No. 7: Integration of production seems to grow widespread: Meiji’s case (October 20, 2011)

Meiji Holdings will build a new plant for the production of dairy products and confectionery with an investment of more than 10 billion yen. The plant is scheduled to go into operation in 2016. The company integrated the food division in April this year, but this alone was not enough to cope with the dwindling domestic food market.

The construction of the new plant shows the company’s determination to accelerate the restructuring of the organization for effective response to dwindling birthrate and an aging population. The company plans to develop new high-value added products that utilize the accumulated technology and marketing know-how in dairy products and confectionery.

The Japanese food industry is not successful in solving problems with supply glut. Most processed foods are used for special sales events, and Japanese food companies are inferior to European food companies in the profit-earning ratio. According to the government statistics, Japan has about 19,000 food companies in 2009, only 7% drop from 1999. In contrast, the food and confectionery market decreased 1.5% to about 3,208 billion yen in 2010. Milk consumption decreased to about 30% to 580 billion yen in 2010. It is an urgent task for every food and confectionery company to find solutions to solve the demand and supply gap.