Japan Forsaking Rice Breakfasts Drives Calbee Yogurt Hunt

Move over rice and fish. Granola with yogurt could be the new breakfast of champions for the modern Japan.

Calbee Inc., Japan’s biggest seller of potato chips, is considering buying yogurt makers or food companies as part of its plan to diversify from its snacks-making business, Chief Executive Officer Akira Matsumoto said in an interview. The company is prepared to spend as much as 30 billion yen ($295 million) on acquisitions to add to its snacks and cereal businesses.

“Yogurt would be the best match,” Matsumoto said at the snack-maker’s Tokyo headquarters. “We could potentially do the yogurt business on our own, but we are not a yogurt maker.”

Calbee, 20 percent-owned by PepsiCo Inc., is introducing new products and expanding into more overseas markets as it sees limited room for domestic growth because of the country’s declining population. With more women joining the workforce, Japanese families have less time for traditional cooked fare such as steamed rice with fish and soup, or hand-rolled rice balls and this has prompted a shift to Western-style breakfasts which are easier to prepare, Matsumoto said.

This is a trend that Calbee, better known for its potato and shrimp chips, is keen to capture, the executive said on June 23. A lack of new products will damp Calbee’s operating profit growth this fiscal year, according to the former head of the Japan unit of Johnson & Johnson.

Slowing Growth

The growth of Calbee’s operating profit will probably slow to 14 percent in the current fiscal year from 25 percent in the year to March 2014, the company said.

Calbee could also seek partnerships as it expands its breakfast options and may borrow cash for any acquisitions, Matsumoto said. It plans to increase sales of its Furugura-branded cereal, its fastest-growing product, to 50 billion yen from 9.5 billion yen in the last fiscal year, he said, declining to give a timeframe.

Snacks such as potato chips and Kappa Ebisen, a shrimp cracker introduced in Japan in 1964, contributed to 87 percent of Calbee’s sales in its fiscal year ending March 2014, while 12 percent came from other food products such as cereals and bread.

Calbee, which is selling its products in China and Indonesia, plans to enter new markets including Russia, Spain, France, Germany, Malaysia, Vietnam and Australia, Matsumoto said. The company is talking with several companies about potential partnerships, he said.

“We are ramping up overseas expansion,” Matsumoto said. “I’m chasing after the smell of money.”

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