Tapping Tofu’s Potential: House Foods America’s Growth Strategies and Environmental Commitment

Tofu also has the potential to help adults and children battle the obesity issues of today, but statistics show that mainstream America eats less than one block of tofu per year compared to the 25 to 30 blocks Asians eat in the same amount of time. This not only presents House Foods America with growth potential from a sales and distribution standpoint, it also presents the company with a challenge it’s excited to win.

Growing ahead

Despite mainstream America’s low tofu-intake statistics, House Foods America has seen consistent growth since opening its first North American manufacturing plant in 1997. Between 2009 and 2010, the company saw a more than 10% increase in quantity and sales.

This is partly due to a growing Asian population. In New Jersey, where the company opened its second manufacturing plant in 2006, the Asian population grew more than 30% in 2010 compared to the previous US Census data. But Natake said the company has also seen slight increases in sales from the Caucasian-American mainstream market.

The company’s recent growth, in part, comes from its R&D practices and marketing techniques. It approaches each ethnic group, whether Asian, Caucasian, or Hispanic, in a slightly different way. To reach the mainstream market, the company takes out billboards and puts advertisements on buses. In fact, its creative team won a MarCom Award Gold in 2010 using the message “3G,” referring to the company’s tofu being gluten-free, guilt-free, and gimmick-free and playing on the popularity of 3G technology.

Last March, the company debuted So-Yah, a line of gourmet soy products, at the Natural Products Expo West in response to demand for convenient, healthy, and flavorful soy products. Ready-to-eat Tofu Shirataki Noodles are free of preservatives, MSG, and cholesterol, as well as vegetarian, gluten-free, and high in fiber.

It followed the So-Yah launch with a line of 16-ounce WIC-compatible tofu products. “We see the WIC business as a great source of potential,” said Natake. “We started to find opportunities in that line about two years ago, especially in California, to reach the Hispanic market.”

The company also recently introduced an organic tofu cutlet. The cutlet was originally targeted to the Japanese market, was non-organic, and was a conventional tofu product versus the fried and crispy version it eventually launched. House Foods America saw greater potential in focusing beyond the Japanese market and decided to certify the product organic. In doing so, Natake said the company saw more inquiries and opportunities with American mainstream markets because of the increasing interest in organic products.

Although the new products didn’t open House Foods America’s channels of distribution significantly, they did increase the amount of product it sells to current retail partners. “Sales of the cutlet in 2010 grew about 20% compared to the previous year,” said Natake. “Existing distribution channels, even those that didn’t initially carry the cutlet, are now taking it in, and more individual natural food stores are stocking it because it’s organic.”

Invest in the best

In August 2010, House Foods America installed a 213kW photovoltaic solar electric system at its headquarters in Garden Grove, Calif. The company is one of the first in Garden Grove to go solar, resulting in a reduction of carbon dioxide emissions by 527,861 pounds per year—the equivalent of planting 6,139 trees. It’s also seen a 10% decrease in its utility bill.

Natake said the move was pivotal to meeting the company’s environmental goals and to delivering long-term customer value with how it manufactures its products (House Foods America makes a concerted effort to source its soybeans in North America as well). “Being local reduces transportation and fuel costs and our environmental impact,” said Natake. “We pride ourselves on having environmentally friendly tofu.”

Aside from the photovoltaic solar electric system installation, House Foods America has made capital investments in its manufacturing plants as demand for its products has increased. In 2000, it expanded the capacity of its California plant. In 2006, it opened its New Jersey facility, and only five years later, it’s considering expanding that plant or opening another facility.

“Two years ago, we produced 55 million pieces of tofu,” said Natake. “Last year, we made more than 60 million pieces. Our goal is to make 100 million pieces a year.”

These expansions weren’t without their fair share of challenges, however. Industrializing the tofu manufacturing process and moving away from the traditional manual process is difficult, and coupled with the growth the company has seen, the company has to continually re-examine its processes. But because House Foods America works closely with the Japanese companies that make its manufacturing equipment, it’s able to track where it stands in the worldwide tofu production industry. Knowing those statistics makes the work worth the while.

“The companies that make our equipment also work with our competitors, and they tell us we are on one of the top worldwide producers from capacity, production, and sales standpoints,” said Natake.

The company has also overcome the challenge of dealing with tofu’s short shelf life, which is usually only a few days or a week without pasteurization. Through its quality control processes, the company has extended the shelf life of its tofu to 65 days.

These abilities bode well for House Foods America’s continuing focus on increasing tofu consumption in America. Although at one point the company thought the market was oversaturated, the view today is much different. “Our former perspective to the market is different than a few years ago because of the rising concerns of obesity,” said Natake. “We also see tofu playing a major role in helping feed the world.”