Yamazaki Baking Co., Ltd. History

3-10-1, Iwamoto-cho
Tokyo 101-8585

Telephone: (81) 3-3864-3111
Fax: (81) 3-3864-3109

Public Company
Incorporated: 1948
Employees: 17,246
Sales: ¥722.84 billion ($6.1 billion) (2002)
Stock Exchanges: Tokyo
Ticker Symbol: YMZBY
NAIC: 311812 Commercial Bakeries; 311821 Cookie and Cracker Manufacturing; 722110 Full-Service Restaurants

Company Perspectives:

Since we started our motto has been, "Great taste at a reasonable price." Yamazaki Bread makes over 500 products in our 25 factories nationwide, and we deliver to approximately 79,000 outlets. It's our goal to help make our customers' lives easier and more enjoyable.

Key Dates:

Tojuro Iijima founds Yamazaki Baking Co. in Ichikawa-City, Chiba, Japan.
The company launches sales of packaged sliced bread.
Yamazaki goes public on Tokyo exchange's secondary market.
The company transfers its listing to the Tokyo main board.
A Yamazaki-Nabisco joint venture is launched.
Yamazaki opens a store in Los Angeles.
Yamazaki founds a Hong Kong subsidiary and opens its first bakery in that market.
Yamazaki enters Thailand with a new subsidiary.
Yamazaki enters the Taiwan market.
Yamazaki opens a store in Paris, France; a central factory to supply Hong Kong bakeries is built; Yamazaki opens a second store in the United States.
The company acquires Ikeda Bakery, in California (renamed as Yamazaki USA Inc.).
The company acquires the institutional bakery business of Vie de France Inc.
The company acquires the Vie de France bakeries and trade name, regrouped under the new subsidiary Vie de France Yamazaki Inc.
Yamazaki enters Malaysia with the first bakery in Kuala Lumpur.
Yamazaki enters Singapore.
The company begins converting Vie de France bakeries into a new bakery/café concept.
Restructuring restores profitability despite sales slip to ¥722 billion.

Company History:

Yamazaki Baking Co., Ltd. is Japan's leading manufacturer of bread and baked goods. The company produces a wide range of wheat breads and bread-based products, as well as Japanese-style and European-style confectioneries and cakes; cooked breads and sandwiches; rice breads and cakes; and confectioneries. Yamazaki also guarantees much of its own distribution--the company is Japan's fourth largest convenience store operator, with stores including Daily Yamazaki and Sun Shop. The company is also a major supplier of breads and bread products to the supermarket and restaurant sector. In addition to its 25 industrial bakeries, Yamazaki operates an international chain of fresh-from-the-oven bakeries (supplied with the company's frozen dough) under the Sun Moulin Yamazaki, Y Shop, and other shop names. Another strong Yamazaki operation is its Vie de France subsidiary, which produces French-style breads, including baguettes and croissants for the institutional and supermarket sectors, and also operates its own chain of 135 Japanese and 19 U.S. bakeries. Since the early 2000s, Yamazaki has been testing a new café format, and plans to convert many of its Vie de France outlets to the bakery/restaurant concept. In addition to dominating the Japanese bread market, Yamazaki has built up a strong international presence, particularly in Hong Kong, Taiwan, Thailand, and other Asian markets, including Malaysia and Singapore. The United States is the company's largest Western market, although Yamazaki operates stores in Paris and London. Yamazaki is listed on the Tokyo Stock Exchange and is led by Nobuhiro Iijima.

Founding Japan's Bread Giant in the 1950s

Yamazaki Baking Co. was founded as a bakery in 1948 in Ichikawa-City, Chiba, by Tojuro Iijima in order to produce "Western-style" bread products that became popular in Japan following World War II. Previously Japanese bread products tended to be flat, unleavened style breads; with the Allied occupation of the country following the war, however, yeast-based breads quickly became a popular food item.

A year after its founding, Yamazaki began producing candies. Demand for Yamazaki's breads and candies grew strongly, and in 1951 the company commissioned its first factory in Ryokoku. The opening of that factory enabled the company to begin selling its products in Tokyo. The following year, Yamazaki began producing cakes as well.

Yamazaki's fortunes took off in the mid-1950s with the construction of a second factory in Ichikawa-City. For this facility, the company invested in cutting-edge U.S. and European bakery and packaging equipment. The new factory enabled Yamazaki to launch a new bread segment in Japan--that of packaged sliced bread. The new product was a quick success in Japan, and by the end of the 1950s, Yamazaki had opened two more factories in Yokohama and Suginami. That latter facility also featured its own sales space, marking the company's first entry into the retail sector. In 1962, the company opened its first freestanding retail store.

In that year, Yamazaki had moved its headquarters to Tokyo. It then went public, listing on the Tokyo exchange's secondary market. By the middle of that decade, however, the company's rapid expansion enabled it to transfer its listing to the Tokyo exchange's main board in 1966. At the same time, Yamazaki listed its stock on the Osaka main board as well. In the meantime, the company had opened three more production plants, in Chiba, Musashino, and Matsudo. The company also adopted the Sun trademark, which became featured in a number of its brands and retail operations, such as Sunroyal brand launched in the late 1970s.

Yamazaki expanded throughout Japan during the 1960s. By the end of the decade it had opened a number of new factories as well, in Nagoya, Niigata, Fukuoka, Sendai, and Hamamatsu, as well as new facilities in Chiba and Osaka. The company also sought to expand its products range and in 1970 entered a joint venture with Nabisco, called Yamazaki-Nabisco, held jointly at 45 percent each, with Nichimen Jitsuyo holding the remaining 10 percent. The new operation, which came to be 80 percent controlled by Yamazaki in 1985, introduced Nabisco's line of American-style snacks, including Oreo cookies and Ritz crackers, to the Japanese market.

International Baker: 1980s-90s

Yamazaki moved deeper into the retail segment with the launch of its own convenience store chain in 1977. Called Daily Yamazaki, the new store represented a new success for the company. Over the next two decades, Yamazaki became one of the top five convenience store operators in Japan.

In the meantime, Yamazaki became interested in the international market. The large Japanese community in California brought the company to the United States in 1977, when it founded its first U.S. subsidiary and opened a store in Los Angeles.

The company's international expansion took on steam in the early 1980s, with its entry into the Hong Kong market. As in Japan in the 1950s, the Hong Kong of the early 1980s favored traditional, rice-based foods. The rise of the city's economy, coupled with growing interest in Western foods, made Hong Kong a fertile market for Yamazaki's products and the company opened its first bakery in 1981. The Yamazaki concept of fresh-from-the-oven style breads caught on quickly with Hong Kong consumers, and by the end of the decade the company's Hong Kong subsidiary had expanded to include 24 bakeries, supported by a central factory supplying frozen bread dough, opened in 1987.

Yamazaki's success in Hong Kong led the company to eye entry into other Asian markets. The company's next target became Thailand, where it launched a new subsidiary and opened its first bakery in 1984. Once again, Yamazaki's bakery concept enjoyed success, and Yamazaki built up a network of 35 bakeries in that country, as well as a central factory supplying its Thai operations. The company then moved to Taiwan, where it opened the first of a network of 16 bakeries in 1987.

In addition to its factories in Taiwan, Thailand, and Hong Kong, Yamazaki had in the meantime continued to add to its network of production plants in Japan, opening factories in Okayama, Saitama, Kumamoto, Isesaki, and elsewhere. The company also moved to further its vertical integration, adding flour milling capabilities through a joint venture, Sun Mix, in 1983. In addition, the company had taken steps to increase its technological position, entering a technical partnership with France's Grand Moulin in that same year.

Yamazaki once again looked to the United States for growth at the end of the 1980s, opening a second store near New York City in 1988 and founding Yamazaki USA Inc. In 1990, the company expanded its U.S. base with the acquisition of Ikeda Bakery, in California. That company was then renamed Yamazaki California in 1992. Meanwhile, the company made more tentative entries into other foreign markets, opening a Yamazaki retail store in France in 1988, and a new store in London in 1993.

By then, however, Yamazaki had taken a new step forward in its development. In 1991, the company reached an agreement to acquire the institutional bakery business of Vie de France Inc. Founded in 1971, that company had developed its own recipe for reproducing French-style baguettes in the United States, before adding a line of other French-style and general baked goods, including croissants in 1983. Vie de France, which went public in 1984, also had developed its own chain of some 50 bakeries across the United States.

Yet by the end of the 1990s, Vie de France had become interested in another fast-developing food market, that of gourmet "sous-vide" food preparation for the restaurant and airplane industries. As part of that effort, Vie de France chose to exit the institutional bakery market, selling that operation to Yamazaki for $40 million. Then, in 1994, Vie de France decided to sell off its retail bakery operations, by then dropped down to just 30 bakeries, to Yamazaki as well, transferring the Vie de France trademark and brand name to Yamazaki as part of that $20 million transaction.

Yamazaki, which reformed the acquired businesses as Vie de France Yamazaki Inc., quickly introduced the Vie de France concept to Japan, where it met with even stronger success than in the United States. Indeed, while the number of Vie de France bakeries dwindled in the United States, dropping down to less than 20 bakeries, in Japan the Vie de France chain grew strongly, topping 135 bakeries by the end of the 1990s.

Yamazaki's Japanese convenience store business received a boost in the mid-1990s, when it partnered in 1996 with oil company and service station operator Kosan, which was then adding convenience stores to a number of its service stations. The company also returned to its international expansion at the end of the decade, targeting Malaysia and Singapore, where it established subsidiaries and opened its first bakeries, in 1998 and 1999, respectively.

Dominance and Expansion in the Early 2000s

Yamazaki remained the dominant player in the mature Japanese bread market at the start of the new century, supported by the construction of the company's newest factory, in Saitama, in 2000. Yet heightened price competition and difficulties at the company's convenience store division were compounded by a tainted food alert, sinking the company into losses by 2001. Yamazaki quickly began restructuring, however, shedding a number of jobs--primarily by attrition--and boosting its cost efficiencies. While overall revenues continued to dip, dropping from ¥733 billion in 1999 to ¥722 billion in 2002, the company was able to restore its profitability by the beginning of 2003.

Meanwhile, the company continued building up its existing operations, particularly its Vie de France business. In 2001, the company began rolling out a new bakery/café concept, with plans to convert as many as 30 shops by the end of 2002. The company also stepped up its expansion of the Vie de France chain, forecasting a rise to some 235 shops by 2005. Yamazaki not only remained the leading Japanese bread company, but had baked itself a place among the top ten Asian prepared food companies.

Principal Subsidiaries: Sundelica Co. Ltd.; Sunmoulin Yamazaki Sdn Bhd (Malaysia); Sunmoulin Yamazaki Singapore Pte Ltd.; Thai Yamazaki Co. Ltd.; Vie de France Yamazaki Inc. (U.S.A.); Yamazaki California Inc.; Yamazaki Engineering Co. Ltd.; Yamazaki France SA; Yamazaki UK Ltd.; Yamazaki USA Inc.

Principal Competitors: Japan Tobacco Inc.; Yuasa Funashoku Company Ltd.; Warabeya Nichiyo Company Ltd.; First Baking Company Ltd.; Tokatsu Foods Company Ltd.; Nakamuraya Company Ltd.; Rock Field Company Ltd.; Nichiryo Baking Company Ltd.

Further Reading:

  • "Bakers Shift to High Quality Bread to Slice More Dough from Market," Nikkei Weekly, July 1, 1989, p. 12.
  • Goto, Takuhiko, "Yamazaki Seeks Big Slice of HK Bread Market," Nikkei Weekly, July 2, 1988, p. 7.
  • "Japan's Yamazaki Baking Posts US$380 MLN Group Net Loss," Asia Pulse, February 26, 2001.
  • "Vie de France Bakery Shops Evolving into Cafes," Japan Food Services Journal, December 25, 2001.
  • "Yamazaki to Open Bakery in U.S.," Nikkei Weekly, August 27, 1988, p. 21.

Source: International Directory of Company Histories, Vol. 58. St. James Press, 2004.