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NIPPN: Diversifying, globalizing and rebranding to serve fast-changing food and nutrition markets
The world has changed beyond recognition since Nippon Flour Mills was founded in 1896. Nippon, Japan's first private mechanical flour milling company, entered a world of localized markets filled with many people whose main health concern was simply getting enough food. Today, the company faces a very different operating environment and is adapting accordingly, diversifying and globalizing its business. To reflect those changes, the company has adopted a new name: NIPPN CORPORATION.
NIPPN’s rebranding follows a period in which it has adapted to long-term trends, such as the aging of societies and rise of health-conscious consumers, and acute pressures caused by the COVID-19 crisis.
In 2019, Japan had 51 old-age dependents for every 100 working-age people.1 No other country had more than 40 old-age dependents per 100 working-age people. While Japan’s population is unusually heavily skewed toward older people today, in the coming years it will become normal for countries to have 50 or more old-age dependents for every 100 working-age people. By 2050, ten countries are forecast to have old-age dependency ratios of 65 or higher. Japan, Korea, Spain and Greece are forecast to have ratios of 75 or higher.
The aging of societies is contributing to growth in the number of health-conscious consumers. The Japanese market for health and functional foods grew to JPY 867.5 billion ($8.4 billion) in 2019.2 The interest in health and wellness seen in Japan is echoed in markets around the world.
Health is a top food purchasing driver in the US.3 More than half of US consumers say health has a bigger influence over their food purchases today than it did 10 years ago, making it the fastest-rising buying driver. Almost two-thirds of Americans aged 50 years and older pay more attention to health when buying food than they did 10 years ago.
Consumers are striving to eat more healthily while simultaneously relying more on convenience food to save time in their busy lifestyles. Twenty percent of Americans say they are eating more processed food than a decade ago. An even higher proportion of people are eating more fast food or dining out more often.
Manufacturers are responding to the changes in consumer priorities with products that are healthy and convenient. Japanese retail sales of naturally healthy packaged foods are forecast to grow from $2.2 billion in 2012 to $3.5 billion in 2022.4 Nutraceutical markets in Asia Pacific and other regions are growing, too.5
COVID-19 accelerated the long-running rise in demand for healthy and convenient products. Sales of frozen food and ready meals surged in Japan in 2020.6,7 Market analysts also tracked a rise in demand for dietary supplements as part of a broader increase in consumer awareness of the importance of proactively acting to prevent health problems.
How NIPPN is changing
NIPPN began diversifying beyond flour milling in the 1950s, moving into areas such as pasta, premix, frozen foods and ready-made meals to meet the changing demands of Japanese consumers over the second half of the 20th century. The diversification was accompanied by globalization, with NIPPN establishing presences in countries including the US, Thailand, China and Indonesia.
As the pace of societal change accelerated in recent years, NIPPN stepped up its diversification and globalization strategy. In the fourth quarter of 2020 alone, NIPPN completed construction of a premix plant and two frozen food facilities.8–10 The new facilities include NIPPN’s first overseas frozen food plant, a site in Thailand that has capacity for 1,300 tons of frozen dough a year. At the new Japanese frozen food plant, NIPPN will make up to 42 million home-use frozen meals a year.
Following the expansions, NIPPN conducts local production and sales activities at three business locations in China and two business locations in each of Thailand, Indonesia and in the US. The sites in China, Thailand and Indonesia manufacture and sell premix and related products, while the two US sites are focused on flour-based products including pasta and premix.
The significant expansions equip NIPPN to meet rising demand for food products that fit in with the busy lives of modern consumers and the increase in at-home consumption precipitated by COVID-19. In parallel, NIPPN has invested in products that address the health and wellness priorities of modern consumers.
In 2019, NIPPN introduced a brain and eye health supplement that contains ginkgo biloba extract, lutein and zeaxanthin, as well as a supplement that contains “maslinic acid” derived from olive fruit, the original ingredient of NIPPN, intended for use in the prevention of chronic knee pain, muscle loss and other mobility-related conditions.11,12
The new products serve growing parts of the nutrition market. Sales of eye health supplements were outpacing the broader market even before the start of the pandemic.13 Greater home working caused by the pandemic further increased screen time and, in doing so, intensified interest in eye health.14 Equally, brain health and mobility are top priorities for consumers in aging societies.15,16
By changing its company name, NIPPN has reflected its historical expansion beyond flour milling and reiterated its commitment to continued diversification and globalization. In the years to come, NIPPN will continue to grow its presence outside of Japan and expand its portfolio of food and nutrition products, thereby equipping itself to meet the changing needs of consumers, wherever they live.
References
1. World Population Ageing 2019 Highlights. https://www.un.org/en/development/desa/population/publications/pdf/ageing/WorldPopulationAgeing2019-Highlights.pdf.
2. Topic: Health and functional foods market in Japan. https://www.statista.com/topics/4820/health-and-functional-foods-market-in-japan/.
3. 2020 FOOD & HEALTH SURVEY. https://foodinsight.org/wp-content/uploads/2020/06/IFIC-Food-and-Health-Survey-2020.pdf.
4. Japan: NH packaged food market sales value 2012-2022. https://www.statista.com/statistics/866119/japan-naturally-healthy-packaged-food-market-sales-value/.
5. The Asia pacific nutraceutical product market. https://www.monteloeder.com/the-asia-pacific-nutraceutical-product-market/ (2018).
6. The consumer impact of Coronavirus in Japan. https://blog.euromonitor.com/the-consumer-impact-of-coronavirus-in-japan/ (2020).
7. FUTURE WATCH UPDATE ON CONSUMER TRENDS AND LIFESTYLES IN JAPAN AND SOUTH KOREA IN LIGHT OF THE COVID-19 PANDEMIC. https://www.marketopportunities.fi/4a8542/siteassets/market-opportunities/futurewatch_consumer-trends-and-lifestyles-in-japan-and-s-korea-in-light-of-the-covid-19-pandemic.pdf.
8. Completion of Premix Plant Construction at Fukuoka Mill. https://www.nippn.co.jp/en/news/detail/__icsFiles/afieldfile/2020/11/06/Completion_of_Premix_Plant_Construction_at_Fukuoka_Mill.pdf.
9. Completion of Frozen Food Plant 2 at Isesaki Plant, NIPPN Frozen Food Co., Ltd. https://www.nippn.co.jp/en/news/detail/__icsFiles/afieldfile/2020/11/20/20201120.pdf.
10. Completion of Frozen Dough Manufacturing Plant at NIPPN (Thailand) Co., Ltd. https://www.nippn.co.jp/en/news/detail/__icsFiles/afieldfile/2020/12/04/20201130.pdf.
11. Lim, G. Y. Nippon Flour Mills launched new eye and brain supplement targeting senior consumers. https://www.nutraingredients-asia.com/Article/2019/09/13/Nippon-Flour-Mills-launched-new-eye-and-brain-supplement-targeting-senior-consumers (2019).
12. Lim, G. Y. WATCH: Nippon Flour Mills reveals new healthy ageing ingredient to prevent mobility-related disability. https://www.nutraingredients-asia.com/Article/2019/10/17/WATCH-Nippon-Flour-Mills-reveals-new-healthy-ageing-ingredient-to-prevent-mobility-related-disability (2019).
13. A New Eye Health Consumer Emerges As COVID-19 Continues To Shift Health Behaviors. https://www.nutraceuticalsworld.com/contents/view_online-exclusives/2020-05-27/a-new-eye-health-consumer-emerges-as-covid-19-continues-to-shift-health-behaviors/.
14. Alcon Survey Shows More Screen Time Causing Consumer Concern About Eye Health, Increasing Symptoms of dry eye. https://www.businesswire.com/news/home/20200721005237/en/Alcon-Survey-Shows-More-Screen-Time-Causing-Consumer-Concern-About-Eye-Health-Increasing-Symptoms-of-Dry-Eye (2020).
15. Williams, L. A. More Consumers Want Foods and Drinks with Functional, Better-For-You Benefits. Prepared Foods https://www.preparedfoods.com/articles/124198-more-consumers-want-foods-and-drinks-with-functional-better-for-you-benefits (2020).
16. America’s health check-up: AARP and Abbott survey finds half of adults 50-plus wish they had more strength and energy to enjoy daily activities. https://abbott.mediaroom.com/2016-05-04-Americas-Health-Check-up-AARP-and-Abbott-Survey-Finds-Half-of-Adults-50-Plus-Wish-They-Had-More-Strength-and-Energy-to-Enjoy-Daily-Activities.