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Business

Japan's Yamazaki plans new bakery to catch rising demand

Yamazaki Baking is bulking up bread production to sate Japan's growing hunger for the staple.

TOKYO -- Yamazaki Baking looks to have its first new Japanese bakery in 28 years up and running in 2018 to satisfy growing demand for grab-and-go sandwiches and snacks.

Japan's top bread company will spend more than 20 billion yen ($183 million) to build a bakery for loaves and sweet buns on the site of a Kobe plant that currently makes frozen dough. The new facility will be the company's fifth bakery in the Kansai region, raising production capacity there by around 10%. Construction will begin by the end of the year.

The last Yamazaki bakery built from the ground up in Japan -- in Anjo, a city near Nagoya -- was completed in 1990. The company has grown capacity on the cheap since then by buying and repairing existing plants. But bread demand continues to grow, justifying the expense of a new facility.

Bread is replacing rice as the staple in the diets of many in Japan. Households with two or more people spent more on the former than on the latter for the first time in 2011, according to a Ministry of Internal Affairs survey. Packaged pastries and sandwiches at retailers such as convenience stores are driving this change. Yamazaki rival Musashino Foods opened a Kobe bakery in 2015 to supply Seven & I Holdings' 7-Eleven stores.

Research firm Fuji Keizai sees Japan's bread market in 2020 at 937 billion yen, or 13% larger than in 2010. While a shrinking population bodes ill for the food market overall, Yamazaki aims to keep earnings climbing by expanding its leading share of one of the few growth segments.

(Nikkei)

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