Suntory Beverage & Food’s APAC health supplement business shrinks amid inflation woes

The Japanese brewery giant, which also runs a beverage and health supplement business, said that revenue from APAC was up 1.7 per cent on a currency neutral basis to JPY$89.9bn (US$659m).

APAC ranks second in terms of revenue contribution to the firm, while the domestic market took the top spot with a revenue of JPY$145.8bn (US$1.07bn), which was an increase of 8.8 per cent as compared to last year.

However, segment profit in APAC was down 6.8 per cent on a currency neutral basis to JPY$11.8bn (US$86.5m), “due to the significant impact of negative revenue growth in the health supplement business,”​ said Noriaki Otsuka, managing executive officer, division COO during the financial results presentation.

Its health supplement business reported a 17.7 per cent decline on a currency neutral basis to JPY$8bn (US$58.6m).

One of the reasons behind the decline in APAC’s health supplement business, was the impact of inflation, which particularly affects higher-priced and high-value added products, the firm said.

“While overall revenue in APAC was strong in the first quarter, one of the factors behind the decline in segment profit was the health supplement business.

“The products in this business are relatively high priced, and the Thai market itself has not fully recovered due to inflation,” ​Otsuka said in response to questions from analysts.

BRAND’S Essence of Chicken is one of the flagship health supplements for the firm in the APAC region, especially in markets such as Thailand and Taiwan.

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