Founded nearly three-quarters of a century ago, snack manufacturer Calbee has a strong presence in Asia—especially in its home country. “Every one out of five potatoes produced in Japan more or less goes into a Calbee snack,” says Ryo Tsutsumi, CEO, Calbee America, Inc. “That's amazing.” Tsutsumi says globally, Calbee pulls in about $2.5 billion USD in sales each year, with about 75% of revenue coming from Japan.
However, while the North American market accounts for a relatively small portion of the company’s revenue, the Calbee America team has ambitious plans for growth, which are already in motion. These recent successes, innovative product launches, and commitment to quality, are why Snack Food & Wholesale Bakery is happy to salute Calbee America as 2023 “Snack Producer of the Year.”
Beginning and growing
Calbee began in Japan in 1949, founded by Takashi Matsuo. The company brought its first product, Shrimp Chips, to U.S. consumers in 1970. American consumers now most likely know Calbee America, Inc. through its flagship brand, Harvest Snaps, a pulse-based extruded snack with a unique home in retail stores: the produce section, nestled among the fresh vegetables and fruit.
— Ryo Tsutsumi, CEO, Calbee America, Inc.
In recent years, Calbee America, Inc. has seen growth in sales and a surge of innovation. Tsutsumi—who has been with Calbee since 2020 and was promoted to CEO last year—says he has noticed significant strides over the last 24 months.
“We’ve been able to go back to the fundamentals, revisiting who our consumers are, why they want to buy our products—focusing on the true, core values that we’re providing to our consumers in the U.S.”
Sandra Payer, head of marketing for Calbee America, Inc., says the company managed to elevate its flagship Harvest Snaps’ products to greater sales through a number of efforts, including a brand refresh and modern new look for the packaging.
“That’s something that I'm definitely proud of,” Payer remarks. “The refresh was a game-changer that happened in conjunction with the launch of innovations that meet consumer needs. Harvest Snaps really puts the consumer first in everything we do. That’s our recipe for success.”
Before Tim Bateman was recruited to serve as senior vice president of sales and marketing with Calbee America, Inc., he held positions at a number of other CPG companies. One snack producer he worked at was envious of Calbee’s unique position in the produce section.
“We wanted to try and take a page out of [Calbee’s] books,” Bateman confided. “We ran into a brick wall because the buyers were so happy with the success of Harvest Snaps. The products were selling, and they didn't really want to confuse the consumer too much by trying to build out a big section of vegetable-based or fruit-based snacks in their store because they were happy with what they had.”
His former company also tried to duplicate the success of Harvest Snaps—literally—they tried to recreate the product, but reportedly fell short.
“The way we produce Harvest Snaps is very unique,” Bateman explains. “At my other company, we tried to make a snappy crisp—and couldn't do it. We purchased green pea powder instead of getting dried peas in and milling them ourselves, and we didn’t go in to control the moisture levels. That's what really makes our Harvest Snaps better than everybody else's: The way we handle the quality and take care to have just the right moisture level, produces a much better, crunchy product.”
Payer says Harvest Snaps resonate with U.S. consumers because of the natural, healthful appeal.
“Better-for-you is part of the Harvest Snaps DNA,” says Payer. “As the brand owner for Harvest Snaps, we are super proud that the first ingredient in our product is always nutritious green peas, beans, or red lentils. These core ingredients are very nutritious and promote a healthier lifestyle, making the products very much on trend. ”
“Calbee as a company is taking great pride in producing high-quality products—that is actually the mantra above everything we do, across our entire portfolio of brands, and it dates back to Calbee’s fundamental values when we started in 1949,” Payer shares. “Mr. Matsuo launched shrimp chips with a vision to create a snack that was nutritious and tasty and healthy for the Japanese people right after World War II, when there was a lot of malnutrition in the country.”
The focus on health, Payer says, is how the company got its name—“Cal” as in “calcium,” and “bee” as in “vitamin B1. These essential nutrients were part of Calbee’s first product, the Calbee Caramel, and also the shrimp chips that followed.
“Something else we are very proud of is that we source whole veggies,” states Payer. “That allows us to, on one hand, maximize the taste because we use the whole veggie in our product. At the same time, it allows us to control the quality because we know exactly what's going into the product.”
Tsutsumi says that while challenges like labor struggles through the pandemic have been formidable, fostering communication, keeping communication lines open, and emphasizing quality work have helped Calbee America, Inc. weather the storms.
“We make sure that we deliver good, quality work, not just products,” Tsutsumi says. “Once we start focusing on that, people are prouder of the outcome, which makes them proud of what they do. They're more motivated to stay with us or come to work with us. The team has really stuck with me and walked along with me on that journey. At the end of the day, when you deliver good quality, consumers react to it.”
According to Tsutsumi, Calbee’s pursuit of quality focuses more on technique than technology.
“The technology we use is quite simple; we use basic production methods, such as frying, baking, vacuum-frying,” he says. “Because it's all about getting to that right crunch, we combine different components on a lot of our snacks, and a lot of that is embedded in the philosophy of Japanese craftsmanship.”
“When people talk about Japan, people relate to it as really high-tech, but the way I think Calbee has been able to differentiate the company from competitors is in the context of being very focused on delivering exciting crunches through a craftsmanship mentality,” he continues. “That's the tenet of the business to grow moving forward here in the U.S.”
To further help ensure consumers react positively to products, Calbee America, Inc. keeps tabs on consumers’ needs and interests.
“We work very closely with the consumer in everything we do,” Payer says. “Before we launch a product, we run concept tests. Is it something that the consumer really cares about? Then we run product tests. Does the product meet expectations? The benchmark is superior quality, so we make sure we get feedback directly from the consumer. That definitely helps in increasing the chance that innovations are going to be successful.”
Calbee America, Inc. also uses the feedback to course correct when necessary—for example, the consumer check-ins helped the company adjust the messaging around Harvest Snaps.
“What we found out is that we need to be more straightforward in terms of communication—less is more in the way we talk to the consumer. We put a lot of emphasis on that we are a better-for-you brand and sometimes didn’t balance that with the fact that we are also a delicious, tasty snack—at the end, it's all about taste.”
By repositioning Harvest Snaps with an updated design and streamlined on-pack messaging, we took an approach that was “less rational and more emotional” to revitalize the brand. The end result, she says, was successful, resulting in double digit growth.
Calbee also has pivoted on packaging to meet changing consumer behaviors and needs. For example, they launched a mixed snack pack, a “bag-in-bag” consisting of single-serve Harvest Snaps products packaged together in a larger flexible package.
“We clearly saw the demand for a single-serve bag, especially following the pandemic,” she explains. “People still don't feel safe in sharing a bag and having hundreds of fingers in it, so we came up with a bigger bag with smaller bags of mono portions that you can share with friends or work colleagues, and they’re also convenient for on the go. Interest in individually packaged snacks that can travel well is a trend we observed, and we translated this into an innovation.”
Salty snack strategy
Calbee America, Inc. has its sights set on expanding its presence in the salty snack aisle. According to Bateman, Harvest Snaps’ success in its perimeter position is proving helpful in paving the way.
“Harvest Snaps has a reputation—we have velocities that are really good. I'll give you a great example. We were talking to Kroger the other day, and this national grocery retailer was asking about some of the velocities on our best-selling item, which is Harvest Snaps Lightly Salted, 3.3 ounces. He was very surprised at how high it was—he actually said that would rank 20th in the whole salty snack aisle.”
In 2022, the company launched Harvest Snaps Selects, a product made with navy beans as the first ingredient. The new line builds upon Harvest Snaps’ better-for-you positioning and pulse-based recipes with a curved shape that encourages consumers to scoop up hummus or other dips. Calbee also introduced Crunchy Loops, made with red lentils in a fun ring shape for extra crunchy texture.
Bateman said the company’s reputation for quality and reliability also might help Harvest Snaps Selects, Crunchy Loops, and future salty snack launches gain space in the aisle.
“We're delivering products to these retailers already and have been for five to 10 years in some cases,” he says. “We have a solid track record.”
Calbee America, Inc. also manufactures its own snacks, which is another edge over other producers playing in the space, Bateman explains.
“Most brands, especially in the emerging brand space, are all copacked. When the pandemic hit, those companies were impacted negatively because they couldn't produce for themselves,” he says. “That we produce our own snacks gives us a leg up when we launch new items and build out more space for our products.”
Before joining Calbee America, Inc., Bateman knew about the company’s history and reputation, but he says he wasn’t fully familiar with Calbee’s full product range back in Japan, except for Shrimp Chips.
“I knew that they were a Japanese company, but I really didn't know too much about their other brands,” he admits. “I came here and realized that we actually have a goldmine sitting under us.”
The goldmine Bateman refers to is Calbee’s long list of snack brands that are well-known to consumers in Japan and other parts of Asia but far less familiar to American snackers, including super-crunchy JagaRico potato sticks, Shrimp Chips, granola blends, and others.
“One of the things you're going to see over the next year is a really big push for our products that are popular in Japan,” Bateman says. “We're going to continue to do great things with Harvest Snaps and Crunchy Loops, but there are also exciting products that are just ready to explode in the ethnic aisle, and ultimately in the salty snack space, with our legacy brands.”
Bateman sees a key component to building up the Calbee legacy brands, as well as new product launches, is encouraging the company’s staff to forge relationships with retailers, buyers, and other potential partners.
“I'm really trying to get the sales team to understand how to navigate into different departments, and work together to find different brokers to handle some of those different products,” he relates. “I’ve spent most of my time as a sales manager, so I know exactly what it’s going to take to succeed at retail. When setting up a new product launch, we will tackle each retailer to find a program that works. Collaboration is my role with sales and marketing.
The existence of all the legacy-brand products, Bateman says, means the Calbee America, Inc. team has less of a need to craft brand-new products to increase its U.S. presence.
“I don't think we need to be that innovative in the States, because they've already done it in Japan, he states. “Calbee has about 200 items, at least, to choose from until we find the winners for the American consumers. We will be able to share a variety of things for years to come. I don't think we'll run out.”
The Calbee America, Inc. reputation, Bateman says, also is helpful in the plan to get conversations about the range of legacy products originating in Japan and move such products from the ethnic section to the salty snack aisle.
“At a major mass merchandiser, we were not the vendor of record on any of our legacy brands—our distributor was,” he says. “Having Harvest Snaps under the Calbee portfolio really helps us; we can combine those other legacy brands on top of the core and have the credibility of being able to ship on time which improves or logistic scores with our retailers. We can now talk about those brands with our retailers this year, which is something we haven't been able to do in the past.”
Finally, Bateman says, the company plans to continue to work hard to grow and innovate both with what we create and what we bring to market —and about Calbee America, Inc.’s Snack Producer of the Year recognition he remarks, “These types of things obviously are very great to see and hear because it validates what we're doing. It's a good place to be.”