Company history

In March 1942 Okoso Yoshinori, twenty-six, opened a meat-processing works with seven people in Tokushima. He had left commercial college for family reasons and learned the trade selling for a Kagawa pig-farming cooperative; the drive, as he told it later, was blunt — he would make money and restore the family. Tokushima itself was an accident of wartime control: under the 一県一業一社 rationing regime the neighbouring prefecture had no ham plant at all, so that was where a newcomer could stand. Okoso called the choice “pure coincidence, nothing to do with ambition or selection” — and that habit of reading fortune as something to be pressed hard rather than planned would run through everything after.

What he had learned in Kyoto was that the trade was walked, not waited for: assigned to the branch there, he called on every butcher in the city and within a year was supplying about half of them. The plant burned in the air raids of 1945; a banker at Hyakujushi Bank told him it was a growing industry and to get on with it, and he rebuilt in the same city in 1948. He had read the market correctly. As bread entered the Japanese diet, household demand for press ham and Vienna sausage expanded fast enough to make the national newspapers by 1952.

The firm incorporated in December 1951 as Tokushima Ham with capital of $4,167 (¥2m), and in May 1956 built the industry’s first reinforced-concrete plant, in Osaka. Okoso later wrote that the success of that move into Osaka “became a great source of confidence” — it was the point at which a provincial maker began behaving like a national one. Plants followed at Hiroshima and Asahikawa in 1960 and Isahaya in 1962; the shares were listed on the Osaka exchange’s second section in October 1961 and in Tokyo four months later.

The company that exists today was assembled in a single stroke in August 1963. The proposal came from outside the industry — Miyazaki Teru, president of Asahi Kasei — and its logic was defensive: consolidate at home before Swift and the other Western meat giants could establish themselves in Japan. Tokushima Ham absorbed Torisei Ham, the industry’s fourth-largest firm, moved its head office to Osaka, took capital of $2M (¥703m) and renamed itself Nippon Ham. It went from third place to first overnight. Okoso justified it as reach: the trade covered “only a small, narrow part” of the market, and scale plus salesmen was how you got to the consumer. But the cost of speed showed immediately — labour disputes and the slow adoption of the new Nipponham brand kept earnings depressed for four or five years.

Swift itself had offered capital in 1962 and been refused; in 1969 Okoso took a technology licence from the same company instead, using it to develop new products while conceding no ownership. Take the technology and the market, never the equity — that formula, fixed here, would govern the overseas acquisitions of the next thirty years. At home the company built the other half of the machine itself: a “housewife directors” panel from 1968 to feed consumer opinion into product development, and a route-sales force of some 4,300 that competitors called high-handed. Plant, brand and distribution were all held in-house, and by the 1980s the combination topped Nikkei Business’s marketing survey two years running.

In January 1973 Nippon Ham bought the Takuhoku Home Flyers and renamed them the Nippon Ham Fighters. The purpose was not returns. Okoso wanted a shared object for a workforce still knitting itself together after the merger, and something for the salesmen: “a pleasure other companies’ salesmen don’t have.” It worked as advertising as much as morale — attendance rose from 500,000 at purchase to 2.45 million by 1989, and the perennially loss-making club moved into the black. A 1976 depositary-receipt listing in Luxembourg added access to European capital. Domestic leadership, a national brand and a funding channel were all in place before the company went abroad.

While most of the industry stayed in ham and sausage, Nippon Ham went upstream into meat itself. In March 1977 it bought Day-Lee Foods of Los Angeles — the first serious acquisition of a foreign meat company by a Japanese one. It ran a loss of ¥400–500 million there the following year before reforming everything from procurement to sales and turning it round. The context was trade friction: Washington had begun pressing Japan to abolish its quotas on beef and oranges, and the direction of travel was plain. Okoso framed the purchase as a beachhead and, explicitly, as an investment in people rather than profit — the company was building overseas training programmes because “developing people is indispensable.”

Australia became the axis. A local subsidiary was set up in 1978, and between 1987 and 1990 the company acquired the Oakey abattoir, the Wyalla station and TBS, assembling vertical integration from slaughter through processing to distribution. Okoso was candid about shifting away from American supply: the cattle were better in Australia, beef consumption was rising across the newly industrialising economies, and geographically Australia had the future as a production base. In the three years to March 1990 the group put roughly $690.6M (¥100bn) into securing that supply, mostly there. At home the same period produced the premium lines that still carry the brand — Thin Slice ham in 1981, Schau Essen sausage in 1985.

When beef imports were liberalised in April 1991 it arrived exactly as scripted. Rivals who had built in the United States withdrew; those in Australia prospered, and Nippon Ham held first place in Japan on the back of a procurement base it owned outright. What the strategy never resolved was the other half of the question. Being able to source meat cheaply and at scale is not the same as running a profitable business abroad, and the logic by which the foreign subsidiaries were supposed to become independent earners was left vague for another twenty years — the seed of the restructuring to come.

In August 2002 it emerged that Nippon Food, a subsidiary, had exploited the BSE-era beef buy-back scheme by relabelling imported beef as domestic. Boycotts followed within days, meat sales fell, and protests reached the Fighters’ stands. President Okoso Keiji and chairman Okoso Yoshinori both resigned; the chairman’s defence — that he had not known what a subsidiary was doing — carried little weight from the man regarded as the industry’s boss. Group sales slid from $7.8B (¥945bn) in the year to March 2002 to $7.3B (¥910bn) the next, and a brand built over sixty years was damaged. The founding family left the front line for good.

The decade that followed was spent buying trust back. Fujii Yoshikiyo took over in 2002 with recovery and reconstruction as one job; Kobayashi Hiroshi, from 2007, set a ¥1 trillion sales target and said later that the inspection and traceability spending criticised at the time as excessive had been right; Takezoe Noboru institutionalised the reforms from 2012, and in 2014 the English name became NH Foods Ltd. Revenue passed a trillion yen for the first time in the year to March 2012 at $12.8B (¥1.02tn), and the year to March 2017 produced a then-record operating profit of $494.3M (¥54bn).

The breakdown of that record told a harder story. The fresh-meat division earned $403.3M (¥44bn) of it; the newly separated overseas division opened at a loss and stayed there — negative through the following two years, with the Uruguayan operation bought in 2017 never rising above thin returns. Meanwhile capital kept going out, including a three-year programme of some $2.3B (¥248bn) that included the Hokkaido Ballpark F Village. When feed costs, a weak yen and energy prices hit together, operating profit for the year to March 2023 collapsed to $169M (¥22bn) — under a third of the peak — with three downward revisions along the way. Analysts stopped asking about growth and started asking about return on capital.

Presenting third-quarter results in February 2023 as incoming president, Igawa Nobuhisa named the reason the restructuring had been so slow: a lack of urgency in the operating divisions. He went further in interviews, arguing that two decades of weighting governance above all else — the direct inheritance of 2002 — had drained the company of any instinct to attack. It was an unusually plain admission that the mechanisms built to restore trust had also suppressed the initiative that once drove the business.

The diagnosis was converted into capital allocation. In August 2023 the group sold its entire stake in the Uruguayan operation, accepting a loss of about $39.1M (¥6bn) to be rid of a low-return overseas asset; processed-food production lines were cut by 20 percent and capital spending pulled back to $1.1B (¥150bn); a marketing headquarters was created to optimise across manufacturing and sales. “Break with self-reliance,” ran the declaration — a repudiation of the expansionist style that had defined the company for eighty years. Profit has since run ahead of plan and the overseas business has begun processing rather than merely supplying, but the culture change and the new ventures are unfinished, and the reform now passes to Maeda Fumio to prove that a company can be run on a measure other than size.