Restoring order following Japan’s potato shortage boosts Calbee’s bottom line

By Gill Hyslop contact

- Last updated on GMT

Calbee has reported healthy growth in its first quarter. Pic: ©GettyImages/Pavlo_K
Calbee has reported healthy growth in its first quarter. Pic: ©GettyImages/Pavlo_K

Related tags: Calbee, Potato chips, Snacks, Breakfast cereals, Revenue growth

Calbee posted an 8.3% sales increase for Q1 2018, well above analyst expectations.

The Japanese snack giant reported net sales of ¥6.12bn ($551m) for the first three months of the fiscal year ending March 31, 2018, due to increased sales of snack foods in the domestic market.

Analysts expected the company to report ¥60.43bn ($5.43bn), an increase of 6.92% over the prior year quarter.

The company said sales of potato chips increased significantly due to the continued strong demand since sales resumed last year after a disastrous potato shortage​was caused by four typhoons in August 2016, which hit the Hokkaido region, which supplies 80% of Japan’s potatoes.

Buying frenzy

Sales of potato chips were halted for three months, sparking a buying frenzy among Japanese consumers who scrabbled to stockpile the last remaining bags of their favorite snack.

The company’s operating profit also felt the benefits of restoring order with a 69.2% increase to ¥5.7bn ($513m) due to the recovery of factory utilization that accompanied the increase of potato chip sales in Japan.

While potato chips sales enjoyed a steady growth on the domestic market, the company reported sales of flour-, corn- and bean-based snacks decreased year-on-year on the domestic market.

Home and away

Conversely, sales of overseas snack foods increased year-on-year, particularly driven by Krispy Krunchy corn-based snacks that were launched in Indonesia in March, and bean-based snacks Harvest Snaps in Australia.

Domestically, sales of cereals saw a decrease, but this was offset by ecommerce sales of Frugura breakfast cereal in China, which began in July 2017.

Calbee North America also posted improved costs due to a reduction in losses from waste.

Profit increased 78% to ¥6.2bn ($558m), while profit attributable to the owners of the company increased 84.2% to ¥4.2bn ($378m).

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