In recent years, people who often visit bakeries may have noticed that the kraft paper flour bags placed in the store are not printed with the familiar Chinese characters, but English or Hiragana. Below it is marked "日清製粉グループ (Nisshin Seifun Group)" in Japanese characters. The price of flour in Japan is often several times higher than that in Taiwan. What is the charm that attracts many Taiwanese bakery operators to use it?
The demand is greatly reduced, and the number of companies is avalanche! Japan's flour market is in deep recession, and traditional manufacturers are forced to transform to save themselves
In fact, the Japanese flour market has already entered a period of irreversible decline. Without a differentiated strategy at the right time, Nisshin Seifun Group would have difficulty reaching today's scale. Judging from the demand for raw material wheat in the Japanese flour market, it has dropped from 7.16 million tons in 2012 to 6.46 million tons in 2022, a decrease of about 10%; the number of Japanese flour milling companies has also dropped from 129 in 1998. It dropped sharply to 63 in 2021, a decrease of about 50%.
Reduced consumption has led to a shrinking market, and flour manufacturers must find ways to reduce costs, such as investing in large-scale production equipment to improve efficiency, diversifying their business, or increasing the added value of their products, in order to survive in the competition.
Strategy 1: Acquire overseas manufacturers to master the main wheat producing countries
The decline in wheat demand is closely related to demographic changes. After reaching a peak of 127 million in 2004, Japan's population has dropped to 123 million in 2024, a decrease of 3.87 million, even exceeding the population of Taipei City. It is estimated that by 2050, the number will fall below 100 million, leaving only 95.15 million people, a decrease of 25%.
As early as 2000, Nisshin Seifun Group was aware of the potential impact of population decline and began to actively expand overseas markets. In 1989, Nisshin Seifun Group acquired Rogers Foods, a Canadian flour manufacturer, becoming the first Japanese flour company to expand overseas. Later, it acquired the American flour manufacturer Miller Milling in 2012 and the Australian flour manufacturer Allied Pinnacle in 2019.
Currently, Nisshin Seifun Group's daily flour production capacity in Japan is 8,100 tons, but its overseas daily production capacity has reached 12,160 tons, 1.5 times more than Japan. Although the Japanese market continues to shrink, through its overseas presence, Nisshin Seifun Group has been able to quickly establish a foundation to enter a larger market, and combine flour produced in various countries to provide global customers with more diversified and high value-added products.
In addition, the acquired flour mills are all located in the main source countries of Nisshin Seifun Group's milling wheat: Canada, the United States and Australia. Owning local flour mills not only makes up for the shrinking Japanese market, but also helps Nisshin Seifun Group establish close relationships with local wheat suppliers, control the supply of raw materials in the world, and extend its reach to the front lines of production areas.
Strategy 2: Split the business into independent companies and build 4 major business units
Faced with the potential problem of shrinking Japan's flour market, Nisshin Seifun Group not only actively deployed overseas before 2000, but also committed to developing multi-field related businesses based on the flour industry. include:
- Processed food business: produces dry pasta, ready-mixed powder, etc., with a market share of 59% in fried noodles and 45% in dry pasta.
- Health food business: Produces probiotics and other products, and its sales volume of Bifidobacterium probiotics (ビフィズス益生菌) has exceeded 4 million bags.
- Chinese food and Side dish business: provides rice, frozen food, etc. for convenience store lunch boxes. It has 25 production bases across Japan, covering rice, prepared bread, prepared noodles, side dishes and other products.
- Engineering consulting business: Utilizing the factory operation knowledge accumulated from building factories and using equipment, we provide engineering consulting services and have signed more than 3,000 consulting business contracts.
The reason why these businesses can flourish is closely related to Nisshin Seifun Group's dismantling of its businesses into independent companies in 2001. Although business entities under the same company can share resources, they are easily limited by the company's overall strategy and their development is hindered. After independence, each business entity can focus on its own development and respond to the ever-changing market more flexibly and quickly.
Strategy 3: Improve R&D and innovation to increase product added value
In addition to exploring foreign markets and diversifying businesses, improving the added value of products is also an important direction. Many manufacturers are committed to developing high value-added products, but it is not easy to make products that are easy to understand and meet customer needs.
Take pasta for example. Because it is dried and pressed in a mold, it takes longer to cook than ramen or udon noodles that are not dried. Generally, noodles only take 3 to 4 minutes. Even if pasta takes twice as long, for a restaurant, if it takes 4 minutes more to make 15 portions of pasta, the meal delivery time will be delayed by 1 hour. If the cooking time can be shortened, it will be an attractive added value.
In order to solve this problem, Nisshin Seifun Group developed the "MaMa Quick Boiled Spaghetti Fine Fast (マ・マー 早ゆでスパゲティ FineFast)" pasta with a cross-section similar to an electric fan. By cutting V-shaped slits on the surface of the noodles, boiling water can more easily penetrate into the center of the noodles and speed up cooking.
This concept was first commercialized in 1986. At that time, the noodles had only one V-shaped cut. In 2011, it evolved to three V-shaped cuts, and in 2022, it developed to four V-shaped cuts, which shortened the cooking time by more than half compared with the initial stage. Since 1986, this pasta has been upgraded six times. This spirit of continuous product improvement is rare in the food industry, and it also creates a high degree of customer stickiness to the product.
The seemingly declining dusk market has turned out to be an opportunity for the transformation of traditional industries. The products of Taiwanese flour mills are constantly improving, and as Japan is facing the same social structure of declining birthrate, it may follow Japan's experience to develop a more diversified flour business and create higher industrial value.
