Calbee is Looking for Consistent Potato Supplies

By the end of the decade, Calbee hopes to increase its domestic supply of potatoes from 320,000 tons to 400,000 tons by collaborating with growers all around Japan. The ambitious turnaround strategy for the corporation depends on consistent supplies.

“Weather is very, very important for us. So to avoid that kind of thing, we are now trying to increase the fields in Japan, other than [in] Hokkaido,” Calbee CEO, Makoto Ehara, told CNN.

The company's decision-makers also predict that Calbee may reduce by half the amount of potato imports it receives from America, its only foreign supplier.

According to Ehara, the company is also thinking about importing from other areas, like Europe, to diversify even more.

The last years have seen a plateau in Calbee's sales. To address this, the company declared in February that it will invest roughly USD1bn over three years on initiatives including automation and global expansion.

According to Keiei Sho, managing executive officer for Calbee’s overseas businesses, the company hopes to capitalize on the success in China that has been achieved with items like its South Korean-inspired honey butter chips. Sho said also that the business is optimistic about Indonesia because of its sizable young population and potential lifetime clients.

Up to 90% of Calbee's potatoes are normally sourced in Japan, with the northern island of Hokkaido providing 80% of that supply. The domestic potato supply of the company decreased by 8% and 14% in the 2021 and 2022 fiscal years, respectively, as a result of the region's devastation by drought in 2021. The remaining 10% of Calbee's potato supply usually comes from imports from the U.S., thus the company attempted to make up for the shortage by doing so. But it had little success.

The company, which had a profit of USD156m in the most recent fiscal year, sells these items for hundreds of millions of dollars each year.

Other than its longtime partner Pepsi (PEP)Co, which owns around 20% of the business through a subsidiary, Calbee sells more chips in Asia Pacific than any other company. According to data from Euromonitor International, Pepsi (PEP) holds roughly 24% of the region's potato chip market while Calbee has about 12%.