Morinaga & Co. — Company History

From a two-tsubo workshop to volume production at Shibata-machi and Osaka

Morinaga & Co. starts from Morinaga Seiyo Kashi Seizosho — the Morinaga Western Confectionery Manufactory — which Morinaga Taichiro (森永太一郎) set up in August 1899 in a workshop of two tsubo (about 6.6 square metres) at Akasaka Tameike in Tokyo. Taichiro had spent eleven years in the United States learning how Western confectionery was made, and after returning he moved the shop out to the Tameike main street eight months after founding and to Akasaka Tamachi three years later. Japanese confectionery of the day had not risen above a cottage industry in which a sweet needed only to look the part; Taichiro paid the closest attention to the blending of ingredients and chose the road of mass-producing cheaply a “confectionery for children” that gave nutritional value to what had been no more than a luxury. At the end of the founding year he made the first caramel in Japan. In 1904, out of concern for hygiene, the firm was the first in the trade to put its workers in uniform, and in 1905 it registered the Angel mark as a trademark.

In January 1905 Matsuzaki Hanzaburo (松崎半三郎) joined as manager and took charge of the business as a whole, and the Morinaga–Matsuzaki partnership was born. In 1907 a new plant was built at Shibata-machi and the firm moved there; an Osaka branch followed in 1908. In February 1910 Morinaga Shoten Co. was incorporated with capital of ¥300,000 and Morinaga Taichiro became its president, and in April of the same year the capital was raised to ¥500,000. In November 1912 the name was changed to Morinaga & Co., and the following year, 1913, Milk Caramel went on sale. Caramels were then sold loose as a matter of course, so the pocket-sized paper sack put out in March 1914 caught on and spread the Morinaga name at a stroke.

In 1915 the firm began making biscuits for export, and in September 1918 it installed chocolate-making machinery at the Shibata-machi plant, putting the first domestically produced milk chocolate in Japan on sale from October. Milk Cocoa followed in 1919, and in the same year Morinaga was the first in the trade to adopt an eight-hour working day. In July 1920 it merged Nihon Rennyu (日本煉乳, Japan Condensed Milk) and took over its Mishima plant. Its channels ran beyond the home islands into China, Korea, Manchuria, the South Seas and India, and enlarging the plant became unavoidable. In preparation, Matsuzaki Hanzaburo toured the trade in the United States and in the countries of Europe in 1918 and again in 1921, and came back having imported machinery of several new types.

New machinery from the Western tours, and the halving of capital after the return to gold

The imported machinery brought the Tsurumi and Tsukaguchi plants into being; after Tsukaguchi came Tsurumi, opened in June 1925, and volume production of confectionery on the newest equipment began. To pay for the equipment the capital was raised to ¥3 million in May 1923 and to ¥15 million, of which ¥6 million was paid in, in May 1924. In March 1923 the firm set up Morinaga Seihin Hanbai to sell its own products, and thereafter placed sales companies of the same name across the country. In May of that year it began mass production of biscuits, opened a Morinaga Candy Store in the newly built Marunouchi Building and established Morinaga Shoji. When the Great Kanto Earthquake struck that September it released milk and confectionery in quantity to the victims, and in 1928 it put the Morinaga Belt Line Stores in place as a distribution network.

The price of expansion showed after Japan returned to the gold standard in 1930. As the business depression deepened the company could not absorb the output its enlarged plant produced, and management ran into a crisis. No dividend was paid for three consecutive periods, from the September 1931 term through the first half of 1932; in August 1933 the capital was halved to ¥7.5 million, and only from the March term of that year was a 6 per cent dividend restored. After the reduction the business moved gradually towards stability, and there the strengthening of the wartime system followed. Marie had gone on sale in 1923, and Morinaga Chewing Gum and Tap Gum in September 1931. In April 1935 Matsuzaki Hanzaburo, spoken of as Morinaga Taichiro's celebrated partner, became the second president.

From sugar coupons to the renaming as Morinaga Shokuryo Kogyo, and the burning of Tsurumi

In 1937 the company held the Morinaga Mother's Day Festival, which spread Mother's Day in Japan; thereafter the strengthening of the wartime system took away the freedom to trade. Sugar rationing by coupon began in May 1940, and in October of the same year company accounting, the use of bank funds and wages all came under control. In June 1941 the sale of wheat and barley passed into state management, and once the country entered the Pacific War the conditions of production — raw materials, power and labour — were constrained across the board. In October 1942 the company merged four firms, Morinaga Nyugyo, Morinaga Shokuhin Kogyo, Tokai Seika and Morinaga Kansai Gyunyu, and took over the Chukyo and Oyama plants. In November 1943 the corporate name too was changed, to Morinaga Shokuryo Kogyo (森永食糧工業, Morinaga Food Industries).

In April 1945, late in the war, about 60 per cent of the Tsurumi plant was lost to fire in an air raid. In 1946 Morinaga Tahei (森永太平) became the third president, and with economic controls still running the company restarted from the dairy division first. After the war it put its strength into the turn from a controlled economy to a free one, into repairing war damage and into restoring productive capacity, and first installed emergency equipment to raise output at the Tsukaguchi plant, which had escaped the bombing. Capital went from ¥15.2 million to ¥50 million in September 1948, and to $277,778 (¥100m) by a doubling in October 1949. With sugar, starch syrup and flour returning to free sale and general purchasing power recovering, results improved year by year.

Spin-off, listing and restored name in six months, and the making of the postwar staples

Within six months of 1949 the company established Morinaga Milk Industry in April, listed on the Tokyo, Osaka and Nagoya stock exchanges in May, made its sales division independent as Morinaga Shoji in August, and in October transferred the dairy division to Morinaga Milk Industry and changed its name back to Morinaga & Co. The name forced upon it in 1943 was thus restored after six years. The newly independent Morinaga Shoji set up eighty branches and sales offices in the main cities of the country and handled the sale of every product. This decision to narrow the company's resources onto confectionery was carried out under the third president, Morinaga Tahei. The restoration of the name coincided with permission for the free sale of caramels, and the company applied itself to volume production and volume selling.

Total sales of $6.7M (¥2bn) in the September 1949 term, the term in which the free sale of confectionery was allowed, grew to a little over $19.7M (¥7bn) by the March 1955 term. Importing the newest machinery from the United States, Britain, Germany, France and Switzerland, the company established itself as first in the industry across its four main products — caramels, chocolate, biscuits and drops. The money put into this expansion of plant reached $4.2M (¥2bn). In July 1952 an integrated caramel production line was installed at the Tsurumi plant, and in July 1954 the retail-outlet division was separated off as Morinaga Candy Store. Capital was built up as well, to $555,556 (¥200m) by a bonus issue in March 1952, $1.4M (¥500m) in October 1953 and $2.1M (¥750m) by a further bonus issue in October 1955.

The staples of the shop floor came together across the 1950s and 1960s, and in April 1953 a globe-shaped neon tower was raised over Ginza. The company widened into frozen confectionery in 1956 and pancake mix in 1957. In April 1960 the Mishima plant came on stream and the instant-food division was enlarged; a capital increase in October 1963 took the capital to $8.3M (¥3bn), and the following year, 1964, Hi-Crown Chocolate went on sale. In December 1961 the company took a capital stake in Taiwan Seika (台湾製菓股份有限公司) and from 1962 began manufacturing in Taiwan. In March 1965 it established Yamato Shokuhin, and in August of the same year Morinaga General Mills, a joint venture with General Mills of the United States.

The Tsurumi plant at its height, and the limits of exporting

Tsurumi, the mainstay, was the largest of the company's plants: in 1967 it employed 1,400 people, and counting the parts of the head-office structure sited there, such as the confectionery research laboratory, some 1,600 in all. Converted to retail prices, what it made came to $4.2M (¥2bn) in a good month and $2.8M (¥1bn) in a poor one. Sales for the March 1967 term were expected at $50M (¥18bn) to $52.8M (¥19bn) and profit at about $1.3M (¥450m), while Hi-Crown, the best-selling single line, turned over $1.4M (¥500m) a month. Cocoa beans cost $556 (¥200,000) to $639 (¥230,000) a tonne delivered to the plant, 30 per cent more than two years earlier. World production of cocoa beans ran at 1.2 to 1.3 million tonnes a year, of which Japan imported some 35,000 tonnes.

As of 1967 the company's exports reached no further than Hawaii in the east and Malaya and Thailand in the west. On North America its view at the time was that Hi-Crown could compete well enough on quality but that retail margins made the sums impossible, and that it wanted instead to open up the Middle East, with its purchasing power and standard of living. At home the staples kept coming — Chocoball in 1967, Koeda (小枝) in 1971, Choco Monaka in 1972 and Hi-Chew in 1975 — and in 1977 the company tied up with Carnation of the United States and launched Carnation Ice Cream. On the corporate side it absorbed Morinaga Shoji in October 1969, and set up Morinaga Kaihatsu in December 1970, Morikazu Shoji (森和商事) in September 1973 and Morinaga Dessert in January 1980.

The price of pushing stock onto the trade, and the slimming under Inoo Heihachi

By 1979 the company carried 200 lines in confectionery alone and 400 counting foods and the rest, yet its sales were much the same as those of Ezaki Glico, which held only about 35 — and the result of multiplying the count showed up in stock and returns. As each accounting date drew near, a few new products would be launched and the books squared by pushing stock onto the trade; Matsuzaki Akio (松崎昭雄), then a director and head of the president's office, called the practice something like a narcotic. Product stock had piled up by November 1978 to two months' worth, $78.1M (¥16bn), twice the industry average, and the return rate had risen to 2–3 per cent against about 1 per cent elsewhere. The break-even ratio had stood above 95 per cent since 1977, leaving a constitution that dropped straight into loss if lines were cut and sales fell with them. Having let the Angel Association (エンゼル会), its 6,000-shop retail organisation, become a shell and moved its trade towards the wholesalers, the company found that the sheer number of items was a weakness in dealing with them too.

The March 1979 term produced an ordinary loss of $3.9M (¥887m), the first deficit since the war, and at the September interim the ordinary loss widened to $10.4M (¥2bn). In the eightieth anniversary year Morinaga Tahei, president for 33 years, stepped back to a chairmanship without representative authority, and Inoo Heihachi (稲生平八), who had been president of Morinaga Milk Industry, was called back and took the presidency in March 1979. At the same time five senior figures resigned to take responsibility, among them vice-president Matsuzaki Tamotsu (松崎保) and director Matsuzaki Kazuo (松崎一雄). Personnel costs as a share of sales stood at 18.8 per cent in the March 1979 term, exactly double Ezaki Glico's 9.4 per cent, and gross value added per employee was $21,478 (¥5m) against Glico's $51,000 (¥12m) — less than half.

The rebuild began with slimming. A call for voluntary redundancy closing on 20 December 1979 drew more than 900 takers, counting the ending of post-retirement re-employment and natural wastage. Headcount fell by 967 from the 4,700-odd at the end of the March 1979 term to about 3,700, and personnel costs were expected to come down by $21.7M (¥5bn) a year. In production the seven existing plants were cut to five, with Fukuoka and Oyama hived off as Kyushu Morinaga and Tochigi Morinaga to push specialisation on the principle of one line per plant. The 400 items were halved to 200, the twelve regional sales departments cut to eight, stock squeezed by $34.8M (¥8bn), and $13.9M (¥3bn) of land bought during the oil-shock years sold off. Inoo Heihachi created a president's office and had the seventy branch managers and ten sales-department heads across the country write a daily journal.

Sports Foods sold in the wrong aisle, and the four years of the Glico-Morinaga affair

A product from a new field launched in the middle of the rebuild went to the wrong shelf. Sportivo Chocolate, the first of the Sports Foods line released in November 1979 at ¥200 for four pieces, had been fortified with calories and given additions such as Korean ginseng, which put it at three times the price per gram of ordinary chocolate; it flowed down the confectionery channel and was discounted on supermarket shelves. From January 1980 the company switched its outlet to sporting-goods shops nationwide, and confined the four Sports Foods products it put out later to that single channel. The move into health carried on either side of this experience: Ottotto (おっとっと) in 1982, and the health business proper begun in 1983.

On 12 September 1984 a threatening letter was found left at the company's Osaka branch. Nine years later Takagi Sadao (高木貞男) looked back and said there had without doubt been a complacency of surely not us. The extortion of Ezaki Glico had happened only six months earlier and the culprits had not been caught, so a second and a third case were possible, and yet no hand had been played against the chance. Takagi Sadao, then vice-president, talked it over with the president for about thirty minutes, judged that against a crime of this social kind there is no solution but the arrest of the criminals, and reported it to the police. Outside the company there were voices saying that a firm is no use once it has collapsed, and that it should look for a way to survive even if that meant paying.

A response headquarters of the president and five others was formed, and every day they argued over whether their own line was the right one. They asked not only employees but their families to help keep watch for suspicious figures at the shops. From the second half of December all employees were gathered site by site, with the president and the executive directors dividing between them the work of explaining the situation. The scattering of poisoned confectionery cut sales visibly, at a loss of $126,300 (¥30m) a day. It took four years for sales to come back to the level before the affair, and as of 1993 the culprits had still not been caught. Through it all the company also received warm support from consumers. In April 1987 the new Oyama plant was completed.

The ¥11bn a character earned, and the missed dividend Angel Forest brought on

The character drawn by Sato Katsunori (佐藤勝則) and Narabe Takako (奈良部貴子) of the design office for the packaging of the aerated chocolate launched in March 1988 was Nu-bo (ぬ〜ぼ〜). Air-in Choco was a product with fine bubbles of air blown into the chocolate, sold to adults under the name Spoona from November 1986. The Nu-bo packaging spread to ice cream, cookies, gummies and cake, and total sales of the series in the March 1991 term came to about $81.8M (¥11bn), some 12 per cent of the $658.7M (¥89bn) of confectionery sales. Its first year, 1988, brought about $23.4M (¥3bn) and 1989 about $50.7M (¥7bn), while licensing income from the character itself was around $371,720 (¥50m).

Outside the core business, around 1990 the company drew up “Angel Forest” (エンゼルの森), a plan to build an ideal city with work, housing, leisure and learning all together across 1,000 hectares of hill country at Ueno in Mie prefecture. The total project cost ran to $2.4B (¥350bn), but the collapse of the bubble broke the funding plan and no ground was broken for more than six years. Confectionery in the same period lacked a hit among its new products and slipped back into the fourth-place group, and with the chronic losses in frozen confectionery on top the March 1997 term sank to the first missed dividend in eleven years. President Matsuzaki Akio took responsibility and moved up to chairman, and Morinaga Gota (森永剛太), an executive director and a grandson of the founder Morinaga Taichiro, became president. On the shop floor, Ice Box appeared in 1989 and Dars in 1993.

In December 1996 five business units — chocolate, caramel and candy, biscuits and snacks, fancy, and market development — were placed under the confectionery division, reorganising the company so that profit was managed on an independent-accounting basis by product field, and seniority was broken by such steps as promoting a 38-year-old assistant section head. In 1999 the company withdrew from the Angel Forest development, and in April of that year absorbed Morinaga Kaihatsu. The period also brought litigation with Nissin Food Products, settled on 1 March 1993 on condition that production of Ottotto Chicken Ramen flavour, launched in February 1992, ceased by the end of July 1993.

in Jelly as a second pillar, and the price rise that tripped the 2000s

in Jelly (inゼリー), launched in 1994, lay on the extension of the health business begun in 1983. The company widened the field, starting a mail-order business in 2004, putting out Oishii Collagen Drink (おいしいコラーゲンドリンク) in 2006 and in Bar in 2009. On the confectionery side Carré de Chocolat went on sale in 2003, and from 2001 HI-CHEW was made in Taiwan. For quality it introduced Morinaga HACCP in 1995, managing the state of the packaging and even the shape and taste of a product on the basis of the international method for forestalling food hazards, and in 2000 it obtained ISO 14001 certification at four domestic plants.

Its return to the restaurant trade lasted three years: Angel Food Systems, established in July 2001 by taking over the operating rights of Restaurant Morinaga, had its shares sold off in December 2004. In the grain-price surge of 2007 the company raised the price of its main biscuit range by about 10 per cent ahead of its rivals; the competition did not follow, shop after shop dropped the range, and sales of that range fell by 30 per cent against the fiscal 2007 level. Consolidated sales fell to $1.8B (¥147bn) in the March 2012 term with operating profit of $35.1M (¥3bn), and the March 2006 term had already recorded a net loss of $24.1M (¥3bn).

The rebuilding ran in two directions, overseas and health: Morinaga America was set up in August 2008, Morinaga Foods (Zhejiang) in December 2010, Shanghai Morinaga Foods in 2012 and Morinaga America Foods in 2013, while the flagship Takasaki Morinaga plant came in 2011 and Morinaga Asia Pacific, based in Singapore, in May 2019. Manufacture of HI-CHEW in the United States began in 2015. Consolidated operating profit rose from $104.7M (¥11bn) in the March 2016 term to $198.5M (¥21bn) in the March 2020 term, an operating margin of 10.2 per cent.

Selling the Morinaga Milk shares, the move to Prime, and HI-CHEW abroad

On 28 February 2022 the company announced the sale of the 4.3 million ordinary shares it held in Morinaga Milk Industry. The next day, 1 March, Morinaga Milk bought them in as treasury stock through an off-auction transaction at ¥5,760 a share, about $188M (¥25bn) in all, and Morinaga & Co.'s holding fell from about 12.7 per cent to about 4.0 per cent. The March 2022 term booked an extraordinary gain of $167.5M (¥22bn), net profit of $211.6M (¥28bn) and a return on equity of 22.0 per cent. The tie of capital with the partner it had itself cut out as its dairy division 73 years earlier was all but undone ahead of the move to the Tokyo Stock Exchange's Prime market in April 2022. Of the seventeen directors as of the March 2024 term, seven were outside directors and four were women.

Consolidated sales for the March 2025 term were $1.5B (¥229bn), operating profit $141.7M (¥21bn) and net profit $118.3M (¥18bn). Overseas sales were $202.5M (¥30bn), 112.6 per cent of the previous year, for an overseas ratio of 13.3 per cent, and operating profit there was $23.4M (¥4bn), $1.3M (¥200m) less than the year before. In the United States the company had at first sold HI-CHEW through Japanese and other Asian retailers, but it changed its sales policy once it judged the candy aisle of the large American organised retailers to be the shelf worth attacking, and overseas sales of HI-CHEW came to exceed those in Japan. The company has set a target of $501.2M (¥75bn) in overseas sales and an overseas ratio of 25 per cent or more by 2030.

In 2024 head-office functions moved to a new building, the Morinaga Shibaura Building. As of 30 June 2025 the group comprised 18 companies and 3,231 employees, with 1,597 people in Japan across the head office, one laboratory and four plants, 244 at two companies in North America and 451 at four companies in Asia outside Japan. In Japan the proportion of women in management was raised from 6.7 per cent in fiscal 2018 to 13.5 per cent in fiscal 2024, and the share of sustainably sourced cocoa beans from 9 per cent in fiscal 2021 to 78 per cent in fiscal 2024. On the research and quality side the Morinaga R&D Centre came into operation in 2009, and in 2018 the domestic plants and production affiliates obtained FSSC 22000 certification.