Meiji expands healthy chocolate production in Japan with $245m investment

By Douglas Yu contact

- Last updated on GMT

Meiji is the largest chocolate brand in Japan. Pic: Choo Chin Nian
Meiji is the largest chocolate brand in Japan. Pic: Choo Chin Nian

Related tags: Chocolate, Japan

Japanese confectionery giant Meiji is expanding production of health-focused chocolate in response to the growing consumer demand for cocoa’s purported health benefits.

Meiji said it would extend manufacturing lines at two domestic plants with an investment of around 27bn Yen ($245m).

The company, which currently produces milk chocolate, bean-to-bar THE chocolate, and chocolate Kouka Cacao 86%, is the largest player in Japan’s chocolate market with a 24.7% market share, it claims.

Chocolate alongside gummies and chewing gum make up Meiji’s confectionery business unit, which contributes 12% of Meiji’s overall sales.

In fiscal 2016, ending March 2017, Meiji’s confectionery business gained a 44.4% year-over-year increase in operating income and an 11.5% profit margin, according to the company.

Meiji Data
Pic: Meiji

“The main contributors to earnings were marked growth of chocolate products, for which we focused on ‘health and premium’ as key words, and enhanced productivity that stemmed from reducing SKUs,”​ Meiji said in its annual earnings report.

Aging population in Japan

Euromonitor said Japan’s aging population is the main reason for Meiji healthy products expansion.

“Meiji will continue to invest heavily in research and development in the forecast period, as it seeks to tailor its range of products in line with changing consumer needs. The company is likely to focus on health and wellness products within packaged food, particularly those that appeal to Japan's increasing number of elderly consumers,”​ the market data provider said.

“The company recognizes the challenges that population aging and decline pose in Japan and will thus seek to bolster packaged food profits by adding value…The company will also continue to invest in expanding its production capacity in key growth areas such as yoghurt.”

Meiji expects its chocolate sales to reach 105.5bn Yen ($956m) by the end of fiscal 2017 (ending March 2018), compared to 102.6bn Yen ($930m) a year ago.

Related topics: Business

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