While overall sales generated by Tokyo, Japan-headquartered Ajinomoto Co., Inc. slipped by 1.4% (¥3.4 billion) to ¥538.7 billion from April 1 – September 30, 2019, in comparison with the like period in 2018, business profit increased by 7.8% (¥3.4 billion) to ¥48 billion.
The downturn was attributed to the negative impact of the spread of African swine fever on animal feed sales, while the uptick was due in large part to substantial increases in profits realized from sales of umami seasonings to processed food manufacturers and retail frozen food products sold both in Japan and abroad.
In the Japanese market, frozen foods and coffee business segment profits lifted overall profits by ¥2.3 billion (+18.7%) to ¥14.7 billion.
Commenting on frozen food sales in Japan in a report issued to shareholders on November 6, Ajinomoto stated:
“Sales of home use product increased as the gyoza series and cooked rice continued to perform well. Restaurant and industrial use product volume decreased due to the effect of factors including the decrease in sales promotion for some items compared with the same period of the previous fiscal year, although sales of desserts, gyoza and other mainstay categories expanded. Overall, sales were basically unchanged from the same period of the previous fiscal year.”
Profits for seasonings decreased due in part to expenses associated with the acquisition of More Than Gourmet Holdings, Inc., while frozen food profits increased significantly owing to increased sales of products consumed at home, higher prices received for restaurant and industrial use products, and improvement in productivity.
Outside of Japan, international frozen food sales decreased overall due to currency translation and the sale of Amoy Food Ltd., though sales of Asian food products continued to grow in North America and Europe. Profits were up substantially, however, thanks to selling price increases and improved productivity in the United States.
On the overseas ingredients business front, umami seasoning sale and profits to food processors rose on the wave of higher volume and cost reductions.