Taking control of Pharmavite and the Nature Made brand (1989)

On going after the brand before the market

In 1989, overseas acquisitions by Japanese pharmaceutical companies were aimed almost entirely at medicines, and it was rare to buy outright a health-food company in a category that did not yet even have a market at home. Otsuka Akihiko had made internationalisation his banner, on the view that only some twenty drug makers would survive worldwide in the end; yet the partner he chose was not drug discovery but Pharmavite of California, and Nature Made. The refusal to separate medicine from consumer goods shows in the very choice of what to buy.

That said, the choice did not bear fruit at once. Nature Made went on sale in Japan four years after the acquisition, in 1993, and the domestic supplement market took nearly another decade to get properly under way. To say the acquisition set up a second pillar is possible only because we already know how widely health-consciousness would spread afterwards. A decision to pre-empt a field that has no market by taking an overseas brand whole is judged on whether the company can endure the long time it takes to grow.