Betting on North America — and localizing completely (1989)

Winning abroad by not selling Japan

The value of Toyo Suisan’s American move lay less in going than in how completely it adapted once there. It set up Pack Maru INC in Washington State in 1987 and Maruchan Virginia on the East Coast in 1989, entering just as Nissin was struggling in the United States with largely Japanese-style flavours sold as one global product. Toyo Suisan did the opposite: it tuned Maruchan ramen to Mexican-American tastes — spicier Ramen Picante, quick single-serve bowls — and sold them through the stores those households actually used, until instant ramen became a fixture of everyday Mexican-American cooking rather than an imported novelty. It won not on being first, but on refusing to sell Japan to people who wanted something of their own.

The payoff was a profit structure with no equivalent among Japanese food makers: by the mid-2010s the overseas noodle business earned an operating margin nearly double the domestic one, and Toyo Suisan is often called the only Japanese maker whose overseas noodle business out-earns its home market. Yet the same concentration is now the exposure. The profit engine sits in a North American retail market convulsed by mergers and closures, carried on aging plants and a weak yen — which is why the company, cautious on capital spending for decades, is finally emptying part of its cash pile into a new California factory to defend a lead that almost no one in Japan knows it holds.