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Oct. 29, 2007, 12:01 a.m. EDT

From Curious Potion To Condiment That Could

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By Tomoko Hosaka

Kikkoman /zigman2/quotes/200008494/delayed JP:2801 -0.56% Corp. Chief Executive Yuzaburo Mogi remembers the blank stares when his company first took its hallmark product -- soy sauce -- from Japan across the Pacific 50 years ago.

Most Americans at the time had never seen, much less tasted, the reddish-brown potion now a fixture in supermarkets, restaurants and pantries across the country. But in the years since Kikkoman stepped into the U.S. market, Mr. Mogi has watched as soy sauce gradually transformed from curious outsider to culinary insider.

Call it the condiment that could.

Kikkoman today is the world's top producer of soy sauce and has expanded into a diverse, multicontinent enterprise with production bases in Japan, the U.S., Europe and Asia. Kikkoman's business also includes a wide lineup of food and beverages, health-food items, wholesale-food operations, as well as pharmaceutical and biotechnology-related products.

Although Japan still accounts for about 70% of its annual revenue, the company is aggressively channeling its global ambitions to drive future growth. Between 1974 and 2006, the volume of soy sauce Kikkoman sold outside Japan grew an average of 9.1% a year and continues to climb at a strong pace.

In the U.S. -- its first and biggest overseas market -- Kikkoman holds a leading 58% share of the soy-sauce business, which has boomed over the past two decades thanks to the growing popularity of Asian foods.

A key element of its marketing has been to tout the superiority of its soy sauce. While its main U.S. rivals use hydrolyzed vegetable protein instead of actual soy beans, Kikkoman says, it relies on an organic brewing process developed more than 300 years ago by Mr. Mogi's ancestors in Noda, near Tokyo.

Mr. Mogi, now 72 years old, has always been a maverick of sorts. From his early days with Kikkoman, he has pushed himself and the company to venture outside tradition and onto new paths, including the pivotal move in the early 1970s to build its first overseas factory in the northern U.S. state of Wisconsin.

In many ways, Kikkoman's fate in the U.S. is tied to a decision a decade earlier by a young Mr. Mogi to study business in New York. In 1961, he became the first Japanese to receive an M.B.A. from New York's Columbia University, and he credits the experience with shaping his worldview and understanding of what it would take for Kikkoman to succeed.

Tomoko Hosaka spoke with Mr. Mogi at Kikkoman's Tokyo office.

WSJ: Why did you decide to attend business school in the U.S.?

Mr. Mogi: I was in my second or third year at Keio University [in Tokyo]. One of Peter Drucker's books, called "The Practice of Management," was translated into Japanese. He wrote about management so clearly, and it was very easy to understand. I found American management fascinating and began to think about studying business in the U.S. Then a bit later, I took a course from a Prof. Whitehill from the business school at the University of North Carolina, who was in Japan through a professor-exchange program. What struck me was how practical it was. A Japanese professor would just lecture on who said what and what was written where, and it was pretty dull. So at that point, I really felt like I had to go to the U.S. to study.

WSJ: What did you learn in business school that was particularly useful?

Mr. Mogi: When we were in the process of building our U.S. factory, what I learned in business school definitely helped. Actually, if I hadn't gone to business school in the U.S., I think it would've been very difficult. And it became even more useful after I took over the entire company. They say that in two years of business school, you learn the equivalent of 10 years on the job. You learn about the internal operations of a company, as well as the decision-making process. So in my experience, business school has certainly proven useful over time.

/zigman2/quotes/200008494/delayed
JP : Japan: Tokyo
¥ 7,090.00
-40.00 -0.56%
Volume: 268,800
July 27, 2021 3:00p
P/E Ratio
47.21
Dividend Yield
0.63%
Market Cap
¥1368.76 billion
Rev. per Employee
¥57.48M
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