Concentrated overseas M&A and the move into plant-based food (2023)

A bet beyond the dairy frame, and what came after

The core of this decision is the question of how far beyond the founding dairy business growth should be sought, with the home market shrinking. Infant formula is an extension of milk, and the population growth of South and Southeast Asia offered a tailwind. Entry into plant-based food built on soy, by contrast, was the bet furthest from milk — even granted the foothold of a tofu business run for forty years. Acquisitions concentrated into three years can be read as a choice to take on, at once, territories at very different distances from home.

What followed shows that the more distant the bet, the longer it takes. Plant-based food met a market that did not grow as hoped and ended in plant consolidation; the momentum imagined at the time of acquisition did not continue as expected. Still, to write it off as a failure this early sits badly against the fact that the overseas business is what supports Morinaga’s profit. Whether the idea of carrying dairy technology across to plant protein bears fruit, or turns toward retreat and contraction, the outline of the business territory the Onuki management widened is being redrawn again inside the next medium-term plan.