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Attacking the US before Toyota… Japanese soy sauce company Tenbagger

In the 1980s, Americans were terrified of the ‘Japanese air raids’. Japanese companies such as Toyota, Honda, Matsushita, and Sony have entered the Hollywood film industry beyond the automobile and electronics industries. However, they are not the ones who help Japanese companies advance into the US. Kikkoman, a soy sauce company, started marketing in the United States in the 1950s, and established a local factory in 1973.

It succeeded in transforming the soy sauce business that started in the Edo period into a large-scale business targeting the United States and people around the world. The stock price of Kikko Bay, which entered the US market faster than Toyota, has risen more than 10 times in the past 10 years. It is the result of constantly ‘setting’ products that fit new food trends beyond globalization and localization. It is also the reason why the investment in soy sauce companies returned to the fruits of Tenbagger after 10 years.

Kikkoman (stock number 2801) closed at 9,380 yen at the Tokyo Stock Exchange on the 7th. On the 29th of last month, Kikkoman recorded an all-time high of over 10,000 yen (10,140 yen) for the first time. Kikkoman’s stock price has increased tenfold in the 10 years since 2012. During the same period, the Nikkei 225 index tripled. Kikkoman is ranked 91st in the Japanese stock market with a market capitalization of 1.81 trillion yen.

When the Japanese soy sauce market stagnated in the 1950s, Kikkoman turned to overseas markets. It was inspired by Americans who came to Japan after World War II to enjoy dishes seasoned with soy sauce. Kikkoman advertised soy sauce as a seasoning that can be used anywhere. In particular, he emphasized that it goes well with steak. Americans called teriyaki grilled meat marinated in soy sauce at barbeque parties. Teriyaki sauce became a hit. The popularization of sushi also accelerated the growth of Kikko Bay. Kikko’s soy sauce bottle has risen to the position of the most successful industrial design product along with the Coca-Cola bottle. After 2012, it launched the ‘Always Fresh’ series that emphasized eco-friendliness and super freshness that do not use genetically modified foods, greatly increasing sales in the US and European markets.

Kikko’s overseas sales accounted for 65% (as of the end of March last year). About 30% of this comes from soy sauce. Kikkoman’s soy sauce grew at an average annual rate of 7.3% in overseas markets from 1974 to 2020. Kikkoman seems to have achieved record-high profits for the ninth consecutive year until last year (April 2021 to March 2022). Last year, sales were estimated at 493.8 billion yen and operating profit was 48.2 billion yen.

‘Kikkoman Soy Sauce’ captivated the US
Sales growth by targeting the European market

Attacking the US before Toyota... Becomes 'Tenbagger', a Japanese soy sauce company

An American supermarket in the late 1950s. Yuzaburo Mogi, who was a college student (honorary president of Kikko Bay), works part-time, grilling meat seasoned with soy sauce. After tasting his grilled steak, Americans soon headed to the checkout, grabbing the soy sauce bottle next to them one by one. For Americans who used to eat steak with salt, soy sauce-flavored meat was fresh.

As Mogi thought, Kikko’s soy sauce has developed into teriyaki sauce, etc., and has grown into a business that currently generates more than 200 billion yen in sales in North America alone.

When the Japanese soy sauce market fell into a stagnant state in the 1950s, Kikkoman turned to overseas markets. Kikkoman advertised, emphasizing that soy sauce is not only used for Japanese cuisine, but as a seasoning that can be used anywhere. Creating a tasting corner in a supermarket to promote soy sauce was a hit. Since then, Kikkoman has continued its success formula by offering dishes that can be combined with soy sauce and other sauces.

What makes Kikko unique is that it is a family-run company. Kikko Bay is the predecessor of a company that was founded 100 years ago by eight brewing families that made soy sauce during the Edo period. The current president, Noriaki Horikiri, is the 13th generation of eight families.

However, there is an ambiguity. Only one person per family is allowed to join Kikko Bay per generation, and they did not guarantee executives because they came from a founding family. Each family hires talented people who can become ‘presidents’, and among them, only those who have been nominated by the nominating committee through competition can rise to the position of president. Because of this, there may be a president who is not from a startup family, and in fact, two of the past presidents did not come from a startup family. It is said that the presidents of Kikko Bay, who have gone through competition, are excellent talents. Even Yuzabu Mogi, the honorary chairman and former president of Kikko Bay, is the first Japanese to obtain a Master of Business Administration (MBA) in the United States.

Even in the stock market, Kikko Bay has ample growth potential. 70% of overseas sales come from North America, as Kikko’s soy sauce has begun to penetrate European tables as well. The European market accounts for only 12% of overseas sales. If the European market shows as much growth as the US market, it is calculated that earnings growth is more possible. The raw material burden can also be offset by raising soy sauce prices for the first time in 14 years. Mitsubishi UFJ Morgan Stanley said, “Kikko’s soy sauce has started to sell even more to European households due to the ‘home away from home’ caused by COVID-19. he explained.

Correspondent Lee Seul-gi/Tokyo = Correspondent Young-hyo Jeong surugi@hankyung.com

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