Yamazaki at a Glance
June 1, 2004
Yamazaki at a Glance
Company: Yamazaki Baking Co. Ltd. Headquarters: Tokyo, Japan President and CEO: Nobuhiro Iijima Web site: www.yamazakipan.co.jp 2003 Consolidated Net Sales: 729.4 billion yen, or about $6.6 billion U.S. dollars, at the rate of 110 yen to $1. Businesses: Food business (92.1% of sales); retail business (7.7% of sales); other business (0.2% of sales) Products: Bread, Sweet Buns, Japanese-style confectionery, Western-style confectionery. Processed bread, prepared rice and side dishes (Bento lunch boxes). Biscuits, crackers, sembei and other products. No. of Bakery Plants in Japan: 25 No. of Transports in Japan: 3,600 routes serve 100,000 stores twice daily. Retail Outlets: Daily Yamazaki convenience stores, Vie de France bakery/cafes, Y Shop licensed stores.
Yamazaki’s Way to Life
Nobuhiro Iijima recalls the events of July 1973 just like they happened yesterday. Ten days after being baptized into the Ikenoue Christ Church, Iijima, his father and mother had their faith severely tested when Yamazaki Baking’s most productive plant in the Musashino city caught fire and burned to the ground.
The plant, built a decade before, had been one of the largest in the world at the time and represented the biggest and best of American, European and Japanese ways of baking. Nobuhiro Iijima remembers how his father, Tojuro Iijima, who founded the company, began to pray. It was “the start of the New Yamazaki under God’s hidden presence.”
In a country where the population is predominantly Buddhist, Shinto or a mixture of both, Nobuhiro Iijima is one of a handful of top executives in Japan who’s a practicing Christian. In fact, only about 0.7% of Japanese call themselves Christians. Today, the devoutly religious Iijima incorporates Bible teachings and Peter Drucker’s management theories into the way Yamazaki operates today in what he calls “The Way to Life.”
Specifically, Iijima has incorporated the Sermon on the Mount, the Beatitudes, the 10 Commandments and other key passages in Scripture into a management model that he can use for crisis management, improving the company’s profitability, motivating employees and for finding solutions to other business dilemmas.
Through the company and his church, Iijima is involved in a number of charities. The company supports the Foundation for International Development and Relief (FIDR), a non-government organization that provides emergency relief during disasters as well as supporting farming, education and healthcare development through a number of projects in Southeast Asia.
In addition, FIDR and World Vision Japan Support Association, which Yamazaki supports, sponsors the Fountain of Love Charity Concert, which provides aid to Bangladesh, Kenya, Laos and other developing nations.
Moreover, the Iijima Memorial Foundation for the Promotion of Food Science and Technology, which was founded by Tojuro Iijima, sponsors research on grain-based products and promotes the development, advancement and consumption of foods as part of a healthy lifestyle.
Big Opportunities From Small Stores
At 11:40 a.m. at the Vie de France bakery/café in a modern high-rise office building in the fashionable City Center of Tokyo, there’s not a seat in the house. Fifteen minutes earlier, the place was half empty. Now, the lines at all six registers are seven and eight deep with consumers, nearly all of them young women in their 20s and 30s holding trays of bakery croissants, baguette sandwiches, salads, prepackaged sandwiches, cups of fruit or a light parfait, pastry, yogurt and corn flakes. During the busy lunch period, each register is ringing up more than $2,000 an hour, notes Kanji Tasaka, department manager for the chain.
As bakers scramble in cramped quarters, pulling chocolate croissants and individual pizzas hot out of a four-deck oven, Tasaka adds that the bakery/café was designed for young professional women.
“We have calorie-conscious foods, a favorable selection that appeals to young women, a modern stylistic store design and a fashionable setting in the area,” he says through an interpreter.
“We’re the only bakery that targets young women who work in the offices around here,” he explains. “We have small portions and gourmet desserts. The pricing is a little bit more, but the products are more unique and the foods are made fresh.”
While there are only a handful of Vie de France outlets in the United States, the chain continues to grow in Japan. Last year, Yamazaki Baking opened 10 new stores, bringing the total number of bakery/cafés to 152. This year, it’s adding 15 more with the busiest stores ringing up average sales of about $250,000 a month, Tasaka says.
In addition to its Vie de France business, the company operates or licenses out 2,048 C-stores under the name of Daily Yamazaki. In addition, it operates or licenses out retail units under the Y Shop name. According to its annual report, retail sales reached the U.S. equivalent of about $500 million last year, or 7.7% of Yamazaki’s consolidated net sales.
To strengthen its position in the growing but highly competitive C-store channel, the wholesale bakery is developing exclusive new products that will be sold at its Daily Yamazaki stores. In addition, the company has rolled out new high-profit stores with Daily Hot in-store bakeries to provide fresh, on-the-go snacks and meals for the ever-so-mobile Japanese consumer.
Why Yamazaki, and Not Iijima Baking Co?
That’s a good question. According to “From a Corn of Wheat,” a 190-page history of the company, founder Tojuro Iijima named the company after his widowed sister’s late husband. Since Iijima was active on the board of the Todai Agricultural Cooperative in 1948, he would never have received approval to open a new baking enterprise under his own name, Iijima. By the time he could call the bakery after his family name, the Yamazaki brand was well established. There was also a precedent. The Nakamuraya Co. Ltd., where as a youth Tojuro Iijima had his business training, also did not go under the name of its founder, Aizo Souma. So from the beginning, Tojuro Iijima didn’t think it was necessary for his firm to carry his name. Since he founded the company, he had devoted all of his energy to the growth and development of his bakery. The name Yamazaki means “mountain cape” in Japanese.