It has paid off for Nestle to wait and be the latest food company to employ genetics to market food. In fact, there’s a good chance that Nestle’s Japanese branch, which sells nutritional supplements and drinks to the elderly, will become a billion-dollar business in the next 10 years.
The key is in their new program where people can subscribe to get nutrition recommendations and buy healthy shakes and capsules. The annual costs of this program can grow up to $600. Nestle reports that more and more people are signing up for the program. This is why their market projections are incredible. But how did Nestle penetrated this market and ensured success?
The secret behind Nestle’s success in Japan
By using their cutting-edge technologies Nestle can be of great help to Japan’s population. In fact, they have developed an app that enables consumers to photograph their meals and send the images by using any smartphone at their disposal.
Behind this simple chat application there is a powerful AI capable of analyzing the consumers’ meals and offering them Nestle’s healthy and nutritious food supplements. This type of advice in the form of a meal roundup resonated really well with the market. In addition, Nestle can also base their advice for a healthy drink on blood samples and DNA.
This model is so versatile that it can be applied to improve consumers’ supplementation in any of the world’s markets.
The CEO of Nestle Japan weighs in on the issue
In one of his latest interviews in Tokyo, Kozo Takaoka, CEO of Nestle Japan, said that this program is specifically designed to help the company shift the focus on healthier options. It appears that this effort is starting to pay off, as the company is rapidly distancing itself from the traditional high-calorie chocolates and sweets.
The company’s 2017 sales in Japan amounted to $1.8 billion. Kazaoka explained the reasoning behind Nestle’s decision to break into the health and nutrition market in a recent interview.
Takaoka said that Nestle’s executives are very well aware of the growing health problems across the globe, especially the ones associated with poor nutrition and unhealthy foods. This is, in fact, became such a problem that Nestle feels responsible and is taking actions to address this problem globally.
It appears that Nestle has successfully made this its primary goal. When it comes to Nestle’s developed markets, Japan is the perfect example of how this shift can be successful, specifically because it has a large number of elderly citizens.
The new service comes with an app and is gaining popularity
Since its launch, the smartphone app in question has already amassed more than 100,000 users. Which is far more than the Nestle’s executives have expected. Takaoka has big expectations for the future. He hopes that the health and nutrition program will account for around 50% of sales in Japan, with the rest being, of course, food. Nestle’s goal is to reach $900 million over the next decade.
Nestle’s wellness program in Japan has already become a business model worth observing and learning from. A number of Nestle executives from Europe and Asia are already scheduled to come to Japan and take away valuable lessons from the success of this program.
What appears to be the key to success is studying the consumers in target markets and figuring out their pain points, needs, and preferences. Nestle found that most people don’t choose their supplements in an efficient way. People are not taking into the account the nutrients their bodies lack, so they make poor supplement decisions.
This is why Nestle has developed this program that studies consumers food habits and uses the data to recommend specific supplements. This model is so versatile that it can be applied to improve consumers’ supplementation in any of the world’s markets.
Nestle wants to partner up and bring more people in
According to Takaoka, the chances for Nestle to partner up with other companies, sign up deals, or create joint-ventures is high. This is mainly because Nestle wants to grow its new wellness and nutrition division while facing completely new challenges. By using cutting-edge technologies such as AI, Nestle has left its former market and entered a completely new one, facing different competitors.
When asked if there is any science-grounded data to support the idea that there are benefits to choosing food based on genetics, in terms of maintaining health and preventing illness, Takaoka confirmed that there’s plenty. Deficiency in specific nutrients can be a cause for specific diseases. He also added that due to the stress and other various reasons our bodies may not store enough crucial elements. This is why Nestle has introduced DNA and blood tests. The results will help the consumers learn details about their health.
Takaoka is very honest about this and he states that this process can’t be completely accurate, but it’s far better than not knowing a thing about your health. For the sake of argument here is a short quote from his Tokyo interview regarding the question of the role of nutrition in disease prevention:
“In the past, people didn’t know what diseases they are at risk of – and since they didn’t know they couldn’t do anything to prevent it. But that’s something we can do now. You need a blood test to know your current health condition, and using the DNA test we can see if our risk for certain conditions is high. So if your results show the high cancer risk rates, you can take more supplements with antioxidants, like tea.”
Nestle’s new service is taking Japan by storm. The shift towards healthy drinks backed up by a powerful AI and simple to use smartphone app has proven to be a big hit in the Land of the Rising Sun. Will other Nestle branches pursue the same actions across the globe?
Who will be Nestle’s new partners in Japan? We will have to wait for the answers, but according to the current developments, it’s safe to assume that we won’t have to wait for too long.
By switching their focus to healthier snacks Nestle is reigniting the interest of Japanese consumers in their brand.
