Choosing profit over volume, and four brands over many (2023)

When the market leader lets go of volume

For more than forty-five years, since 1975, Kameda had held first place in Japanese rice crackers. For a market leader, volume is influence over the market, and giving up shelf space weakens the bargaining power over that shelf. That it nevertheless put margin first appears to be because the experience of 2022 came before it — when supply could not keep up and the shelves were lost anyway. Once you have confirmed in practice that chasing volume you cannot supply does not protect a shelf, there is little reason to climb back into a fight decided by price.

It is too early, though, to call the choice correct. In fiscal 2024 the parent’s rice-cracker sales had returned to the fiscal 2022 level, but market share remained lower, and the company itself says it is still checking why. The 10% margin target sits in fiscal 2030, so whether it is met lies further ahead. The answer this company has given to the question of which to prioritise — holding first place, or holding margin — will look different depending on where its share finally stops falling.