Japan’s biggest producer of vegetable juices, Kagome has succeeded in reversing a decline in sales by re-launching four of its leading SKUs in Tetra Brik® Aseptic 200 Slim Leaf in October 2015. With its innovative shape, the new package creates an eye-catching display and offers new design possibilities. It’s also the first Kagome package to carry the Forest Stewardship Council™ (FSC™) logo.
Established in 1899, Kagome pioneered tomato products and vegetable juices in Japan. Today, it has around 2,300 employees, an annual turnover of €1 billion and a product range that also features fruit juices and lactic acid drinks. Overseas markets include the US and Australia, but around 70% of revenue comes from Japan, where Kagome is the biggest player in the vegetable and fruit juice market with a 48% share. Our partnership dates back to 1981 and Kagome is now one of our biggest customers in South Asia, East Asia & Oceania.
Since 2012, demand for vegetable juice in Japan has been falling, with so-called ‘heavy users’ increasingly choosing to buy fresh vegetables and either consume them as they are or make their own juice at home, and ‘light users’ being tempted away by a growing range of other ‘healthy’ alternatives such as drinking yogurt, soy milk and drinks carrying the Japanese government’s FOSHU certification mark. Kagome wanted to find a way to reverse this trend and at the same time satisfy growing demand from convenience store buyers for ‘something new’ to add variety to their shelves and stimulate consumer interest.
Our ReFit your lines, ReShape your future™ programme offers customers a cost-effective way of achieving differentiation by converting installed lines to produce new package shapes. For Kagome, the programme offered a compelling solution that met all of their requirements: converting some of their installed Tetra Pak® TBA/22 filling machines and moving four leading SKUs – Yasai Ichinichi Kore Ippon (“Vegetable for a day”) and Yasaiseikatsu (“Vegetable life”) Original, Fruity Salad and Energy Roots – from Tetra Brik Aseptic 200 Slim into Tetra Brik Aseptic 200 Slim Leaf. This would be the first time a package with leaf-shaped panels had been deployed in the Japanese market, and research confirmed its appeal: 96% of participants said it was easy to handle, and 88% said they would buy the package. It was also perceived as stylish, visually appealing, advanced and robust. The conversion itself would take just two weeks, keeping production down time to an absolute minimum. At the same time, Kagome seized the opportunity to add further differentiation by reformulating the juices themselves to include fibre, and by switching to FSC™ certified paperboard – another first. The solution offered cost savings: the new packages could be produced using the Flex printing process rather than the more expensive rotogravure. And the new SKUs would be available exclusively in convenience stores – the main retail channel for juices in portion packs in Japan – capitalizing on the new shape and formulation to command a higher price.
The new package also opened up new branding opportunities, and we worked closely with Kagome to develop a range of targeted promotional activities including a website, a membership programme, YouTube video, ads in trains and store shelf POPs. The package underwent a redesign, in order to maximize its impact on the shelf and make effective use of the panels to convey compelling messages about the health benefits of drinking vegetable juice and the improved flavour of the reformulated product.
Kagome’s target was simply to halt the decline in sales. In fact, overall sales in the three months post-launch are up 33% compared with the previous year, driven by double-digit growth in two SKUs, Fruity Salad and Energy Roots. Purchase frequency and penetration have also increased, with the new SKUs available in almost 100% of convenience stores – up from around 90% prior to the relaunch. The customer response has been enthusiastic. “By renewing the package – and reinvigorating the product – we have responded to consumer’s needs and expanded our consumer base,” says Kota Hayashi of Kagome’s Consumer Product Division. “We can use the panels on the package to highlight the benefits, and to make our product stand out on the shelf. And by using FSC certified paperboard we are promoting our environmental credentials too.”
Looking to the future, Kagome is exploring ways to further optimize the panels on the new packages to convey more information and make the products even more appealing to consumers. There is also scope to build on the exclusivity of the relationship with convenience stores, and on the use of FSC certified paperboard to create even more differentiation and competitive advantage.