Beauty from the inside out: Kirin and FANCL to develop new beauty products after stake purchase

By Amanda Lim contact

- Last updated on GMT

Kirin and FANCL plan to work together to develop cosmetic products.
Kirin and FANCL plan to work together to develop cosmetic products.
Kirin and FANCL plan to work together to develop cosmetic products that focus on internal as well as external beauty, such as probiotic beauty products.

The Japanese beverage company announced on August 6 that it was 30.3% stake in cosmetics maker FANCL for JPY129.3bn ($1.22bn).

The shares were acquired from FANCL's founder and chairman, Kenji Ikemori and his relatives.

The transaction is set to close September 6 this year. The deal will see FANCL become an equity-method affiliated company of Kirin, which will hold 33% of the voting rights.

Kirin spokesperson Toshiaki Hyoudou told CosmeticsDesign-Asia ​that Kirin and FANCL were aligned in their focus on supporting the health and well-being of its consumers. “FANCL aims for growth by solving social issues related to health and this direction is completely in line with Kirin.”

“FANCL is characterised by its proposal of ‘internal and external beauty’ and advocates that it will be healthy and beautiful from both external and internal perspectives through cosmetics and supplements.”

Last year, FANCL’s recorded sales of JPY122.4bn. Cosmetics, which consists of brands such as FANCL and ATTENIR, takes up 58% of the business while its nutritional supplement segment makes up 36%.

Hyoudou added that the companies will work together to provide synergistic support for beauty and health” ​for consumers by developing new products and services that leverage both companies' brands and technologies, original materials, and health development capabilities.

This would include skin care, make-up and hair care products as well as supplements and meals, he said.

Additionally, Hyoudou said the companies planned to work together on skin care and ageing care research to “realise skin health​” from inside and out.

Probiotic potentials

According to Hyoudou, one of Kirin’s plans was to develop probiotic beauty products with FANCL.

“We would like to develop products that take advantage of the unique materials and raw materials of both companies. Kirin possesses fermentation expertise, yeast technology, and lactic acid bacterium and plans to develop beauty ingredients using these.”

During Kirin’s second-quarter financial briefing, CEO Yosinori Isozaki explained that Kirin had the Lactococcus lactis strain Plasma.

“FANCL’s cosmetics are rather to treat the health of skin. In this sense, Kirin also has Lactococcus lactis strain Plasma, which is expected to improve skin-barrier functions…”

He added that there are currently no detailed plans in the works now, but the companies plan to work together from development down to marketing strategy.

Synergy between companies

Isozaki believes there is plenty of opportunities for synergy between the two companies because the businesses have little overlap.

“For example, Kyowa Hakko Bio's customers are mostly male and seniors, while FANCL’s has a wide range of customers including female. We have the potential to expand our customer base by putting our ingredients on their [e-commerce platforms] Our own vending machines will be able to sell products in the healthcare domain. FANCL also owns direct sale stores, which we do not.”

He added that the two companies will help each other accelerate overseas expansion as well.

“FANCL has strengths in China and Kirin in South East Asia. We believe there is a potential to mutually utilise overseas footprints.”

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