Hagoromo Foods - Company History

Hagoromo Foods began in 1931, when Goto Isokichi opened a small cannery in Shimizu, Shizuoka. Annual sales were about two million yen, and the firm was one of many along the port doing the same thing: taking the tuna landed there and sealing it into cans. The Depression had left the catch with nowhere to go, so Goto travelled alone to the United States, brought the canning technique home, and started production. Almost none of it was eaten in Japan. The cans went abroad, packed to the specifications and under the labels of the foreign firms that bought them.

Reconstruction after the Pacific War came as a series of name and plant changes — Shimizuya in 1947, Goto Bussan the same year, Goto Bussan Kanzume in 1948, Goto Kanzume in 1950 — alongside a new Shimizu plant in 1950 and the absorption of two Yaizu canners in 1951. The shape of the business did not change. Shimizu packers were still, as late as the 1990s, producing what the trade called “white-wrap”: unbranded cans sold under a wholesaler’s or a large manufacturer’s name. The second Goto Isokichi, who took over the firm, drew a hard conclusion from that. A company that simply fills what it is told to fill is a packing house, not a manufacturer; a manufacturer ought to know what the people at the far end are actually eating.

So in May 1956 — with exports running well and no number on the books arguing for a change — Goto Kanzume opened a Tokyo sales office and started selling at home. Export business, he said, went out through trading houses: you could not see the customer, and you were, in effect, a subcontractor. Fruit cans could only be packed in winter, so the own-brand line was built around tuna instead. In 1958 the company cut back the American exports that supplied most of its revenue and put the proceeds into a consumer product. The name came from “chicken of the sea” — a can labelled “tuna in oil” risked making ordinary shoppers think of machine oil — and in November 1958 Sea Chicken was registered as a trademark.

Selling cans at home meant getting them onto shelves, and here the company moved before anyone else, signing up strong regional food wholesalers as exclusive agents and binding them into an association, the Hagoromo-kai, that became a national distribution network. Branch offices followed the network west — Nagoya in 1961, Osaka in 1962 — and a macaroni plant opened in Shimizu the same year. The network worked. The product did not. For nearly a decade after launch, canned tuna remained something Japanese households did not recognise and did not know how to cook, and Sea Chicken barely moved.

In 1967 the second Goto Isokichi broke the deadlock with a bet: $27,778 (¥10m) a month for six months of television advertising on Tokai TV — $166,667 (¥60m) in all, against annual sales then in the low billions of yen, or roughly twenty to thirty per cent of turnover. He described it as jumping off the veranda at Kiyomizu, and admitted that with profits as thin as they were it could have killed the company. He spent it on Sea Chicken rather than on fruit cans, because fruit cans were crowded with rivals and Sea Chicken was his own name. The pitch was economic: at a time when meat was dear, tuna was the substitute. Sales of Sea Chicken went from about 30,000 cases in the year to March 1967 to a million five years later and 2.5 million by fiscal 1974; company revenue rose from ¥3.6bn in fiscal 1966 to ¥34bn a decade later. In 1969 the trademark became the company: Hagoromo Kanzume.

Then the currency did the rest of the work. After 1973 the yen floated and climbed, and by 1978 it had broken well through ¥200 to the dollar; Japanese cans lost their price advantage abroad and the export packers were hit hard. When they turned back to the domestic market they found it already occupied. As one mid-sized Shizuoka packer put it, by the time we looked to Japan, Hagoromo had the channel. Revenue rose from ¥34bn in the year to March 1977 to ¥54.4bn by March 1981. To keep the brand fed, the company shed the assets it had accumulated — ironworks, woodworking, and later frozen foods and instant coffee — concentrating everything on one trademark. In 1986 the founder’s grandson Goto Yasuo became president; in 1987 the company took its present name, Hagoromo Foods.

Dominance turned out to be narrow. Tuna is a caught commodity, and in 1989 a jump in raw-fish costs cut profit by more than sixty per cent; the strong yen that had cleared the field of Japanese rivals now let canned tuna from Thailand and elsewhere in, first into food service and then into the home. Hagoromo answered by moving production toward the fish, setting up the P.T. Aneka Tuna Indonesia joint venture in 1991, and by building out logistics. But the underlying shape was unchanged: in the year to March 1993, fish cans were sixty per cent of ¥93.6bn in sales, and almost all of that was Sea Chicken. The brand held more than half of a market worth some ¥90bn — the second player, Inaba of Shizuoka, had about thirteen per cent — while new product launches ran at a flat twenty-five or so a year and no second pillar grew.

The capital structure was equally unchanged. Relations with Shizuoka Bank were good and borrowing covered what the business needed, so paid-in capital stayed under ¥100m. In 1993 chairman Goto Isokichi said plainly that separating management from capital would become necessary sooner or later, if the company was to buy the money and the people to start something new. Seven years later it did: on 9 February 2000, sixty-nine years after the cannery opened, Hagoromo Foods listed on the Second Section of the Tokyo Stock Exchange. At listing it held 53.8% of the tuna and skipjack can market and 34.0% of canned seafood overall.

What listing bought was a factory. The proceeds went into aseptic packaged rice — a ¥20bn market then, expected to reach ¥50bn within a few years — and the Sunrise plant opened in Yaizu in September 2000. It did not take. Parent-company sales slid from ¥81.4bn in the year to March 2001 to ¥70.6bn by March 2005, ordinary profit sat in single-digit billions, and headcount fell from 728 to 632. Five years after going public, the problem the company had named for itself — grow something other than Sea Chicken — was no closer to an answer on the product side. Ownership, meanwhile, stayed where it had been: foundations and an employee holding association tied to the founding family held close to half the shares.

If a new pillar would not grow, it could be bought. In January 2005 the board agreed to acquire Maruai and two affiliated firms — makers of dried bonito flakes and seasoned nori — for $40.4M (¥4bn), funded by ¥4bn of long-term bank borrowing. The deal came to Hagoromo from the seller’s side, Maruai’s president having no successor, and the price was below net assets, which produced ¥2.518bn of negative goodwill amortised over five years into non-operating income. The arithmetic worked as intended: tuna fell to about forty-five per cent of consolidated sales. The economics did not. Flakes and nori had been low-margin before the acquisition and stayed low-margin after it, and the brand and channel strength built on cans did not transfer to a business with different raw materials and a different route to the shelf. The sales arm was reorganised in 2010, Maruai was absorbed outright in 2017, and its Mie plant was written down in 2023.

The same year as the acquisition, the listing-funded plants were written down instead: an impairment of ¥2.574bn on the rice plant, the pasta plant and a distribution site pushed the year to March 2006 to a net loss of ¥1.209bn despite ¥81.9bn of sales. Then the fish itself turned. Over the two years from 2011, yellowfin rose by half and skipjack doubled, driven by canning demand in the Middle East and South America; skipjack at Yaizu went from ¥82 a kilo in 2003 to ¥192 over the first nine months of 2013. Hagoromo cut the trade incentives that funded supermarket promotions, promotions shrank, volume fell, and the company posted operating losses in the years to March 2012 and March 2013, with a net loss of ¥2.601bn in the latter. From May 2013 it did what it had avoided: the two small cans that made up sixty per cent of volume kept their price and dropped from 80 to 70 grams, and sixteen other lines went up ten to fifteen yen.

Management passed out of the family and then partly back. Goto Yasuo moved up to chairman in 2007 and Mizoguchi Yasuhiro became the first non-family president since 1931; Ikeda Kenichi, the chairman’s son-in-law, followed in 2015 and left in 2019 on health grounds; Goto Saeko has led the company since. She brought online the ¥4.8bn new Shimizu plant Ikeda had committed to, opening in October 2020, and moved the listing to the TSE Standard market in 2022. The commodity cycle came round again immediately — raw material and packaging costs turned the year to March 2023 into an operating loss of ¥1.133bn and a net loss of ¥1.320bn on ¥70.5bn of sales — before profit recovered to ¥2.849bn of operating income on ¥74.65bn in the year to March 2025. The current plan, aimed at the company’s centenary in 2031, keeps the name on the label and changes what is inside it: a soy-based Sea Chicken, hedging at once against the price of fish and against the pressure on the fishery itself.