Heinz & Kagome form strategic alliance

On July 26, the American branded food company H. J. Heinz Company and the Japanese food company Kagome Company Limited signed agreements for a strategic alliance whose goal is to enable both companies to explore ways to align their global operations and product portfolios to accelerate sales growth and reduce operating costs. According to the companies, this should improve growth by sharing Kagome's expertise in sales and distribution within Japan and by leveraging Heinz's global brands. Heinz​ is the world's number-one producer of processed tomato products; Kagome is the top tomato processor in the Pacific Rim. Heinz Japan has a foodservice business as well as a growing retail business in frozen meals and snacks and Heinz ketchup and sauces. Kagome has leading market positions in condiments, tomato juice, vegetable juice, barley tea and carrot juice. William R. Johnson, chairman, president and CEO of Heinz said: "The Heinz/Kagome strategic alliance combines the management expertise and capability of two of the best food companies in the world. Japan represents the second-largest food market in the world and Kagome is the number-one food brand in Japan."​ Mr. Masatsugu Ito, president of Kagome, said: "Heinz has the global reach that will allow us to achieve our dream of bringing Kagome products to consumers all over the world."​ Under the alliance, Heinz and Kagome have three immediate projects: a joint study of new business opportunities in North America; a management services agreement in Japan; and consideration of joint development opportunities in new geographic markets. The two companies are also considering a mutual investment. Kagome has made an allotment of approximately 5 per cent of its shares to Heinz, with a subscription deadline of January 31, 2002. If subscribed to, the proceeds of this investment would be used by Kagome to invest in new shares of Heinz Japan.