Japanese conglomerate Mitsui & Co. has recently made two significant moves; one in the U.S. and a second in Vietnam.
Mitsui in Massachusetts
In the later days of January, the group partnered with Japanese food manufacturer KENKO Mayonnaise Co. to fully acquire prepared foods company Hans Kissle Company, for a total approximate investment of $108 million.
The deal was conducted through a special purpose company, MKU Holdings – of which Mitsui owns 80 percent, and KENKO Mayonnaise owns the remaining 20 percent.
Headquartered in Haverhill, Massachusetts, and founded in 1984, Hans Kissle develops, manufactures, and markets a range of high-quality, wholesale deli main and side dishes, and lines of prepared foods that are sold through supermarkets throughout the Northeast region of the U.S.
This acquisition expands Mitsui’s offerings of value-added, prepared foods, and strengthens its standing in the large and rapidly growing U.S. market.
Driven by shifts in consumer tastes, population growth, and a desire for more convenience in the face of changing lifestyles, Mitsui said that the U.S. prepared food market is growing at around 8 percent per year.
Indeed, prepared foods was the top growing food category of 2017, according to data from Nielsen, which found that the category grew by nearly 140 percent that year to a value of $36 million. In second place that same year, ranked by sales, was combo meals, which are also considered prepared foods – seeing 68.9 percent growth and a value exceeding $153 million.
Underlying these figures, reported Nielsen, is the fact that sales of food eaten outside of the home have exceeded sales of foods eaten at home for the first time, while consumers turn away from fast food options in favor of more healthy choices, and quick-casual dining locations in favor of more convenience.
As such, Mitsui has marked “Retail Services” as a strategic growth area in its Medium-Term Management Plan announced in May 2017. Amid this market landscape, Mitsui plans to reinforce Hans Kissle’s market position, expand its reach, its channels, and its territory as the U.S. food market continues to evolve.
Shrimp in Vietnam
Within weeks of its investment in Hans Kissle, Mitsui announced another large play in food, investing $100 million in Minh Phu Seafood Corporation, the largest vertically integrated shrimp processor and exporter in Vietnam.
This is not Mitsui’s first investment in Minh Phu. In October 2013 the group worked with the company on the management of its affiliate Minh Phu Hau Giang Limited Liability Company (MPHG), in which Mitsui now holds a 31 percent stake through a third-party allocation.
Minh Phu has operations that span the entire shrimp supply chain from farming and rearing, to processing and exporting. Last year the company realized a net profit of US$44.78 million – reflecting a 44 percent increase over the prior year. Expectations for this year are that the company will see total production of 77,400 tons, creating turnover of $850 million, and pre-tax profits of US$100 million, of which US$86.95 million will be generated by its exporting business.
In addition, Vietnam’s shrimp exports are expected to grow to a value of more than US$4 billion this year, driven by new trade agreements, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). Of this value, shrimp exports are expected to be valued at $1 billion.
With such strong numbers behind it, the company in on the cusp of a U.S. expansion. Under the plan, Minh Phu will be building two 10,000-pallet, refrigerated warehouses in Los Angeles and New York, in conjunction with its main port. The two additional warehouses are to ease congestion and handle overflow, as the company’s current warehouses in the U.S. are to capacity, slowing the import of more product.
The company is also planning for its domestic expansion, with the construction of a breaded shrimp processing plant with annual production capacity of 40,000 tons, on land at its Minh Phu Hau Giang facility.
-Lynda Kiernan