Is the game up for Yamazaki in the cookie wars?

The beginning of September marked a new chapter in the history of Yamazaki bakeries, a food and retail goliath with sales over USD10bn, when it lost the manufacturing and sales rights in Japan for a stable of thoroughbreed brands including Oreo and Nabisco.

Yamazaki Bakery new range


There was a time, not so long ago, when entering the complex and fragmented Japanese market always necessitated partnering with a strong local company. It was a path many international brands trod, but there has been a gradual sea change with many global companies, including Nestle, Danone and now Mondelez taking back control from local partners, confident they can make the business grow faster and be even more profitable.


Yamazaki has been badly stung by the recent turn of events, despite it being on the cards for some time. Whilst the company’s manufacturing capabilities are not in question, its ability to create sustainable and meaningful brands is. 


Its new marketing strategy encompasses both corporate and product brands. The revised corporate name Yamazaki Biscuit company is understandable, the new product brands, “Levain,” “Levain classical” and the soap sud sounding “Ariel” are less so.

Mondelez has substantial expertise in snack marketing, understanding shopper behaviour to optimise impulse sales plus has a large sales team experienced in working with big Japanese retailers. On the commercial capability front they are likely more advanced and experienced than Yamazaki in my view.

There has been some debate on blogs and Twitter on the wisdom of Mondelez’s decision to source the “new” Oreo and Ritz from China. Every survey I’ve seen in Japan shows that “made in China” is not a USP. However its Suzhou plant is not an OEM facility and capacity has recently been doubled; there will be cost advantages and I am sure the company has done exhaustive consumer testing. It will not be the first time either Mondelez Japan uses an overseas plant to supply Japan either, Halls is made in Thailand.

How else can Yamazaki respond? Buying rather than licensing global brands may be one route, many large MNCs are open to selling non core brands. Domestic takeovers should also be considered. Glico’s portfolio could complement Yamazaki’s handsomely. Taking its portfolio upstream and developing added value snacks for example in wellness may be more fruitful. Look at Otsuka’s success with SoyJoy.

Internal root and branch change is likely necessary too. Developing and strengthening brand marketing should be high on management’s agenda, actively hiring experienced commercial talent from outside to bring in fresh thinking and action another.

I am wondering if these topics will get a hearing at the next AGM? 

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