Japan’s iconic confectioner Ezaki Glico is currently focused on the snack markets in China, Thailand Southeast Asia, but it is also looking into potentially setting up a production facility in the United States to increase the popularity of its treats and high quality baby formula stateside too. President & CEO Katsuhisa Ezaki explains the company’s push to raise its international profile and reveal the health benefits of its products.
What in your view makes Ezaki Glico different to other manufacturers of confectionery, foodstuffs and health products today?
I think we are different by the way that this company was founded, and by the spirit at the heart of this company. Our first product was our caramel, which we believe was good for the body, health and good for the mind and the heart due to the ingredients within the product. At that time, Morinaga already existed and sold caramels, but their concept was completely different. Our company’s spirit is what is different from other companies. I want to contribute to society through my products and create a benefit for society. In order to do that, I needed to make products that people would actually buy. At that time, there was no marketing method, so the founder did market research on his own so that he could make products that people actually wanted to buy. Being able to make products that people wanted, we were able to contribute to society in a positive manner. I won’t comment about other companies, but I think Glico is the only company that did that at the time.
How does Ezaki Glico hope to sustain growth over the long term?
This is a really difficult question to answer. I think Glico has been able to come this far due to our spirit and our contribution to society through our products, and we hope to continue in this manner. It’s necessary for our products to have a special benefit, and these added values are truly loved by the customers. We need to keep up with this philosophy, but it’s really hard to predict the future.
When looking at the competitiveness of the industry, how does Ezaki Glico compete with the bigger and more established names of Nestlé, Meiji and Lotte, and in which ways do you aim to add value to your products?
I’ve been in this business for 40-50 years, and although sales have been growing, it’s not that big in the long run. We sell our products through distributors. There are two important points: the first one is that we need stores to sell our products, so they allow us to put our products on the shelves. And to be able to do that, our sales staff have to be able to explain the details of the product and what’s good about it, and why it’s going to sell. Many products are on the shelves, so we need the customers to choose our products, and to do that we need them to know what we are currently selling and what makes them special. Back in the day, we used to do that through newspapers and radio, but nowadays it’s through television and social networking.
In summary, it’s all about our products. Our products have to be attractive to customers, and it’s important in the way that we promote our products. There are times in which we are able to win against the products of other companies, but there are times where we are also unsuccessful as well.
Which segments do you believe hold the most potential for Ezaki Glico as the company continues on this growth path?
We have strength in all of our segments. Inside all the segments, like confectionary and ice cream, there are brands that we have to put more effort into; for example in confectionary, we have put more effort into Pretz and Pocky. It really comes down to which brands we are going to put more effort into. We can say the same about new products; we try to work on all segments, not just one segment. We want you to feel like you want to buy them, not that you have to buy them. We can survive without eating cookies and chocolate, however I want to make Glico products things that you just have to buy, that you feel are truly necessary for you. That’s the kind of marketing that we want to implement.
What focus does the company implement on the health aspect of not only its chocolates but of its product lines – especially taking into account the ageing society factor?
We want our products to contribute to the health of society. Ever since the founding of this company, we’ve had a health segment where we are trying to make our products healthy. However, when we say this, people think of medicine, and that isn’t tasty so people wouldn’t want to have (eat) that. We need our products to be tasty as well. The thing about these health products is that people have to like it and to have (eat) it; they have to be good, but they also need to have some sort of function. We need people to understand what sort of function our products have, and that these functions are good for them.
As for Glico, we have two big products: one is a type of yogurt, which helps to keep bowel conditions healthy. It is called BifiX, and is something we continue to improve and innovate. The other product is a chocolate called Libera, which contains the materials to restrain absorbing sugar and fat. These are two examples of health functions but which are also tasty.
What potential does the baby formula market hold for Glico, and with a decreasing population across Japan how are you looking to establish this product in new markets?
We want to make Glico’s baby formula something you need to buy, something you need to give to your baby. In Japan, there are only five companies making baby formula. About 15 years ago, we bought a company from the United States named SMA, which we renamed ICREO, and under that name we are now producing baby formula. When making baby formula products, we try to create products not only for babies, but also products for every member of society, in which we can support the life of humans with our products. When a baby is born it doesn’t have teeth so it can’t eat solids, that’s why they require baby formula. Glico has developed and produces instant, high quality powdered baby formulas along with other products that promote the sound growth of babies and the good health of mothers. In fact, ICREO Balance Milk has been prepared to be as close as possible to a mother's breast milk, which is the ideal source of nutrition for babies. Due to the first months being really important in a baby’s life, the product has to be really good and nutritious, a high quality formula. Eating high quality products is important not only for babies, but for people of all ages. Even though our population is shrinking, there are still babies, and there is a market for our formula. It’s our duty to produce high quality baby formula. We need to support Japanese society by having babies eat high quality products. Globally, our baby formula is selling in Vietnam, which had a big launch. We are looking to start selling our baby formula abroad to the global market.
What potential do you believe the US holds for Glico as the group continues to grow?
As for the United States, we are exporting products like Pocky from Japan and Thailand, but the business there is not so big. In terms of global business, of course the US is a really attractive and enormous market, however for now we are going to focus on principally the Chinese market, as well as Thailand and Southeast Asia. We are thinking of expanding further in the United States as well, but for that we need to improve our marketing and sales, as well as start a production facility there. We are looking into doing that, but I cannot say when – the sooner the better – but for now we will still be exporting from Japan.
How are you looking at potential partnerships or M&A to aid you in breaking into new frontiers?
A form of expansion can be organic through our own business’ growth, or through M&A – by purchasing a company in the United States. For the US, one of the ways is to go to the market, and another way is to buy your way in or create a joint venture with other manufacturers. We’re thinking that the first option is the option we want to pursue. For example, in Europe, we set up a joint venture with a local company, Mikado Sales, but our presence is still not sufficient enough. A basic add-on is a good idea if you don’t have enough capital to purchase a company.
What is the strategy behind raising further awareness about your products and growing your reputation especially in the US market?
Our products aren’t as popular as they should be yet, so one of the things we have to change is people’s awareness about Glico, about Pocky and Pretz. We are going to use a variety of platforms, like social and mass media, so that people will know and better understand our products. As I said, at this time we are only exporting from Japan and Thailand, but we need to start production facility in the United States as well.
Finally, what is the final message you would like to send to readers, especially in the US?
In the United States, there are already many different types of products, such as cookies and chocolate, but we would like the customers to understand that our products are good for the health, and also good for the heart as well. We would like them to understand the concept of our products, and to love and appreciate this concept. Pocky is already selling well, which is good, so we are confident that our other products will be loved by the wider American market as well. Please look out for us.