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Introduction:Having experienced the ups and downs of the Japanese economy, Meiji Kogyo successfully practiced the "survival of the fittest" in adversity.

Jin Mei | Author: Lishi Business Review | Produced by

As the largest dairy company in Japan, Meiji Dairy was founded in 1916 and has a history of more than 100 years. It has experienced the rise and fall of Japan.

From the depression of World War I to the explosive growth after World War II, from the handmade era to leading the Japanese food industry into the industrial revolution, from a small "copycat" food factory to a group enterprise with snacks, chocolate, milk, pharmaceuticals, etc., from product-oriented to the marketing and channel revolution after the 1970s, from a strong player rising in the market to a fit player that can continue to move forward in the cold winter...

The history of the Meiji era is also a microcosm of the wonderful history of Japan's consumption evolution.

1

Explosive Growth

During the Meiji era (1868-1912), Japan was transforming from a feudal society to a modern country, and Western snacks and snack manufacturing technology flooded into Japan along with Western political, military, economic, and cultural trends.

In the middle of the Meiji era, Taichiro Morinaga pioneered the large-scale production and sales of Japanese candies and founded Morinaga Confectionery in 1899. Inspired by him, in 1916, Hanji Soma founded Tokyo Confectionery Co., Ltd. (the predecessor of Meiji Co., Ltd., hereinafter referred to as Meiji).

At that time, during the First World War, Japan was in a shortage of supplies. In addition, the war restricted global trade, and Western-style candies became a rare commodity in Japan. Meiji's candies were an instant success and in short supply, and Meiji's biscuit products were soon launched.

The Japanese market was barren at the time, and Meiji had to do a very simple thing: just pick the best-selling products in the Western market and copy them. With the successful experience, Meiji began to expand into a new field - dairy products.

In the 18th and 19th centuries, under the wave of industrialization, milk in Western countries began to be produced on a large scale and commercially, becoming an important food and source of nutrition and calcium for urban residents and rural areas. After the Meiji Restoration, the trend of Western breeding and agricultural modernization blew into Japan, and Japanese dairy products began to expand their scale through mergers and build modern supply chains, and Meiji milk products came into being.

In 1921, Meiji Meili condensed milk was launched. At that time, Japan was in a state of extreme food shortage, and condensed milk naturally became a consumer product for the upper class, which was not affordable for everyone. So Meiji changed its thinking and promoted it as a formula milk food for babies and patients, thus finding the precise social demand.

In 1922, Meiji established a scientific research institute to develop new products. Chocolate was becoming popular in Japan at that time, and facing the hungry Japanese market, Meiji needed to have sufficient ammunition to outperform its competitors. Meiji imported top chocolate manufacturing equipment from Germany and invited German chocolate manufacturers to provide production technology guidance.

Once Meiji's modern equipment was turned on, other chocolate manufacturers in the market instantly became antiques of the past era.The ubiquitous Meiji chocolate has even made Meiji synonymous with chocolate in Japan.

In 1928, after Japan mandated pasteurization of milk, Meiji received regulatory approval to produce milk and built a pasteurization plant. In 1932, Meiji became the first company to have the rights to sell Patrogen, a domestically produced formula milk.

Meiji gradually changed from a snack manufacturer to a company with the goal of "creating a better quality of life for people and communities through good nutrition." This also laid the foundation for Meiji to produce penicillin and operate a pharmaceutical business in the 1940s, and to develop health foods in the 1970s.

In 1945, Meiji's factory was attacked by air raids and production was temporarily halted. The following year, they rebuilt the production line and launched "Pino" chewing gum. This product, which has been popular in Europe and the United States for more than ten years, quickly captured the taste buds of the Japanese. This small chewing gum opened the era of Meiji's true popularization.

After World War II, with the support of the United States, Japan quickly entered the stage of mass consumption from the mature stage of industrialization in less than 20 years. The income of Japanese people increased several times during this period. 90% of Japanese people considered themselves to be middle class. The once upper-class consumption began to spread to the whole society, and Meiji products began to enter thousands of households.

In 1950, with the successful development of the continuous fermentation equipment for fermented milk, Meiji achieved industrial mass production of dairy products at a relatively low cost, and Japan welcomed the pioneering product of popular yogurt.Low costs and gradually mature sales channels have become Meiji's deep moat.

In 1957, as people's income increased, Meiji increased the milk solids content in milk and made a nutritionally luxurious version of yogurt - Meiji GOLD Milk, which was known as the "King of Milk" in Japan at the time.

As Japan's economy took off, Meiji's milk business experienced explosive growth along with the Japanese economy. By 1970, market competition intensified, the explosive growth of products gradually came to an end, and the market that was in short supply quietly changed. With more choices, users began to buy products instead of gimmicks and added value, and commercial competition quietly changed from a product battle to a channel and marketing battle.

In 1970, Meiji launched Bulgarian yogurt at the Osaka World Expo. In addition to the exotic flavor that Chinese people had never tasted before,Bulgarian yogurt, like Yuanqi Forest in China today, became a new hot channel through convenience stores and vending machines in Japan in the 1970s-1990s. Together with products such as Kirin Beer, it became popular in Japan and became Japan's "national yogurt."

After Japan lifted trade restrictions on confectionery and food in 1971, Meiji began looking outward for markets through partnerships with confectionery manufacturers in Asia and Europe.

Meiji's market competition entered a new era.

2

Traffic Player

Meiji has continued to expand its product lineup in every era and has introduced its products into more and more markets, making them flourish everywhere.

Through its food and dairy businesses, Meiji had built up expertise in lactose production, which it then used to make penicillin, and the group began researching penicillin production in the 1940s. In 1958, Meiji Kanamycin became Japan's first domestically produced antibiotic and began to be exported. In a field with high demand, it was inevitable that products would flourish. By 1966, Meiji Kanamycin had become Japan's most exported pharmaceutical product.

But what is even more wonderful is that Meiji not only blossoms everywhere, but as its branches continue to spread, its roots beneath the loess become more intricate, thick and powerful.

To grow the biggest flowers, you need to absorb the richest nutrients in the soil as quickly as possible.In a fierce market, success or failure is a matter of millimeters. In the past, all chocolates in Japan were sold to children. In order to expand sales, Morinaga Confectionery designed a 70 yen chocolate for adults. Facing the clever attack of its competitors, the lagging Meiji had to find a strategy to quickly "grab a position".

Since the opponent has grown from one root to two roots, Meiji might as well grow more roots. It sells chocolates for 40 yen each to junior high school students aged 12 or 13; 60 yen each to high school students aged 17 or 18; and two pieces packaged together are priced at exactly 100 yen, targeting the adult gift market.

This way, there is no pressure on production, and the products can be adjusted at any time, which also avoids the problem of waste of resources caused by too many "roots and rhizomes". With the deployment of advertisements targeting different age groups, Meiji successfully broke the first-mover advantage of its competitors, and successfully "seized the position" by being a latecomer, thus establishing its absolute leading position in the Japanese chocolate market.

To produce larger flowers than ever before, thicker rhizomes are needed.

Meiji successfully extended its reach to the Japanese people's daily dining tables with fresh milk delivered every day. It wanted to occupy more space on the dining table, and freshly baked cakes every day became Meiji's new goal. It gave up expensive and inefficient newspaper advertising and instead used its own sales network to deliver cake product reservation cards and milk to users' homes.

When you recycle the bottles, Meiji will take the cards away and deliver freshly baked cakes and milk to the user's table the next day. Users only need to select three or two products from dozens of low-priced, quality-guaranteed categories every day, and they can have a different breakfast every day within a month.

The channel is already established, but Meiji pastry still needs some marketing gimmicks.

Soon, an "apology statement" from Meiji appeared on the front pages of newspapers: Due to operational negligence, the calcium carbonate content in a batch of pastries recently produced by Meiji exceeded the standard. The company will recall them and ask buyers to return the products to the sales point. We would like to express our apologies.

Calcium carbonate is soda, and exceeding the limit will not harm customers. In the overwhelming "recall" incidents, few people returned the products, but the company's credibility in the hearts of users soared instantly. Since then, in addition to breakfast cakes, Meiji has also birthday cakes, Christmas cakes, and various candies, which have almost become the child nutrition solution for many Japanese families. Every Christmas, the number of its cake pre-orders can reach 6 million boxes.

Meiji is good at capturing traffic and can come up with new ideas even for a small cookie.

In order to meet the increasingly diverse preferences of consumers, Meiji began to continuously upgrade the flavors of food and design more interesting packaging. For example, Meiji launched a chocolate dipped biscuit bar "Xinxin Cup". Although this product was novel, it was not enough to cause market discussion, so Meiji produced mushroom and bamboo shoot flavors, and kicked off a never-ending battle in the Japanese snack industry.

The "mushroom faction" and the "bamboo shoot faction" argued endlessly over which one was tastier, and even used scientific data to debate. After this long-lasting debate, there was only one winner - the traffic player Meiji.

3

The Strong and the Fit

After experiencing wild growth and thrilling experiences, Meiji has become a strong company. However, as a dairy company with a history of more than a hundred years, what makes Meiji truly extraordinary is that it has experienced the ups and downs of the Japanese economy and has remained a "fittest" in adversity.

In the animal world, tigers are strong, but due to human development, tigers are decreasing in number due to chronic hunger. Rats are weak, but they are still everywhere as the "fittest" in the environment, avoiding rat poison and sticks. Dinosaurs are strong, but they became extinct in the great changes in the environment, while the weak cockroaches of the same period have survived to this day relying on their amazing ability to adapt to the environment.

Whoever can adapt to the laws created by nature can survive, otherwise they will perish. It is not easy to become strong, but being the fittest is even more difficult.

First of all, the fittest must maintain a high level of insight and sensitivity to the environment.Meiji has always tried to instill in its employees that they should "listen to the voices of housewives" and always guess the problems, ideas and needs that consumers may encounter. Meiji keeps its attention on users. They use methods such as tasting, tasting, taste surveys, and observations to collect users' taste preferences and continuously innovate products based on user needs, thereby affecting the final sales situation.

In order to understand consumers' real product usage, Meiji also built the scale and scene of an ordinary user's home kitchen in the office. All product tests were completely brought into the consumer's living space to understand the problems they may encounter in each link of interaction with the product and improve user satisfaction. A Japanese yogurt that does not require licking the yogurt lid has impressed many Chinese consumers.

Straws invented for the aging society to prevent trembling elderly people from choking, bottle caps that anyone can unscrew, milk powder spoons that do not contaminate milk powder... "Every possible situation can be predicted by it," this is the Japanese's evaluation of Meiji.

Secondly, competitors are also in an ecosystem of “survival of the fittest”, and companies must always know themselves and their opponents.Meiji Company has a real showcase where the company's and all other companies' products are displayed at all times. They can intuitively see the market environment for their products and will not be complacent with past achievements.

When other companies launch new products, Meiji will always stand in the consumer's position, try the products or taste them, and try hard to think about the motivations of other companies in developing new products, so as to use them as the main basis for improving its own product quality and sales channels.

Again, to be the fittest, make sure you don’t make mistakes and keep iterating yourself.Meiji has established a high-standard quality assurance system, including quality assurance standards, quality assurance procedures, quality assurance policies and quality charters. The HACCP system is used in production, and the MES system is used in management. The double guarantee can ensure the hygiene and safety of the production process, eliminate human errors, and achieve the highest product quality.

Meiji Dairy has established a research headquarters in Odawara, Japan, which includes the Food Development Institute, the Food Function Science Research Institute and the Technology Development Institute. It is specifically responsible for new product development, nutrition and health function research, and commercialization technology improvement to keep the company constantly iterating itself.

In 1987, Meiji was the first in the world to complete the research and development of breast milk DHA, and conducted the largest breast milk survey in Japan (4,243 people), with a total of 170,000 people. The formula milk powder developed was hailed as "the milk powder closest to breast milk."

Such capabilities are just icing on the cake during market booms, but become a timely help during market downturns.

After 1990, Japan entered the "lost 20 years" stage, with stagnant economic growth and long-term economic downturn, and consumption also declined. Rational consumer brands such as MUJI and UNIQLO emerged, and Meiji also adjusted its product strategy accordingly.

On the one hand, just like the Meiji dairy product marketing strategy during World War I, by improving product efficacy, users can increase their payment.With its knowledge of pharmaceuticals and expertise in food texture and flavor, Meiji has launched functional products: such as the Meiji Yogurt LB81 series, which focuses on regulating intestinal health; the Meiji Yogurt R-1 series, which focuses on activating the immune system and preventing colds; and the Meiji Yogurt PA-3 series, which focuses on resisting purine bodies and inhibiting uric acid levels.

On the other hand, in response to consumption downgrade, prices continued to fall and reap the market.For example, Meiji uses vegetable fat instead of animal fat to reduce product costs without sacrificing flavor. The Meiji Essel Super Cup, with its affordable price, rich milk flavor and 200ml large capacity, breaks the common sense that 100 yen is only for a small cup of ice cream. The ice cream spoon design that does not leak a drop and the golden plastic texture make the product quality and cost-effective, making it a natural winner in the market.

China'sTong Ren TangPharmacies have been around for more than 300 years, Remy Martin in France has been around for about 300 years, Steinway & Sons in Germany has been around for more than 160 years, Coca-Cola has been around for more than 130 years, and the Meiji era has been around for more than 100 years...These century-old companies are often both strong and adaptable in the market.

As an adaptable brand in Japan, Meiji has not been doing well in China. In recent years, Chinese local brands and brands from other countries have been competing fiercely in the Chinese market, and Meiji has obviously not been able to replicate its successful experience in Japan in China. Since Meiji milk powder was completely withdrawn from the Chinese market in 2013, Meiji has been plagued by safety and quality problems and its prices have remained high. Meiji, which has focused on first- and second-tier cities, has not taken deep and firm roots. Naturally, it cannot reproduce the Japanese miracle in the fierce Chinese market.