Japanese snack giant to invest $1bn to boost growth in China and North America
The maker of the hugely popular Harvest Snaps veggie snacks, Kappa Ebisen shrimp chips and Jagabee potato fries plans to spread the investment over the next three years to pursue growth and improve efficiency.
Around 80 billion yen (US$588m) will be spent on M&A deals to expand international operations, along with refurbishments to plants and equipment across the board. An additional 60 billion yen (US$441m) will be used to enhance productivity via automation and on environmental, social and governance measures.
Boosting recognition as a Japanese brand
Calbee is banking on a return on investment (ROI) that will see margins on its home turf improve, while advancing its presence in overseas markets. For the year ended March 2022, 23% of its revenue came from overseas markets. It is aiming lift this to between 30%-35% by 2025.
“We’ll position North America and China as key markets and boost recognition as a Japanese brand,” said COO Makoto Ehara, who is set to take over as president and CEO on 1 April 2023.
It has also targeted a return on equity of 10% or greater by fiscal 2025, expecting to return around 25 billion yen (US$184m) to shareholders.
Last month, the Tokyo-headquartered company announced plans to build a 52 billion yen (US$478m) plant in Hiroshima, with an estimated production capacity to churn out 28 billion yen (US$206m) worth of snacks annually. The facility is expected to be up and running by December 2024.
Instant hit in the aftermath of WWII
Matsuo Food Processing Co was founded by Takashi Matsuo in 1949 in a devastated post-war Hiroshimi trying to come to terms with the atomic bombing. It debuted with the Calbee caramel (a portmanteau of calcium and vitamin B1), made from mixed grains and Japanese yam starch. It was a hit among locals who were suffering from severe food shortages and the company changed its name to Calbee in 1955.
It has gone one to build a cult following for many of its snacks, both in Japan and the US.
In Japan, Calbee is as recognisable as Lay’s is to Americans. Calbee Shrimp Chips – a wheat-based snack made with shrimp launched in 1964 – are ubiquitous in the aisles of Asian supermarket as they are in their American counterparts. In fact, Americans consumed 6.7 million bags of Calbee Shrimp Chips in 2020, up from 4.4 million bags in 2014. California – which has a large Asian population – is Calbee’s biggest US market.
Tapping into consumer wants
Last month, Calbee also announced a new addition to its Harvest Snaps baked green pea snack range.
The White Cheddar variant is packed with 5g of plant protein, is a good source of fibre and contains 40% less fat than regular potato chips. The company also claims the snacks are free from six common allergies (gluten, wheat, soy, nuts, peanuts and eggs), along with artificial flavours and preservatives.
“White cheddar is a key flavour in the US snacking market and highly demanded among shoppers of all ages,” said Sandra Payer, head of marketing at Calbee America.
“Through focus groups and data research, we’re listening to consumers and it’s their wants that drive our innovations. We couldn’t be more excited to bring this must-have flavour to our core Harvest Snaps lineup.”
The new flavour is available exclusively at Target stores across the US.