YUZABURO MOGI
Chairman and CEO
Kikkoman Corporation
Many Japanese companies were forced to downsize overseas operations following the financial crisis, but at Kikkoman Corporation the future remains firmly tied to global markets.
Overseas markets are increasingly important for the leading Japanese soy sauce maker, which shifted to a holding company structure in October 2009 to support its growth strategy. Kikkoman anticipates further growth in the U.S. market and continued double-digit growth in Europe, while planning ahead in China.
Markets outside Japan account for 30% of total business and about 60% of operating profits. The U.S. alone generates approximately 80% of overseas sales, and more than three-quarters of overseas operating profits.
“Without international expansion, a major part of our sales and operating profits would have evaporated,” says Yuzaburo Mogi, Chairman and CEO of Kikkoman.
The 92-year-old company is no newcomer to America, having operated in the U.S. since 1957. The company introduced soy sauce to U.S. consumers and was also among the first Japanese companies to build a U.S. plant when it opened its Walworth, Wisconsin, factory in 1973.
The combination of those experiences and the in-depth knowledge the company has built up in the U.S. market will keep Kikkoman on the road to further growth.
“I think the soy sauce business in America will be firm,” Mogi says.
Following the pattern seen in the U.S., where consumers were attracted to the savory taste, Europeans have also started using soy sauce in daily dishes, and Kikkoman is set for another year of double-digit growth in the region.
China is also an important market for Kikkoman. The company has been a partner with a Shanghai-based joint venture since 2000, launched a second venture in the Beijing and Tianjin areas in 2009, and plans to promote its products at the Shanghai Expo in 2010.
“Staying healthy has two meanings. One is to
promote personal happiness, and the other is the
contribution health makes towards society.”
But despite ongoing economic growth, Chinese consumers still have lower disposable income compared to shoppers in other industrialized nations, and Mogi is prepared to wait five to ten years for sales to take off.
“In China, Kikkoman soy sauce is very expensive, some four to five times higher than the local soy sauce sold in supermarkets,” he says. “We will wait until incomes increase so that Chinese consumers can buy our products.”
Apart from a shrinking market as a result of lower birth rates, Kikkoman also faces challenges in its home market from more picky consumers, who are gravitating towards cheaper private labels.
“Japanese consumers have become more price conscious,” Mogi says.
Soy sauce has traditionally been sold in one-liter containers, but Kikkoman has answered the needs of choosy shoppers with a smaller, lower-priced 750-milliliter container, which also helps keep the soy sauce fresh.
Increased health awareness has also helped Kikkoman maintain its position as Japan’s leading soy milk manufacturer, and Mogi predicts firm sales in 2010.
Fostering health is a core company mission, and 74-year-old Mogi practices what he preaches. Rising at 5:30 each morning, he walks more than half an hour in all weather—short of typhoons and blizzards.
“Staying healthy has two meanings,” says Mogi. “One is to promote personal happiness, and the other is the contribution health makes towards society.
“More people should become health conscious,” he adds.
