Yakult Australia - Invest Victoria

Investing in Victoria’s
Food Processing Industry
For New Market Access and Growth
Yakult Australia Pty. Ltd
Fermented Milk Drink Manufacturer
Yakult Australia established the drinkable probiotics
segment in Australia, and has experienced significant
growth since it commenced operations almost two decades
ago. It currently sells around 200,000 bottles per day
across Australia and New Zealand.
The Investment Story
• Construction of $30 million factory and office complex (1993)
• Australian production commenced (1994)
• $5.5 million in plant and equipment (2009-2011)
Yakult entered the Australia market in 1993, constructing a $30
million purpose built factory and office complex in Dandenong,
Victoria. It commenced production early in the following year. The
factory incorporates advanced technology that enables the application
of highly streamlined processes that meet the exacting global quality
assurance standards applicable to Yakult products worldwide.
Quality assurance is a vital component to the philosophy and
operations at Yakult Australia. Extensive and regular testing of both raw
ingredients and final product is undertaken at the onsite laboratory and
throughout the manufacturing process. The bacterium, Lactobacillus
casei Shirota strain, unique to the production of Yakult products is
grown onsite for use in the Victorian manufacturing process.
Since establishment, further investments have been made. In 2006,
additional fermentation tanks were installed, increasing the capacity
of the existing operations. Over 2009, Yakult Australia invested
$1.5 million in a range of areas including; a new onsite warehouse
and logistics centre, a manufacturing annexe, and additional bottle
storage facilities. Over the year it also invested in systems to reduce
and recycle wastewater, including systems to maximise the capture of
rainwater for use within production, particularly for cleaning purposes.
Over 2010 and 2011, Yakult invested a further $4 million, enhancing
capacity and efficiencies at the plant, enabling the company to meet
increasing consumer demand. The investment includes a new filling
plant unit increasing capacity of both the 5 and 10-pack line. It also
includes a new moulding machine and a liquid sugar annexe, with
further plans to install additional equipment in early 2012.
Yakult LIGHT was launched in 2004, in response to increasingly
health-conscious consumers. The launch of the lighter ‘reduced sugar’
variety has not come at the expense of the original variety, but has in
fact established a new market.
In order to establish itself in Australia, Yakult Australia invested in
a range of marketing activities, including supermarket sampling,
national television advertising, newsletters, magazines, website,
home delivery, consumer information service and sponsorship.
While the marketing focus today has changed, education remains an
important focus. The company welcomes visitors and offers factory
tours to 4,000 to 5,000 visitors per year.
Yakult Australia’s Investment in Victoria’s Food Industry
Supply Chain
R&D
Primary
production
Manufacturing
& processing
Packaging
& distribution
Transport
& storage
Wholesale
& retail
Yakult Australia is involved in manufacturing, packaging, storage and distribution, and also
invests in building direct relationships with retailers.
Key Reasons for Investing in Victoria
• Victoria was chosen as the ideal location for establishing Yakult
Australia, due to the proximity to high quality raw ingredients,
locational advantages in terms of transportation options,
availability of sites for development, and the level of acceptance
to new foods by consumers.
Two years prior to establishment, the company invested in extensive
market research in order to identify consumer acceptance and
knowledge of fermented milk drinks. As a result of this research,
it was determined that Melbourne was the best location to launch
the product, and establish the manufacturing base. The Victorian
Government provided important administrative support in
establishing the business.
Yakult sources two of its core primary ingredients from Victorian
suppliers - skim milk powder and sugar - and was attracted by the
high quality product on offer in the state. Victorian skim milk powder
is also used by 6 other South East Asian countries, involving 8
factories, in the production of Yakult product.
When looking to establish the factory, Dandenong appealed due to
the availability and affordability of suitable green field sites. Similarly,
the area also offered access to a suitable labour market, and continues
to do so today.

With much of the distribution occurring by road, Victoria has the
advantage of being centrally located to other states, and also offers
frequent air transport services for the distribution of exports to
New Zealand.
Once operations in Victoria were well established and offered
stable market demand, sales were expanded to New South Wales,
Queensland, South Australia, Western Australia and Tasmania in
successive steps.
“Yakult’s corporate philosophy is to contribute to the
health and happiness of people around the world. The three
principles of company founder Dr. Minoru Shirota - the
importance of preventive medicine, a healthy intestine leads
to a long life, and good health at an affordable price – are the
basis of Yakult Australia’s operations and have contributed to
the company’s ongoing success in Victoria”.
Mr. Kenji Ono, Managing Director, Yakult Australia
Benefits from Investing in Victoria
• Yakult Australia has achieved notable growth in sales and
market penetration since its establishment in Victoria. It has
also experienced growth in profits, increased production
capacity, and workforce stability.
The success of Yakult products in Australia is particularly noteworthy
given it launched a product into a new category. Sales have grown
progressively each year since manufacturing began. This has been
supported by growth in its loyal and regular customer base,
which continues to expand over time. Sales of Yakult LIGHT
have continued to grow since released in 2004, and now make
up 20 per cent of total sales.
The ongoing expansion, including the new packing line, has enabled
the company to increase the number of permanent employee and
reduce reliance on casual employees. This has benefited the company by
enabling it to ‘multi-skill’ its workforce and retain company knowledge.
Today, Yakult Australia sells around 200,000 bottles per day, and in
2011 reported turnover of approximately $33 million.
Key Company Facts
Yakult Australia is based in Dandenong, in Victoria’s south-eastern
suburbs. The company also has sales offices across Australia, and in
Auckland, New Zealand. Product is distributed from Dandenong, across
Australia, with around 5 per cent of sales exported to New Zealand. Yakult
Australia employs 123 staff nationally, 70 of which are based in Victoria.
Yakult Australia produces two core products Yakult Original and
Yakult LIGHT, in a 5-pack and 10-pack. Despite boasting a 45 day
shelf life, product is not stored onsite, but distributed as soon as
possible after manufacture to assure ultimate freshness.
Product is distributed by refrigerated truck to the major retailers,
including Coles and Woolworths, for distribution onto individual
stores. The remainder of the product is distributed in small
refrigerated vans direct to individual route customers, including
independent grocers, milk bars, Asian grocers, and health food stores.
Yakult Australia is a wholly-owned subsidiary of Yakult Honsha Co
Ltd, based in Tokyo Japan. Yakult Honsha is involved in food and
beverages, cosmetics and pharmaceuticals. The Yakult group continues
to expand and currently employs more than 27,000 people worldwide.
For further information on Victoria’s food and beverage
capabilities, please visit:
www.food.vic.gov.au
www.invest.vic.gov.au/food-beverage
For further information on Yakult Australia, please contact:
Locked Bag 1403
Dandenong South VIC 3164
Australia
Phone: +613 9238 4700
Fax: +613 9238 4799
www.yakult.com.au
For further information on investing in Victoria, please contact
Invest Victoria through your local Victorian Government
Business Office
Email: info@invest.vic.gov.au
www.investvictoria.com
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© Copyright State of Victoria, October 2011.
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