Tazlu Endo: Thank you so much for joining us for this interview, Terry. To begin, what inspired your desire to help launch the HI-CHEW brand internationally?

Terry Kawabe: I joined Morinaga in 1991 and began my career in a sales role. After 16 years in domestic sales division, I had the opportunity to oversee the foreign brands that Morinaga distributed in Japan such as PEZ and Werther’s Original Candy. At the time, I was in my late 30s with limited experience in the global market. Eager to expand my international experience, I made a life-changing decision to step out of my comfort zone. I enrolled in English classes and requested a transfer to the international division, even though overseas exports accounted for less than 5% of Morinaga’s sales at the time. I believed strongly in the potential of this opportunity and was confident that my passion would guide me on this new path.

TE: How did HI-CHEW enter the U.S. market, and what steps did you take to establish the brand there?

TK: Since 2001, the Morinaga factory in Taiwan has been producing HI-CHEW to meet international demand, with the candy initially exported to Southeast Asia and the U.S. In 2008, sales in Hawaii began to grow, prompting Morinaga to establish Morinaga America, Inc. to further expand the business into the mainland U.S. After serving as Branch Manager of Southeast Asia, Morinaga & Co., Ltd, I held the position of COO and Senior Vice President of Morinaga America Inc. from 2012 to 2016. One of my key achievements during this time was developing distribution channels for the HI-CHEW brand in the U.S.

When I first joined Morinaga America Inc., we were a small team of just six people. Our primary responsibilities were restocking display racks in Japanese grocery stores and convenience store chains like 7-Eleven. However, I quickly realized that focusing solely on Japanese or Asian retailers would not lead to significant expansion. Recognizing the immense potential of the U.S. candy market, I took the initiative to approach brokers in the candy trade, offering product samples for trial in an effort to introduce our products to major retail chains.

TE: What feedback did you receive when the brokers first tried HI-CHEW?

TK: I began reaching out to around 25 local brokers, asking them to join me in business negotiations with retailers. However, the outcome didn’t turn out as expected. While the customers praised the taste of the candy, they were hesitant to take on an unknown brand. They would often say, “It’s delicious, but come back when it’s well-known enough to be carried at Walmart.

TE: Is there a difference between the HI-CHEW lineup in Japan and the U.S.?

TK: There are currently over 30 HI-CHEW products available in the United States, featuring more than 50 different flavours. About half of these are produced at our North Carolina factory, while the rest are imported from Taiwan. In Japan, confectionery products typically have shorter life cycles, as stores frequently rotate products to keep shelves fresh and appealing to consumers. In contrast, the U.S. market offers more opportunities to nurture a product over time and build its presence.

Japanese customers appreciate the authentic fruit flavours, long-lasting chewiness, and satisfying texture of HI-CHEW. In Japan, our R&D team showcases its strong capability by offering unique regional fruit flavours, such as Okinawan Shikwasa (a type of citrus), Hokkaido Yubari melon, and Yamagata Sato Nishiki cherry. However, these Japan-specific flavours do not always resonate with U.S. consumers in the same way.

TE: What are some of the cultural differences in how candy is perceived in Japan compared to the U.S.?

TK: In Japan, candy is often seen as a way to alleviate boredom, while in the U.S., it provides emotional benefits beyond just the taste. HI-CHEW’s fruity flavours are widely appreciated in the U.S., where bringing fun and excitement to consumers is also a key driver of candy consumption. As a result, our product development in the U.S. focuses more on innovative flavours and unique flavour combinations. For example, in 2022, Morinaga America introduced an unconventional flavour mix, "Fantasy Mix," featuring the nostalgic "Blue Raspberry," a flavour that doesn’t exist in nature. This mix became an instant hit and was even brought back to Japan as a limited edition, where it became an unexpected but tremendous success.

TE: What factors do you believe contributed to the significant growth of your U.S. business?

TK: In my opinion, localization—from operations to sales and marketing—has been a key factor in the success of our U.S. business. It's crucial to find local partners and work closely with them from the get-go. Setting shared goals and leveraging each other's expertise is also essential. For example, HI-CHEW's popularity in MLB was largely due to the strong personal connections fostered with our local partners.

TE: What significance does expanding into overseas markets hold for Morinaga?

TK: Indeed, Morinaga’s founder, Taichiro Morinaga, began his journey from the West to the East. In the late 1800s, Taichiro Morinaga’s family moved to San Francisco and started a business selling Imari porcelain. Unfortunately, the business did not succeed as hoped. One day, while sitting on a park bench, he encountered a woman who offered him a caramel candy. He was immediately captivated by its taste and became determined to bring these delicious Western sweets to Japanese children.

Upon returning to Japan, he founded Morinaga & Co., Ltd. in 1899, producing caramel and marshmallows, making it one of Japan’s first Western-style confectionery companies. Decades later, caramel evolved into the HI-CHEW brand, and today, HI-CHEW is widely embraced in the U.S. This journey and story hold great significance for Morinaga, showcasing the enduring beauty of our legacy.

TE: What are your goals for the future?

TK: Despite the ongoing challenges and changes in U.S. policies and tariffs, consumer demand for high-quality and tasty candy remains constant. We are committed to delivering the products that consumers desire. In response to the growing health consciousness among consumers, our parent company, the Morinaga Group, is also working towards transforming into a wellness company by 2030. We have been advancing our R&D efforts to introduce wellness products and 'better-for-you' candy, such as HI-CHEW with 30% less sugar.

On a personal level, my goal is to ensure that every member of our U.S. team feels proud to be part of the company and finds joy in promoting the HI-CHEW brand. It’s incredibly rewarding for me to see the impactful results of our marketing strategies and executions for the HI-CHEW brand in overseas markets. I hope that both our employees and customers can share in and celebrate this momentum as we continue on this journey together.