Ajinomoto

1907–1944: Origins and expansion

Ajinomoto Co., Inc. was created in 1908 as a subsidiary of Suzuki Pharmaceutical Co., Ltd., which was founded in May 1907 by Saburōsuke Suzuki II and Kikunae Ikeda. Ajinomoto was created to let Ikeda, a professor at Tokyo Imperial University, sell monosodium glutamate (MSG) seasoning made from wheat that he invented and patented. He created the seasoning after discovering that MSG was the source of a flavor that he called umami. In April 1909, Ajinomoto presented Ikeda's seasoning under the brand name "AJI-NO-MOTO" at a new product exhibition event in Tokyo,[5] and began selling the product the next month.[6] Ajinomoto primarily marketed the seasoning to housewives by using their trademark, a housewife in an apron, in newspaper advertisements, on signboards, and on-ground stamps.[3][6]

Output gradually increased from 4.7 tons in 1910 to 23.3 tons in 1913, with sales reaching 400 thousand yen. In 1914 Ajinomoto built a new factory in Kawasaki to expand its production of flavoring.[7] Japan's improved economy after World War I resulted in output hitting 84.6 tons and sales reaching 1.5 million yen in 1918. Despite rising sales, Ajinomoto experienced a deficit during its first ten years due to altering its methods of production and lowering its prices to get its product into ordinary households, among other reasons. Because of rising Japanese exports after World War I, Ajinomoto opened offices in New York and Shanghai in 1917 and 1918, respectively. In 1918 Ajinomoto exported 20.5 tons of its seasoning, accounting for a quarter of its total sales.[6][7] The company opened new offices in Singapore and Hong Kong in 1927 and in Taiwan in 1929 to distribute its product throughout Southeast Asia. Between 1920 and 1929, revenue from the seasoning's sales rose from nearly 3 million yen to 10 million yen, largely due to increased exports of the product to foreign markets.

To lower the cost of mass production, the seasoning's wheat was replaced with soybeans, as the price of the latter at the time was lower than the former's.[6] In the United States, the seasoning, labeled by the FDA as a "Vegetable Protein Derivative", sold poorly on the consumer market, but Ajinomoto expanded their operations in the United States in 1931 due to mass orders of the seasoning by H.J. Heinz, Co. and Campbell Soup Co. Between 1931 and 1937, seasoning production increased from 1,077 tons to 3,750 tons, with revenue rising from 13 million yen to 27 million yen. Due to Japan's increasing isolationism in the late 1930s,[8] the production of AJI-NO-MOTO decreased from 3,750 tons in 1937 to 2,339 tons in 1940.[9] By 1942, production of the seasoning was reduced to 1,000 tons before completely stopping by 1944 due to World War II.

1945–1979: Post-war Japan and diversification

After World War II, Ajinomoto was slow to resume production of its seasoning as it lacked sufficient funds to continue production and its factory had been destroyed. In April 1946, the company changed its name to Ajinomoto Co., Ltd.[5] In 1947 production of the seasoning resumed, in addition to the production of new food products such as nucleic acid-based seasonings and processed foods. In May 1949 Ajinomoto was listed on the Japanese stock exchange. By 1950, exports accounted for 95% of the company's revenue,[9][6] with exports to Southeast Asia, Europe, and the United States increasing in subsequent years.[10] In Europe, AJI-NO-MOTO was used as a seasoning by many processed food manufacturers, including Maggi and C.H. Knorr AG. In 1950, sales in Japan resumed after the lifting of postwar sales controls,[7]

1980–2009: Expansion globally

As the Japanese economy worsened in the 1980s, Ajinomoto sought to outsource more of its production overseas, which increased the number of employees the company employed overseas from 4,000 in 1979 to more than 11,000 in 1996. Starting in 1980, Ajinomoto began to refocus its diversification efforts from food products to its amino acid business. Following the US FDA's re-approval of aspartame in 1981, Ajinomoto began producing the sweetener at its Tokai factory in 1982. In 1987, Ajinomoto began researching drug development in the fields of clinical nutrition, anti-cancer drugs, infectious diseases, and cardiovascular drugs. Through this research, the company developed ELENTAL for use in clinical nutrition, LIVACT to fight liver disease, and Lentinan in collaboration with the Japanese Foundation for Cancer Research. Ajinomoto later released JINO as a cosmetic and amino acid for athletes, followed by Amino Vital, a supplement to JINO released in 1995. In 2000, Ajinomoto acquired NutraSweet and Euro-Aspartame from Monsanto.[12]

In April 2002 Ajinomoto reorganized itself into food, amino acid, and medicine divisions, and owned subsidiaries for frozen foods, fats, and oils. In February 2003, Ajinomoto and Unilever completed a joint venture agreement in six countries and regions of Asia. Because of this, Ajinomoto launched the brand VONO to replace its use of the Knorr brand, and in the process established its own brand identity.[6] In July 2003, Ajinomoto bought the French company Orsan from the UK-based Tate and Lyle Group, renaming Orsan to AJI-NO-MOTO Foods, Europe.

Since 2010: Expansion and restructuring

In 2010, due to a rise in foreign competition, Ajinomoto began restructuring to focus on several of its products while divesting others. The company divested its Calpis beverage unit in Japan in 2012,[14] the Ajinomoto Sweetener Company (France) in October 2015,[15] and Amoy Food (China) in November 2018.[16] Ajinomoto decided to focus on its food and biomedical divisions, and acquired the contract manufacturing organization Althea Technologies (US) in 2013,[17] the frozen food company Windsor Quality Holdings, Inc. (US) in November 2014,[18] and the frozen food company Lavelli・Terrell・Smile (France) in November 2017.[19]

List of Ajinomoto brands

Representative directors

• Shigeo Nakamura, President & CEO[69]
• Hiroshi Shiragami, Representative Executive Officer & Executive Vice President, Chief Innovation Officer (CIO)

Divisions and global locations

Ajinomoto currently operates separate divisions for North America, Latin America, and Asia, with Europe, the Middle East, and Africa being combined into the EMEA division. Ajinomoto also owns dozens of subsidiaries globally for its food, biochemical, and healthcare businesses.[70][71][72]

Lysine price fixing

In 1986, the Ajinomoto Group produced lysine at its Iowa factory of Heartland Lysine Co. U.S.A., followed by production in its Pathum Thani factory in Ajinomoto, Thailand, in 1986, and Bio Italia, BioPro in Italy in 1992, gradually upgrading its worldwide production bases. In the United States, competitors increased their own lysine production, which resulted in lower prices due to an overabundance of lysine on the market.[6] To raise prices again, several companies, including Ajinomoto, price fixed lysine in the 1990s. Along with Kyowa Hakko Kogyo and Sewon America, Inc., Ajinomoto admitted to price fixing and settled with the United States Department of Justice Antitrust Division in September 1996. Each firm and an executive from each pleaded guilty as part of a plea bargain to aid in further investigation. Their cooperation led to Archer Daniels Midland settling charges with the US government in October 1996 for $100 million, a record antitrust fine at the time.[73] Cartels were able to raise lysine prices 70% within the first six months of cooperating.