alpro nationwide in 2020, aiming to take the lead and grow the plant-based category in Japan.

Alpro’s history in a nutshell

Founded in the 80s, Alpro has a long history of bringing organic plant-based products to Europe and beyond. Over the years, the Belgium-based company has developed a strong portfolio of vegan products made from soy, oat, nuts, and more, under the brands Alpro and Provamel, and Belsoy.

In 2009, Alpro passed through its parent company Vandemoortel to the hands of WhiteWave Foods, a soymilk producer belonging to the American food giant Dean Foods. In 2016, the French Danone group purchased WhiteWave Foods, absorbing Alpro at the same time, for $12.5 billion—its largest acquisition since 2007. The investment came as a growing number of consumers embraced a dairy-free lifestyle.

Alpro brings “diversification to the Japanese plant-based milk scene.”

Today, we bring you an exciting interview with Marcio Fukuda, marketing manager at Danone. We were curious to know more about Alpro’s launch in Japan, its challenges, and its success.

PR Times announces Alpro’s launch in Japan.

What prompted Danone to sense the time was right for new plant-based milk on the Japanese market?

The Japanese plant-based market is growing, catching up with global trends. Inbound tourism prompted foodservice to open up to veganism, but the local demand also embraced a more healthy, sustainable lifestyle, pushed for new alternative meat and dairy products. Oat milk, in particular, has been booming in Europe and the United States.

Confident in market growth, Danone first surveyed Japanese consumers’ needs before considering bringing Alpro Oatmilk to the market.

“One major motivation for consumers in Japan is health. They are very keen to get specific nutrients, like protein and isoflavones, from soy. At the same time, the taste is an important driver.”

Danone considered what value-added they could bring to Japanese consumers as a world-leading plant-based company and found that oat milk could be a perfect match. “Alpro is full of fiber. Japanese consumers who tried our oat milk found it delicious and easy to drink. It satisfied the two biggest consumer requirements: health and taste.”

When asked about oat milk’s place among soy and almond, Marcio Fukuda is convinced.

“Alpro Oatmilk really ticks the boxes when it comes to what Japanese consumers are looking for in plant-based milk. We foresee oat growing to be a sizable segment alongside other ingredients like soy and almond. The fact that other companies will launch oat milk products is also evidence of that.”

Education and samples to convert consumers into Alpro fans.

Japan can be a challenging market, and launching a new product is not easy, even for a well-implanted company. “Oat itself, the main ingredient of our oat milk, has been growing in popularity among very health-conscious Japanese consumers. But it is not widely known in Japan. So our challenge is not just to make people aware of Alpro, but also more familiar to oat itself and the benefits of Alpro Oatmilk.”

For Danone, the strategy to convert consumers is a two-step process, starting with educating them through media. “We have been focusing on getting as many people as possible to understand Alpro’s benefits and set up TV and digital campaigns.” The second part of their strategy is to tap into Japanese consumers’ curiosity and love for novelty, especially foreign products. “In parallel with our campaigns, we also make it easy for people to try it out. We organized sampling activities at yoga studios and with food deliveries.”

Hot yoga is popular in Japan, and studios’ clientele is a perfect match with Alpro’s consumers. Danone partnered with one chain in particular, and its staff and instructors became Alpro advocates.

The team behind Alpro also made sure the package visual was more than self-explanatory, adding visuals of milk, and went beyond the typical translation of label and text into Japanese.

“We also chose to create a Japan-exclusive 250ml size for this product. Small sizes are mainstream in Japan, as consumers drink it as it is during breaks or on the go.”

Japanese retailers and wholesalers warmly welcomed oat milk.

We were particularly curious to know about retailers' and wholesalers' perceptions of the category's potential before and after the launch. For Marcio Fukuda, their confidence in the potential of Alpro’s product has been essential to making its launch happen in Japan.

“Soymilk was growing until 2019, but the fact is that it is a very commoditized segment. Retailers really looked forward to the type of added-value and excitement Danone can bring to Japan and fully embraced our decision to launch Alpro Oatmilk.”

Alpro’s POP at a Super Center Trail supermarket

Working hand in hand with their key partners, Danone conducted in-market tests for new products and adopted new ways to display them. To familiarize Japanese consumers with oat milk, they provided cooking class activities and looked for opportunities to expand their classes in light of their success.

Did this hard groundwork pay off and convince Japanese consumers to make some space for Alpro in their pantry?

Vegan and health-conscious consumers aware of oat milk benefits were excited to see more variety come to the market. But for plant-based brands, the key to thriving in Japan is to convince enough consumers and become mainstream. A bet Alpro seems to be winning.

“Sales have been growing steadily, and we had to revise our forecast. We see an increasing number of consumers sharing their experience of trying Alpro Oatmilk, and the comments are very positive.”

On top of positive reviews, Danone’s customer center gets frequent inquiries regarding Alpro’s in-store availability, an encouraging sign for the group to expand its distribution.

Is Japan playing catch-up with North America, Europe, and other markets where there are signs of a plant-based revolution?

Many factors are behind the meteoric increase of plant-based food and beverage products across boards. The biggest of all could be the rise of “flexitarians,” a category of consumers that is not specifically vegetarian or vegan but adapt their practices to achieve a balanced and sustainable diet.

The same scenario applies to Japan, but with a slightly different landscape. “Soymilk and tofu have been part of people’s diet for a long time. In that sense, we can say most Japanese people were flexitarians before it even became cool. But unfortunately, it tends to be limited to soy-based products. Japanese retailers’ plant-based milk shelves are less diverse compared to what we see abroad.”

With a population already used to consume soy, Danone aims to diversify ingredients as well as applications. An ample opportunity for Japan to break with plant-based boredom.

“As lifestyles diversify, the nutrients that consumers are concerned about and the flavors and textures they prefer will also diversify. The growth of almond milk in Japan is evidence of this. And the initial acceptance of oat milk shows that it has the potential to be even bigger than almond.”

What can we learn from Alpro’s launch?

We talked about plant-based milk with Duco Delgorge, CEO of Joft, an import agency facilitating international food producers to build long-term success in Japan. With 30 years of experience and a successful track record leading food importing companies, Duco has in-depth market knowledge and was the right choice for an insight into what’s happening in Japan.

Can oat milk become the third milk in Japan?

“I think Alpro did very well. One key factor is the retail price, which is below 400 yen per liter. Most imported plant-based milks are priced above 600 yen per liter, mainly due to the distribution channels. This is too high and puts them out of reach of most consumers. Danone has also invested a lot in promotion to build awareness and trial. Also, Alpro is an excellent product, which tastes great.”

Alpro’s oat milk isn’t the only one on the Japanese market, smaller players were already present, and Coca-Cola recently launched its own brand. But Alpro certainly propelled oat milk on the front scene. For a couple of years, consumers could find mainly premium products, such as Minor Figures, at upscale or organic supermarkets or cafes.

“Japan has been very slow to introduce new plant-based milks. Soy milk was the dominant type for a very long time. When almond milk came along, it took a few years to develop, and it isn’t even the greatest alternative in my opinion.” Oat milk is better than almond milk from both a taste and a sustainability perspective.

“There’s also rice milk, but nutritionally, it isn’t a great choice, and many consumers don't like the taste. Hazelnut milk and macadamia milk taste great but are perhaps too extravagant and expensive.”

Oat milk is massive in Europe and the US. While it’s still a niche in Japan, for now, the potential is there. “I'm convinced oat milk will over-take almond milk in Japan over the next five years. It probably won’t over-take soy milk, though, as local producers are very powerful and price competitive. To reach parity would require a further price reduction.”

What do retailers think about these trends?

Most Japanese retailers tend to be conservative. They catch a sense of these growing trends, but at the same time, they have little data to go on and tend to wait until they see more evidence of demand before jumping aboard.

"The market will slowly but steadily expand. For now, most imports of plant-based milk are via the conventional importing route: importer, wholesaler, retailer; usually a premium supermarket. Premium supermarket chains can offer a wider choice and new and different products that others are not yet ready to take on, but the prices are high, thereby restricting sales. The market will grow more quickly when large companies, like Danone with Alpro, take a more progressive approach, or if retailers import directly, thereby also allowing much more competitive pricing. This is the case with Bio c' Bon Japon, who has seen great success with Isola Bio plant-based milk launched several years ago, imported directly from Italy, with an extensive range and investing in promotional support."

At the end of the day, retailers are all about business matters. But are they sensitive to the same issues as consumers, environment, sustainability, health…? The story an importer brings to the table must start with a good product, with great taste and a positive image. “When it comes to design and packaging, I feel the rest of the world has been far more progressive.” In other words, retailers are not always ready to break down boundaries and embrace things that are entirely new to them. The good news is, Japan seems quite open to plant-based. “I think there are fewer barriers if you are not too niche and select attractive products. The best thing is to focus on products that will intuitively work from both an image and taste perspective. And they must be affordable!”

That’s all, folks!

Next week, Market Shake will conclude this series with Daniel Kwintner, brand and strategy consultant. Daniel designed a refreshing packaging for OATme, a foreign brand of oat milk, but domestically produced in Japan and shared his professional experience and insights on the Japanese market.

Industry News

Market Shake is brought to you by GourmetPro - Food & Beverage experts in Japan. Reach out for questions and comments!

👉 P.S.: GourmetPro is also on Linkedin and Twitter!

Market Shake by GourmetPro

Beyond Milk #4: Alpro’s Launch in Japan Put…