By Ayai Tomisawa
TOKYO Mon May 26, 2014 6:36pm EDT
1 of 3. Kosuke Mori, a three-month-old baby, is fed by his mother as Satoru Saito (not pictured), general manager of Pigeon Corp's R&D centre, conducts a research on how babies drink milk, at Pigeon's facility in Tsukubamirai, Ibaraki prefecture April 4, 2014.
Credit: Reuters/Toru Hanai
<span id="articleText"><span id="midArticle_start"/> TOKYO (Reuters) - In a quiet side-room at Pigeon Corp's spacious R&D facility north of Tokyo, researchers are on a high-tech quest - to perfect a baby's bottle teat that replicates a breastfeeding mother's nipple.
<span id="midArticle_1"/> Pigeon, founded almost 60 years ago, sells about 100 million bottle teats a year and has a more than 80 percent share of the Japanese market. As the country's birth rate declines, the company has moved overseas and ex-Japan sales will this year for the first time account for more than half its total revenue.
<span id="midArticle_2"/> Its main target market is China, where parents aspire to quality Japanese bottles to feed their babies. Pigeon, which has a workforce of close to 3,500, hopes to have 50 percent share of the baby bottle teat market in all major international markets by around 2020, according to a note by Shared Research.
<span id="midArticle_3"/> At its 15,400 square meter (165,800 sq ft) facility at Tsukubamirai, some of the more than 100 researchers involved in product development place ultrasound devices under suckling babies' chins to monitor how their tongues move.
<span id="midArticle_4"/> That's a step forward from when they used to place cameras under the bottles to monitor how babies drink milk, and a giant leap from the company's founder's research methods.
<span id="midArticle_5"/> In a Japan recovering from World War II, Yuichi Nakata spent six years traveling around the country asking lactating mothers if he could drink from their breasts. He sometimes offered to pay, and is said to have drunk the breast milk of around 1,000 women - from hostesses to total strangers - to learn more about their nipples.
<span id="midArticle_6"/> "My grandfather was even slapped by women after he made the proposal," said Yusuke Nakata, the late founder's grandson who is now managing director at Pigeon's Singapore office. "Our final goal is to make a teat as close as possible to a real mother's nipples."
<span id="midArticle_7"/><span id="midArticle_8"/><span id="midArticle_9"/> NATURAL REFLEX
<span id="midArticle_10"/> Pigeon today has 200 mother and baby paid volunteers who take part in the research.
<span id="midArticle_11"/> "Babies can't tell us if they're comfortable with the bottles. For babies who can't drink from the bottle well, we can't ask what's bothering them, so we came up with using ultrasound devices," Nakata said.
<span id="midArticle_12"/> Babies are born with a natural reflex to help them find and latch on to the mother's nipple which, when it touches the roof of the baby's mouth, triggers rhythmical cycles of sucking - called the peristaltic movement - in which the tongue compresses the nipple.
<span id="midArticle_13"/> While the World Health Organization promotes breastfeeding as the best source of infant nourishment, many mothers opt for bottle-feeding for a variety of reasons.
<span id="midArticle_14"/> "When a difficult baby drinks using our prototype teats, we're thrilled," said Satoru Saito, who has worked at Pigeon's R&D center for 17 years and is now general manager.
<span id="midArticle_15"/> Pigeon's first teat was made from rubber, but these tended to crack easily and have now been replaced by softer, stretchable silicon-made teats.
<span id="midArticle_0"/> Teats and baby bottles account for around a quarter of Pigeon's business.
<span id="midArticle_1"/><span id="midArticle_2"/> A PIGEON OF PEACE
<span id="midArticle_3"/> Reminiscing about how the company started, Nakata, 42, says his grandfather wanted to be in a business that made the world a more peaceful place after the war.
<span id="midArticle_4"/> Yuichi worked in a department store and on an apple farm in Manchuria, before being shipped off to Siberia in 1947 by the Soviet Union. A year later, he returned to Japan and met a Chinese businessman who started a firm selling baby bottles.
<span id="midArticle_5"/> "The Chinese partner left as sales struggled, but my grandfather stayed, convinced there would be strong demand for baby bottles," Yusuke Nakata said. "Japan was trying to recover from the war-time devastation, and he thought there would be more women in the workforce in the future."
<span id="midArticle_6"/> Meaning to call his company "Dove" because of its association with peace, he mistranslated the Japanese word, and Pigeon has stuck to this day.
<span id="midArticle_7"/> Recognizing the importance of product development, Nakata recalled how his grandfather's product manager was one of the few Japanese to own a car at the time. "He thought a manufacturer can make money only when it has goods ready to sell, so the product management's key person got special treatment."
<span id="midArticle_8"/><span id="midArticle_9"/> CHINA DRIVER
<span id="midArticle_10"/> Valued at more than $1.8 billion, Pigeon had sales of 77.47 billion yen ($762 million) in the year to end-January, with operating profit jumping more than 46 percent to 10.37 billion yen. Overseas sales were 38.54 billion yen, with around 60 percent of those in China, where Pigeon's high-margin baby and health products compete against the NUK brand of Germany's Mapa GmbH and Philips Avent.
<span id="midArticle_11"/> Current year operating profit is likely to increase more than 15 percent, according to analysts surveyed by Thomson Reuters. The company expects profit to rise almost 12 percent.
<span id="midArticle_12"/> Pigeon is almost 50 percent foreign-owned, in a country where average foreign ownership is just 28 percent. Its share price has tripled over the last two years, but foreign investors say they're keen to hold the stock for the long term.
<span id="midArticle_13"/> "The China business has been the driver, with margins higher than in Japan, and where new products like diapers have been introduced," said Kabir Goyal, equity analyst at Wasatch Advisors in Salk Lake City, which owns close to 3 percent of Pigeon.
<span id="midArticle_14"/> "Going forward, we're excited to see Pigeon aggressively enter new markets, such as the United States, Europe and India," he said.
<span id="midArticle_15"/> ($1 = 101.6650 Japanese Yen)
<span id="midArticle_0"/><span id="midArticle_1"/> (Editing by Ian Geoghegan)
<span id="midArticle_2"/>
TOKYO Mon May 26, 2014 6:36pm EDT
1 of 3. Kosuke Mori, a three-month-old baby, is fed by his mother as Satoru Saito (not pictured), general manager of Pigeon Corp's R&D centre, conducts a research on how babies drink milk, at Pigeon's facility in Tsukubamirai, Ibaraki prefecture April 4, 2014.
Credit: Reuters/Toru Hanai
<span id="articleText"><span id="midArticle_start"/> TOKYO (Reuters) - In a quiet side-room at Pigeon Corp's spacious R&D facility north of Tokyo, researchers are on a high-tech quest - to perfect a baby's bottle teat that replicates a breastfeeding mother's nipple.
<span id="midArticle_1"/> Pigeon, founded almost 60 years ago, sells about 100 million bottle teats a year and has a more than 80 percent share of the Japanese market. As the country's birth rate declines, the company has moved overseas and ex-Japan sales will this year for the first time account for more than half its total revenue.
<span id="midArticle_2"/> Its main target market is China, where parents aspire to quality Japanese bottles to feed their babies. Pigeon, which has a workforce of close to 3,500, hopes to have 50 percent share of the baby bottle teat market in all major international markets by around 2020, according to a note by Shared Research.
<span id="midArticle_3"/> At its 15,400 square meter (165,800 sq ft) facility at Tsukubamirai, some of the more than 100 researchers involved in product development place ultrasound devices under suckling babies' chins to monitor how their tongues move.
<span id="midArticle_4"/> That's a step forward from when they used to place cameras under the bottles to monitor how babies drink milk, and a giant leap from the company's founder's research methods.
<span id="midArticle_5"/> In a Japan recovering from World War II, Yuichi Nakata spent six years traveling around the country asking lactating mothers if he could drink from their breasts. He sometimes offered to pay, and is said to have drunk the breast milk of around 1,000 women - from hostesses to total strangers - to learn more about their nipples.
<span id="midArticle_6"/> "My grandfather was even slapped by women after he made the proposal," said Yusuke Nakata, the late founder's grandson who is now managing director at Pigeon's Singapore office. "Our final goal is to make a teat as close as possible to a real mother's nipples."
<span id="midArticle_7"/><span id="midArticle_8"/><span id="midArticle_9"/> NATURAL REFLEX
<span id="midArticle_10"/> Pigeon today has 200 mother and baby paid volunteers who take part in the research.
<span id="midArticle_11"/> "Babies can't tell us if they're comfortable with the bottles. For babies who can't drink from the bottle well, we can't ask what's bothering them, so we came up with using ultrasound devices," Nakata said.
<span id="midArticle_12"/> Babies are born with a natural reflex to help them find and latch on to the mother's nipple which, when it touches the roof of the baby's mouth, triggers rhythmical cycles of sucking - called the peristaltic movement - in which the tongue compresses the nipple.
<span id="midArticle_13"/> While the World Health Organization promotes breastfeeding as the best source of infant nourishment, many mothers opt for bottle-feeding for a variety of reasons.
<span id="midArticle_14"/> "When a difficult baby drinks using our prototype teats, we're thrilled," said Satoru Saito, who has worked at Pigeon's R&D center for 17 years and is now general manager.
<span id="midArticle_15"/> Pigeon's first teat was made from rubber, but these tended to crack easily and have now been replaced by softer, stretchable silicon-made teats.
<span id="midArticle_0"/> Teats and baby bottles account for around a quarter of Pigeon's business.
<span id="midArticle_1"/><span id="midArticle_2"/> A PIGEON OF PEACE
<span id="midArticle_3"/> Reminiscing about how the company started, Nakata, 42, says his grandfather wanted to be in a business that made the world a more peaceful place after the war.
<span id="midArticle_4"/> Yuichi worked in a department store and on an apple farm in Manchuria, before being shipped off to Siberia in 1947 by the Soviet Union. A year later, he returned to Japan and met a Chinese businessman who started a firm selling baby bottles.
<span id="midArticle_5"/> "The Chinese partner left as sales struggled, but my grandfather stayed, convinced there would be strong demand for baby bottles," Yusuke Nakata said. "Japan was trying to recover from the war-time devastation, and he thought there would be more women in the workforce in the future."
<span id="midArticle_6"/> Meaning to call his company "Dove" because of its association with peace, he mistranslated the Japanese word, and Pigeon has stuck to this day.
<span id="midArticle_7"/> Recognizing the importance of product development, Nakata recalled how his grandfather's product manager was one of the few Japanese to own a car at the time. "He thought a manufacturer can make money only when it has goods ready to sell, so the product management's key person got special treatment."
<span id="midArticle_8"/><span id="midArticle_9"/> CHINA DRIVER
<span id="midArticle_10"/> Valued at more than $1.8 billion, Pigeon had sales of 77.47 billion yen ($762 million) in the year to end-January, with operating profit jumping more than 46 percent to 10.37 billion yen. Overseas sales were 38.54 billion yen, with around 60 percent of those in China, where Pigeon's high-margin baby and health products compete against the NUK brand of Germany's Mapa GmbH and Philips Avent.
<span id="midArticle_11"/> Current year operating profit is likely to increase more than 15 percent, according to analysts surveyed by Thomson Reuters. The company expects profit to rise almost 12 percent.
<span id="midArticle_12"/> Pigeon is almost 50 percent foreign-owned, in a country where average foreign ownership is just 28 percent. Its share price has tripled over the last two years, but foreign investors say they're keen to hold the stock for the long term.
<span id="midArticle_13"/> "The China business has been the driver, with margins higher than in Japan, and where new products like diapers have been introduced," said Kabir Goyal, equity analyst at Wasatch Advisors in Salk Lake City, which owns close to 3 percent of Pigeon.
<span id="midArticle_14"/> "Going forward, we're excited to see Pigeon aggressively enter new markets, such as the United States, Europe and India," he said.
<span id="midArticle_15"/> ($1 = 101.6650 Japanese Yen)
<span id="midArticle_0"/><span id="midArticle_1"/> (Editing by Ian Geoghegan)
<span id="midArticle_2"/>
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