Snow Brand Milk Products Company, Limited Business Information, Profile, and History

History of Snow Brand Milk Products Company, Limited

After sparking a revolution in Japanese eating habits, tastes, and nutrition, Snow Brand Milk Products Company, Japan's leading butter and cheese producer, has pursued an expansion program that now includes meat products, convenience foods, wine, and pharmaceutical goods. Snow Brand operates a chain of restaurants, a research-and-development center for new products, and a marketing information network.

Vegetables, rice, and fish had been the traditional Japanese diet for centuries before the late 19th-century move to colonize Hokkaido, the northernmost of Japan's four main islands. Like the others, Hokkaido is bisected by a mountain range, with little flat, arable land. Unlike the rest of Japan, however, Hokkaido's climate is too cold to grow most vegetable crops or rice profitably. But its verdant slopes did offer ample pasture land. Hokkaido's pioneers brought dairy cattle with them and succeeded in producing a fine grade of milk. But for decades the market was too limited for these farmers to do much more than supply their own needs from their herds and small gardens.

The winter of 1920 was particularly severe; storms damaged fodder and frigid weather diminished herds. To add to these troubles, the post-World War I recession reached Japan in the early 1920s. Hardships multiplied until the spring of 1925, when a group of Hokkaido's hard-hit dairy farmers formed a cooperative association and began to formulate a survival plan. On May 17, 1925, the Hokkaido Dairy Cooperative was formed with 629 members.

Torizo Kurosawa, the cooperative's managing director, had noticed the difference milk had made in the nutrition of the local farmers. He spearheaded what was then a daring plan: to produce two heretofore exclusively Western products--butter and cheese--and market them throughout the country. By July, butter was in production, and by October, the butter-marketing program was in full swing. Due in part to the fact that the entire economy had improved and continued to flourish for most of the decade, the plan succeeded.

By the following September, sales were so brisk that a new factory was built in Sapporo; today it is the site of the company's registered office. The Snow Brand trademark was first used in December, 1926.

Two years into butter production, the cooperative dared to introduce another Western product: ice cream. It, too, quickly achieved popularity.

The cooperative finally got around to the production of cheese in 1933, and as different varieties were successfully introduced to the Japanese, additional kinds were made. Today, the company makes more than 60 varieties.

Representatives of the group studied dairy-farming methods in several countries and decided to use Danish dairy farming as a guide. They realized that to keep the cooperative's growing variety of milk products uniform in quality, basic milk production methods also had to be kept uniform. To ensure that all members used the same methods to produce top-quality milk, the cooperative established a training program for young farmers, the Hokkaido Dairy Farming School, in 1934.

By 1935, the cooperative's products had achieved popularity throughout Japan, and a new marketing effort was launched to export them. It began with a butter shipment to London in November, and eventually proved successful for all products.

Japan's government, too, was pursuing expansionist policies. Having created a puppet state in Manchuria in 1931, Japan invaded China in 1937, alienating the Western democracies recently opened as markets by organizations such as the dairy cooperative. With foreign markets limited, the group turned its attention to expanding the variety of its products, and established the Dairy Science Research Institute in 1937.

The Hokkaido Dairy Cooperative had started several new businesses in the next few years: meat processing, margarine production, leather goods, and the manufacture of special farming equipment. The group also went into the land improvement business. Even with the privations and losses of World War II, the group, which was reorganized in June, 1941 as Hokkaido Rakuno Kosha Company, continued to expand.

In the wake of Japan's defeat in World War II, the size of the conglomerate was considered detrimental to the recovery of other Japanese businesses, and in 1948 legal steps were taken to prevent the formation of an economically overpowering cartel. A major reorganization took place, and Snow Brand Milk Products Company, Limited was established to succeed the cooperative in June, 1950. Each of the entities that had formerly made up the conglomerate became an independent subsidiary.

Within the decade, Snow Brand established additional subsidiaries in Tokyo and Osaka to handle the fluid-milk business and took over the milk and milk-products business of local dairy cooperatives in several other locations. Another reorganization in 1958 rejoined Snow Brand with Clover Milk Products Company (formerly the Hokkaido Butter Company), from which it had separated in 1950. In 1966 Snow Brand's headquarters moved to a new building in Tokyo.

Snow Brand continued to expand, adding new products and new subsidiaries to handle them: frozen foods in 1971, seasonings in 1973, and in 1981 powdered milk for aquatic mammals, a special formula for infants with metabolistic defects, and oat products. The company also began to enter into productive business relationships with other companies both in Japan and abroad. Snow Brand established a joint venture in 1972 with Murray Goulburn Snow in Australia, and began to sell wine in 1974 under contract with companies in five European countries. In 1981, Snow Brand bought Chateau Grower Winery Company and started its own wine production. An additional facility, Snow Brand Belle Foret Winery, has been in operation since 1985. Through a tie-up with Stokely-Van Kamp, the company has been selling Gatorade, a popular sports drink, since 1980. A joint venture with the Pillsbury Company in 1981 resulted in the establishment of Snow Brand Pillsbury, Inc. in Japan. Snow Brand also has agreements with the Quaker Oats Company (U.S.), Melkunie-Holland (Netherlands), Molkerie-Zentrak Sud GmbH. (West Germany), Valio-Finnish Co-operative Dairies' Association (Finland), and Industria Gelati Sammontana (Italy).

In 1983 Snow Brand established the Embryo Transplantation Laboratory, with facilities for cryogenic storage, where bisected high-grade cattle embryos are transplanted and sex is determined through prenatal tests. Further steps to improve herds are made by veterinarians on the dairy farms, which have spread from Hokkaido to the northern portion of the neighboring island of Honshu, as they provide advice on cattle breeding, milk production, and handling. Processing plants are highly mechanized for quality control.

Biotechnology research concerned with gene control, cell fusion, and tissue culture is carried on in Snow Brand's Research Institute of Life Sciences, also established in 1983. Research helps develop new foods, such as varieties of yogurt, as well as pharmaceutical products. A medicine for senile dementia is under development in cooperation with an Israeli biochemical institute, and Snow Brand is currently working on an anticancer drug. The pharmaceutical products planning department, started in 1981, examines technical studies in connection with analyses of market needs.

Snow Brand's health-food line has expanded throughout the 1980s, responding to growing public concern with fitness and nutrition. The company's infant formulas and follow-up formulas, basic to the line, are popular not only throughout Japan but also in southeast Asia and the Middle East. In 1985 the company opened its Health and Nutrition Institute, which publishes dietary advice in a periodical called Health Digest.

The company's ongoing concern with nutrition and fitness has led to encouragement and sponsorship of sports activities. In 1960 the first Snow Brand Cup All-Japan Ski-Jumping Competition was held, now an annual event. The Snow Brand ice hockey team was formed in 1979. A year later, the company opened an ice skating center. In 1983 the Snow Brand Field Athletic Cup was established. And each year, the company supports the Snow Brand Cup National Invitational Little League Competition.

The 50th anniversary of the founding of the cooperative dairy group was celebrated with the opening of Snow Brand Historical Museum in Sapporo. The innovative and expansionary policies of the company's early developers are adhered to just as consistently today. Biotechnology and computerization provide new directions for product development and quality control. Snow Brand's General Institute for Dairy Farming, founded in 1976, and its Cheese Research Laboratory, opened in 1979, are just two groups working to provide improvements to tomorrow's cuisine. And the palates they are planning on pleasing aren't limited to Japan--their expansion plans are made in terms of a worldwide market.

Principal Subsidiaries: Hokushin Milk Products Company, Limited; Sendai Snow Ice Company, Limited; Ibaragi Snow Brand Milk Company, Limited; Yatsugatake Snow Brand Milk Company, Limited; Fancy Ice Company, Limited; Showa Milk Company, Limited; Gumma Snow Brand Milk Company, Limited; Snow Brand Rolly Company, Limited; Shizuoka Snow Brand Milk Company, Limited; Sapporo Yukihan Company, Limited; Doto Yukihan Company, Limited; Tokyo Snow Brand Sales Company, Limited; Nagasaki Snow Brand Milk Sales Company, Limited; Saga Snow Brand Milk Sales Company, Limited; Snow Brand Bussan Company, Limited; Nikijima Shoji Company, Limited; Shimaya Shoji Company, Limited; Snow Brand Shoji Company, Limited; Sugino Shoji Company, Limited; Umeya Company, Limited; Snow Brand Seed Company, Limited; Snow Brand Hokumo Transportation Company, Limited; Hokkaido Snow Brand Transportation Company, Limited; Tohoku Snow Brand Transportation Company, Limited; Meisetsu Transportation Company, Limited; Kansai Snow Brand Transportation Company, Limited; Snow Brand Food Company, Limited; Snow Brand Parlor Company, Limited; Kansai Snow Brand Parlor Company, Limited; Snow Brand Snowpia Company, Limited; Research and Development Center for Dairy Farming; Hokkaido Nozai Kogyo Company, Limited; Snow Hall Company, Limited; Snow Brand Children's Farm Company, Limited; Rakumosha Company, Limited; Hokueisha Company, Limited; Chesco Company, Limited; Bull Mart Company, Limited; Japan Milk Products Trade Company, Limited; Snow Brand Belle Foret Company, Limited; Snow Brand Pillsbury, Incorporated; Toyo Reinetsu Company, Limited; Nippon Port Company, Limited; Ueda Oil Refinery Company, Limited; SN Food Research Institute Company, Limited.