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I.'
<br />Attachment #4
<br />In the meantime, the company continued developing new product lines. Among these were baby biscuits, called
<br />Morinaga Manna, which the company began producing in 1930. In 1935, Hanzaburo Matsuzaki became company
<br />president. The company took a leaf from its Western counterparts in the 1930s, promoting holidays - -such as
<br />Mother's Day starting in 1937 - -as a means of stimulating candy and confectionery sales.
<br />During World War II, Morinaga turned part of its resources toward the production of penicillin, saving a good
<br />number of lives. Following the war, the company, now led by Taihei Morinaga, decided to split up its operations,
<br />separating its dairy business into a separate company, which became known as Morinaga Dairy Industries in 1949.
<br />That company then developed into one of Japan's major dairy groups. The two companies nonetheless remained
<br />closely linked, sharing the angel logo and developing common products and marketing campaigns.
<br />The 1950s saw new expansion for the company. In 1954, its production capacity expanded with a new band oven -
<br />-the first to be brought into Japan. Two years later, Morinaga extended its dessert offerings with the production
<br />of ice cream, which quickly developed into one of the company's key product lines. Another strong seller for the
<br />company came in 1957, when it introduced its popular Hotcake Mix. That line also became one of Morinaga's
<br />flagship brands.
<br />Attempts to introduce Valentine's Day celebrations - -and linking that holiday with chocolate - -had been made since
<br />the 1930s by various Japanese companies. At the beginning of the 1960s, however, Morinaga at last succeeded,
<br />launching a "Chocolate for St. Valentine's Day" marketing campaign. The company had other hit products during
<br />the decade, such as Hi -Crown Chocolate, launched in 1964, and a new soft, milk -based caramel, Hi Soft, launched
<br />in 1969. At the beginning of the 1970s, the company added a new line of Twiggy chocolates as well.
<br />Morinaga's sales continued to rise during the 1980's, nearing the equivalent of $1 billion by the end of the
<br />decade. The company by then had opened its fifth manufacturing facility and had continued to extend its product
<br />range, launching, for example, its brand of Ottoto crackers. The company also had expanded beyond candies and
<br />confectionery to some extent, adding production of alcoholic beverages. That business, operated under the name
<br />of Fukutokucho, produced primarily sake and shochu.
<br />Closer to the group's core was its drive into the health and nutritional foods market. The company's entry into the
<br />sector began in the early 1980s, and a 1983 licensing agreement with the United States' Weider Nutrition
<br />International to develop and market Weider- branded products for the Japanese market. The company also
<br />entered the soft drinks market, launching a rice -based health drink, Amazake, which became one of its key
<br />brands. Tofu represented another fast - growing nutritional product for the company, and formed a strong part of
<br />the group's international growth. By the end of the 1980s, the company had entered some 32 countries, backed
<br />by sales and marketing subsidiaries in the United States and The Netherlands.
<br />Morinaga's product development continued through the 1990s. Among the most successful company products
<br />launched during the decade were its Sold Dazen chocolates, introduced in 1993. The following year marked the
<br />debut of a new product line, developed under Morinaga's partnership with Weider. The new snack, called Weider
<br />in Jelly, was the first in a range of drinkable, jelly -like snacks touted by the company as nutritional foods. The
<br />Weider line, fully launched in 1995, was credited with creating an entirely new product category. The first
<br />variations included Weider Energy In, which claimed to provide a sustained, quick energy boost; and Weider
<br />Vitamin In, which claimed to provide a full spectrum of vitamins provided by a balanced meal. Targeting a young
<br />male market, the Weider line grew steadily into the next decade, and by 2002 represented nearly 20 percent of
<br />the company's total sales.
<br />The sustained Japanese recession into the 2000s slowed the confectionery market as well. In response, Morinaga,
<br />now led by Gota Morinaga, developed a new "Power Brand" strategy for the new century, with a focus on a
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