From ramen and tofu to Hi-Chew, Japanese food brands boost US investment
Cheap, easy-to-cook instant ramen has been a hot commodity during the coronavirus pandemic. © Reuters
HIDEKI SHINOHARA, Nikkei staff writer | Japan
TOKYO — Some of Japan’s leading food brands are putting their money where Americans’ mouths are with big investments in U.S. production.
The company behind Maruchan instant ramen, Toyo Suisan, will invest 3 billion yen ($27.3 million) by fiscal 2022 to add new lines at a Texas plant. This comes on the heels of a roughly 5 billion yen expansion there just completed in May.
Driving such capital outlays is robust U.S. consumer spending, which grew an annualized 11.9% on the quarter in the April-June period.
Instant noodles fit the bill for people seeking an easy-to-cook pandemic meal, according to market leader Toyo Suisan. “We’ve struggled to keep up with demand for some time,” a company representative said.
Toyo Suisan holds a roughly 70% share of the U.S. instant-noodle market, with its Maruchan ramen sold at Walmart and other large retailers. Low prices make it popular with students and other younger consumers.
The Texas plant also makes noodles for export to Mexico. Toyo Suisan aims to expand overseas instant-noodle sales by 9% to 102.6 billion for the year ending March 2022.
U.S. tofu production at Japan’s House Foods Group will get a boost from new lines at its Los Angeles factory. The company spent 4 billion yen to bring new capacity online there in 2020, and the new addition is expected to also cost billions.
Tofu’s appeal has spread beyond Asian cuisine to salads and other vegetarian dishes. House Foods aims to generate 18.8 billion yen in U.S. sales for the year ending March 2024, up roughly 40% from last fiscal year.
Snack maker Morinaga will expand production of Hi-Chew soft candies in such locations as North Carolina, aiming to increase U.S. sales to around 10 billion yen for the year ending March 2024 from 7.2 billion yen for the year ended March 2021.
Food companies are investing in an economy that is rebounding faster than Japan’s. U.S. real gross domestic product expanded by an annualized 6.6% on the quarter in the April-June period, according to revised data from the Commerce Department. Japan’s GDP grew 1.3% in the same quarter.
But concerns are growing about the potential economic impact in the U.S. of the coronavirus’s fast-spreading delta variant, which could pose a risk to these investments.