Soft Drinks and Probiotic Beverages Q2 FY2026: Suntory B&F leads

• All three companies posted higher sales. Growth was 11.6% at Suntory B&F, 3.7% at Kagome and 3.3% at Yakult. Suntory B&F's increase was 5.4% on a currency-neutral basis, showing that foreign exchange also boosted reported growth.
• Higher sales did not translate into higher profits across the group. Operating profit rose 3.0% at Suntory B&F, but fell 7.5% at Yakult and 14.5% at Kagome. Raw material, logistics and promotional costs weighed on earnings.
• In Japan, companies also faced lower volumes after price increases. Kagome sold fewer beverages, while high living costs hurt Yakult's domestic dairy products and soft drinks.
• Overseas operations supported growth. Yakult's sales rose 18.7% in the Americas and 14.4% in Asia and Oceania, as companies expanded across regions and product categories.

The strongest overall performer was Suntory B&F. Sales reached ¥899.9 billion, the highest among the three, and rose 11.6% year on year, well ahead of Kagome's 3.7% growth and Yakult's 3.3%. Operating profit increased 3.0% to ¥74 billion.
However, profit growth lagged sales growth. Operating profit excluding foreign-exchange effects fell 5.4%, as raw material and logistics costs, along with advertising and marketing expenses, weighed on earnings.
Kagome faced the toughest results. Sales grew 3.7%, but operating profit fell 14.5% and net profit dropped 24.2%. Its operating-profit decline was steeper than Yakult's 7.5% fall. Lower volumes after price increases, higher promotional spending and a weaker tomato paste market all hurt results.
Sales growth without operating profit growth was a shared challenge. Yakult's net profit rose 17.2%, helped by gains from the sale of investment securities, so it should be distinguished from the company's operating performance.

• Suntory B&F bolstered major brands including Suntory Tennensui, BOSS and Iyemon. New products and marketing investment supported sales growth. In Oceania, it began selling ready-to-drink alcoholic beverages, lifting business sales by 69.7%.
• Yakult grew overseas sales, particularly in the Americas and Asia, helping offset weakness in Japan. Its net profit increase included gains from selling securities, making operating profit a better measure of recurring earnings.
• Kagome is advancing vertical integration in Europe's tomato business through its acquisition of Silbury. It cut its profit forecast but plans an annual dividend of ¥58, up ¥10 from the previous fiscal year, putting the balance between growth investment and shareholder returns in focus.
• Yakult had the highest operating margin at 8.4%, followed by Suntory B&F at 8.2%. Kagome's margin was 6.3%. The companies report over different periods, so direct comparisons require caution.

• Rising raw material and logistics costs can erode profits even when sales increase.
• Price increases can reduce sales volumes. Continued consumer thrift could diminish the benefit of higher prices.
• Foreign-exchange movements remain a risk. Suntory B&F's currency-neutral sales growth was below its reported rate, and a shift to a stronger yen could weaken the tailwind.
• Geopolitical risks may affect overseas operations. Kagome is also exposed to developments in the Middle East.
• Competition over products and sales channels can drive up advertising and promotional costs, making margins harder to maintain.

Suntory B&F remained No. 1 in sales and operating-profit scale. But Yakult led on operating margin, at 8.4%, separating the rankings for scale and efficiency. Kagome had the lowest margin, at 6.3%, and also lowered its full-year forecast.
Scale and profitability are not the same. Beyond overseas growth and brand strength, companies' ability to manage costs and sales volumes will shape their relative performance.
Suntory B&F and Kagome reported interim results, while Yakult reported first-quarter figures. Rankings by sales and profit amount should therefore be treated as indicative, given the different reporting periods.

Those seeking overseas experience may want to look at Yakult's businesses in the Americas and Asia, or Suntory B&F's new venture in Oceania. For candidates interested in brand building and product development, the companies' efforts to strengthen core products are also worth watching.
All three face higher costs and the challenge of sustaining sales volumes. Coordination across sales, marketing, procurement and logistics is increasingly important. When evaluating employers, candidates should consider not only growth areas but also plans to improve profitability.