Nestle Japan, Itochu and Yayoi form frozen food alliance

Nestle Japan Ltd, Itochu Corp. and Yayoi Foods Co have formed an alliance in frozen food production and announced a possible financial venture in the future.

The partners will spend 1 billion yen (US$9.26 million) to build production lines dedicated to making Nestle's Buitoni brand of frozen foods at two Yayoi Foods factories—one in Miyagi Prefecture and one in its home prefecture of Shizuoka. Nestle Japan will sell some of the output for home use, while Yayoi Foods will sell the rest for commercial purposes. Itochu will help to procure ingredients. The three companies aim for annual sales of 10 billion yen in three years.

Nestle Japan has consigned local production of frozen foods to Yayoi Foods since 1998. It plans to significantly expand its domestic business through the alliance. For Yayoi Foods, which is strong in commercial-use frozen foods, the tie-up with parent company Itochu and Nestle Japan is said to offer the advantage of stable production.

Edited by Scott Hegenbart