Company Overview
1. Company Overview
STI Food Holdings (2932) is a food manufacturer that uses fish and other marine materials as raw materials to produce and sell food and ingredients. The company mainly sells chilled side dishes such as grilled fish and rice ball ingredients like salmon flakes mainly to the major convenience store chain Seven-Eleven. The company's characteristics include a production capacity to mass-produce using high-quality marine raw materials sourced from trading companies and fisheries companies established inspection systems domestically and internationally, proprietary technology that pursues deliciousness and quality, and a production system that minimizes food loss by thorough temperature control (in three temperature zones: frozen, refrigerated, and room temperature), establishing a differentiated position that cannot be imitated by other companies. Amid a global trend of increasing fish consumption due to health awareness despite a decrease in fish cooking at home, the company aims to enhance long-term corporate value and achieve sustainable growth by pursuing contributions to the business through various functions related to raw materials, development, manufacturing, and intellectual property under a key policy of building a stronger corporate group.
Highly praised by Seven-Eleven for many years.
2. History
The company, founded by Yu Tomi, the current representative director and president, in December 1988, under the name of New Tokyo International Co., Ltd., was established for the purpose of exporting and importing sales of marine raw materials and seafood. Starting with the trading business of fresh products (export and import), gradually expanding its business, it began selling rice ball ingredients such as ikura and salmon for major convenience store chains. Seeking further differentiation, it entered the manufacturing sector and began the production of side dishes utilizing factory facilities obtained through business transfers. Although the performance continued to grow steadily, amidst increased capital requirements such as factory equipment investments, the appreciation of the yen due to the Lehman Shock led to significant losses in foreign exchange reserves, deteriorating cash flow, and eventually led to the application for the Civil Rehabilitation Law in April 2010.
However, in September 2010, Kyokuyo (1301), which had been focusing on New Tokyo International's sales channels and production technologies, became a sponsor. Kyokuyo's consolidated subsidiary STI Co., Ltd. took over the production division based on the civil rehabilitation proceedings. On the other hand, as Seven-Eleven, which had already become a major sales channel, highly valued the company's technological capabilities, the company was able to continue trading, thanks to revolving funds and other factors, leading to a smooth recovery of business performance and further expansion. In April 2013, STI Co., Ltd. was absorbed into the wholly-owned subsidiary of New Tokyo International, New Tokyo Food Co., Ltd., and in November 2017, the company was established as a holding company overseeing the food manufacturing and sales business. In January 2018, New Tokyo Food was split, transferring some business units and management departments to the company, with performance continuing to grow steadily. In September 2020, it was listed on the Tokyo Stock Exchange (TSE) Second Section. It has since transitioned to the TSE Standard Market, with Kyokuyo and Seven-Eleven's operating company, Seven-Eleven Japan Co., Ltd. (a subsidiary of Seven & i Holdings, 3382), each continuing to hold 8.44% of the total issued shares (as of the end of December 2023).
Among ready-to-eat meals, chilled seafood side dishes continue to show strong growth.
3. Trends in the prepared food market
Due to the decreasing consumption of food by the Japanese people caused by the declining birthrate and aging population, it is said that the prepared food market to which the company belongs has expanded to a scale of over 10 trillion yen. The prepared food market used to be centered around delicatessen stores, but now convenience stores, food supermarkets, and takeout dining have been expanding their share. Among these, rice dishes such as onigiri and bento boxes from convenience stores like Seven-Eleven have become the mainstream of prepared food, backed by convenience and product development capabilities. With the "stay-at-home demand" during the COVID-19 pandemic, when the reduction in "office demand" and "outing demand" led to a plateau in prepared food demand, the need for chilled prepared foods packed with side dishes expanded in the prepared food market due to the convenience needs of long-lasting properties and single-person or small family households. As the movement restrictions of the pandemic are eased, the demand for the company's onigiri fillings has recovered, while the demand for chilled prepared foods has struggled to grow alongside the decrease in "stay-at-home demand." However, the company's chilled prepared seafood dishes continue to experience strong growth as there is a persistent demand based on health consciousness, and the introduction of new technologies continues to enhance the added value year after year.
Chilled prepared foods have been long-life preserved by advancements in sterilization and static germ reduction techniques.
(Author: FISCO guest analyst Nobumitsu Miyata)
