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One of Japan’s largest producers of baby food is to close its business as inflation bites and births in its home market plunge to the lowest level since records began.
Kewpie, producer of the nation’s best-loved brand of mayonnaise, and whose famous logo resembles a chubby baby, will cease production of 72 items that have long delighted picky infant consumers, including sea bream rice porridge, pumpkin purée and banana pudding.
The move, which has triggered a petition from thousands of dismayed parents across the country, follows government data published this year that showed only 686,000 Japanese babies were born in 2024, the lowest number since records began 125 years ago.
The births figure also fell below the 700,000 level about 15 years ahead of when median estimates suggested Japan would reach that point. An increasing number of experts believe Japan should adopt more pessimistic forecasts, which predict annual births will drop below half a million in 2050.
Japan’s third-largest baby food producer cited a “slump” in sales volume as the reason behind its action. It also blamed rising costs due to soaring raw material and energy prices, as a new era of inflation continues to rattle the country after a three-decade hiatus from rising prices.
The biggest reason for falling sales, according to the company, was consumers’ inability to stomach price rises in 2022 and 2024. The declining number of babies in Japan was also an indirect factor behind the exit from the business after 65 years, it said.
Baby food sales at Kewpie dropped to ¥3.85bn ($26.2mn) in the 2024 fiscal year and now represent less than 1 per cent of sales.
“If the market is not growing, then they don’t have the ability to raise their prices when costs are growing. It is related to demographics,” said Mike Allen, director of independent research group Azabu Research.
“Babies are the fastest declining part of the market, so there’s not too much hope unless there’s some new niche within that market.”
The company’s range of children’s foods has been commended by parents for requiring minimal preparation compared with rival products, saving them time.
“If I had to make baby food from scratch, then there’s absolutely no way I could manage working full-time, so please, don’t let it disappear,” said one mother on social media site X.
The Tokyo-based group has experimented with new forms of packaging, extending the expiry date and more microwaveable products. Pivoting to overseas markets, as many other Japanese companies have done, was deemed difficult due to legislative hurdles to exporting baby food.
Founded in 1919, originally as a manufacturer of sauces and canned goods, Kewpie took its name from a brand of baby cupid dolls popular in the 1920s.
The company’s shares are at an all-time high as the group expands production and sales in the US market, where Asian food is growing in popularity. It has expanded margins through price increases and is focusing on more profitable divisions, as it concentrates on shareholder returns.
Meanwhile, Kewpie’s rivals have reported a tailwind to the baby food market from another demographic development in Japan’s economy.
As the government encourages record numbers of women to work and their free time to prepare baby food has disappeared, the market has grown 20 per cent in value since 2016, according to Asahi Group Foods, the market leader.
The female labour participation rate hit a record 53.6 per cent in 2023, according to the Ministry of Internal Affairs and Communications.