Mr. Yoshida’s Japanese-style barbecue sauce was acquired by Heinz almost 25 years ago—but the food giant nearly killed the brand. So its 75-year-old immigrant founder bought it back this year and is ready to “go, go, go.”
By Chloe Sorvino, Forbes Staff
The labels on Mr. Yoshida’s Japanese-style barbecue sauce have long featured a photo of its charismatic founder in his signature look: a cowboy hat, glasses, and a wide, yee-haw smile. The joy emanating from his grinning floating head is a key part of the image that Yoshida has fostered over the past four decades as his brand grew.
“That history of a great American dream is still surviving in this country,” says Junki Yoshida, who recently turned 75. “It’s me.”
The optimism belies what has been a sweet and sour ride for Yoshida. After the Kyoto-born entrepreneur moved to Seattle at age 19, his family renounced him. So there was a soupçon of revenge stirred into the recipe when, in 1982, he started creating a sauce in his Oregon basement—inspired by what his mother had sold at her restaurant in Japan. The eponymous brand he launched grew into a major success—with sales of $25 million before the U.S. distribution rights were acquired in 2000 for $24 million by the American food giant Heinz (now Kraft Heinz).
And then a business that Yoshida claims had commanded 26% of America’s total teriyaki sales slowly got killed over the past two decades. But Yoshida didn’t let that end his story. His repurchase of Mr. Yoshida’s was the most significant food buyback of 2024—and the early success of its return to Costco, Sam’s Club, Safeway and Albertson’s as well as its first-ever launch on Amazon has paved the way for Mr. Yoshida’s to regain its position as a major player in the condiments industry.
“Heinz destroyed Yoshida’s brand,” he says with the same grin featured on his labels. “I wanted to start over again.”
Yoshida took the risk knowing his most loyal customers still existed. Since the sauce disappeared from shelves in March, Yoshida says his business received complaints from thousands of previous customers. At the brand’s peak, Yoshida says he was receiving 300 emails a day, in addition to social media tags. Since fully relaunching in August 2024, the company anticipates its fourth quarter 2024 sales will end up at about $7 million, or roughly the same as what Kraft Heinz pulled in for the brand prior to the sale.
Mr. Yoshida’s is manufactured out of a 150,000 square foot production plant in Portland, Oregon that has been in operation since 1994. The plant is capable of producing over 25,000 gallons a day, and once Yoshida reacquired the rights to his U.S. sales, the process was turnkey.
It still took a lot to get here. Earlier this year in April, Yoshida engineered the repurchase of the U.S. brand’s assets. The purchase price remains undisclosed, but Forbes estimates Yoshida Foods spent less than $1 million, a steep discount from what Heinz paid in 2000. The only assets exchanged this time were intellectual property. A spokesperson for Kraft Heinz denies that it destroyed Mr. Yoshida’s business and described the company as having “offered the brand back to the founder” and that it “proactively reengaged” Yoshida.
Now Pitching: Junki Yoshida, founder and CEO of Yoshida Foods, giving a sauce demonstration at a Fred Meyer grocery store.
Courtesy of Mr. Yoshida’s
The 2000 Heinz acquisition didn’t impact any other market and for the past two decades Yoshida has continued to sell his sauce in seven countries including Japan, South Korea, Taiwan, the United Kingdom, Sweden, Australia and Iceland. Before the U.S. brand rejoined the group, the parent company, Yoshida Foods, had estimated revenue of $30 million annually.
Two decades ago when Yoshida Foods sold the U.S. rights for roughly its annual sales figure, smaller exits in the food industry were the norm. Deals closed at most at 2- or 3-times sales. But more recently, with billions of funding being pumped into the food industry, the deals have gotten bigger. While the chance of a strong exit has become riskier, the deals now can reach as high as 10 times revenue, such as in 2020 when McCormick spent $800 million buy Cholula hot sauce.
The losing deals are written off. And while Yoshida got his U.S. rights back at what seems to be a below-market price, if the entire Yoshida Foods business were to be acquired or went public, it would be valued in the hot area of global flavors, like Cholula, where deals can range from 4 to 8 times sales, or more. At the bottom end of that range, Forbes estimates that Yoshida Foods could be worth around $200 million.
The youngest of seven siblings, Yoshida learned how to cook in the Korean-style restaurant that his mother owned and operated in Kyoto. As a young boy, he made a lot of sauce there.
After immigrating to Seattle in 1968, his parents disowned him. They couldn’t understand why he would want to live in what they still viewed as “enemy territory” in the aftermath of World War II. But as he dealt with being cut off entirely, his determination grew. “I had no place to go. I had to make it,” Yoshida recalls. “I had to survive.”
After working as a gardener and in several restaurants, Yoshida spent five years training, competing and teaching karate. He opened a few karate schools and taught a police training program around the Northwest.
But the thought of his mother’s sauce stayed with him. At the start of the 1980s, supermarkets were booming and he saw an opening to bring the taste of teriyaki sauce to American consumers. Since he launched his sauce in 1982, Yoshida has almost gone bankrupt four times, but narrowly avoided it each time. He never gave up on his dream of bringing his sauce to the masses.
Soy To The World: Since starting to make sauce based on his mother’s recipe in his Oregon basement in 1982, Yoshida’s brand has found a cult-following.
Courtesy of Mr. Yoshida’s
Early on, Yoshida had a 30-store test with Safeway, then the largest retailer in Oregon with 150 stores. Safeway had promised that Mr. Yoshida’s would sell alongside other barbecue sauces. But when Yoshida checked inside the stores, his sauce was next to soy sauce. It still sold out over the course of a weekend. But when the buyer called Yoshida back, panicking and asking for more, Yoshida balked and replied “we don’t have it.” Why? Because the buyer “broke a promise.” After some negotiating, Yoshida secured placement in the barbecue aisle of every Safeway location in the state, and the buyer went on to become one of Yoshida’s strongest supporters.
But the biggest break came when the sauce became “a staple at Costco.” That kind of placement meant Yoshida had visibility as well, especially at new location openings from the 1980s on, recalls John McKay, former executive vice president at the big box giant. McKay says he knew Mr. Yoshida’s would be a success when Yoshida came to the United Kingdom in 1993 to promote his sauce at Costco’s first two locations there, and Yoshida sold out of an entire container load of sauce, or thousands of bottles, within a few days.
“We are going back to basics now,” Yoshida says of his buyback strategy. “Demo after demo.”
“There was this Japanese guy in a cowboy hat running around, chasing people down, getting them to try his sauce,” recalls McKay. “Just a great showman and a great entrepreneur.”
As Costco expanded, so did Mr. Yoshida’s. Thanks to gallon-sized jugs sold at Costco and Sam’s Club, Yoshida’s U.S. business surpassed $20 million in revenue in the late 1990s.
But as the business grew Yoshida didn’t compromise when it came to the sauce itself. After expanding to a bigger manufacturing facility in 1994, Yoshida perfected a way to slow-cook his sauce at scale. It wasn’t long before his growing brand and success rate from in-person marketing caught the eyes of strategic buyers in the condiment industry.
Sauce Boss: Yoshida oversees his 150,000 square foot production plant in Portland, Oregon that’s been running for three decades.
Courtesy of Mr. Yoshida’s.
Yoshida was just 51 years old when he sold to Heinz. He says he wasn’t ready to retire at the time. But he says he decided to sell after considering how big Heinz promised to grow his brand. “It was not rocket science,” he recalls. “They had about 130 salespeople nationwide and 30 people in marketing. It was almost guaranteed to grow.”
But Yoshida shouldn’t have been surprised when he started to feel seller’s remorse. A food acquisition often means that the first thing a new owner does is alter (or cheapen) the recipe to increase profits from the product. It’s expected, even though Yoshida had tried to insure against it. He recalls that Costco’s co-founder Jim Sinegal—famous for telling Costco’s CEO he’d kill him if he raised the price of the brand’s $1.50 hot dog—had even personally requested two conditions prior to the acquisition: no price hike and no recipe change.
Yet Heinz didn’t hold up its end and Costco started complaining. Within three years of Heinz producing the sauce, customers noticed a big change. Against the promise to Costco’s cofounder, Heinz wasn’t letting the sauce cook down. That’s when Yoshida Foods started manufacturing some of the sauce again.
“We cook it down because the flavor comes up there. That’s why it smells different than any other sauce—because of the cooking down,” Yoshida says. “That’s my secret.”
But even with Yoshida Foods back to making the sauce, it wasn’t enough. Sales at Costco became even more important—at the peak Kraft Heinz says 63% of Mr. Yoshida’s sold at the club retailer.
The situation for Mr. Yoshida’s got worse after 2013, when 3G and Berkshire Hathaway acquired Heinz for $23 billion and joined it with Kraft in a $63 billion merger. By 2015, 3G’s infamous zero-based budgeting strategy put marketing and innovation at the food conglomerate at risk. As HSBC equity research analyst Alejandro Zamacona Urquiza explains, “Besides laying off 7,600 employees—over 24% of the combined workforce—and announcing the closure of seven manufacturing facilities and several distribution centers in North America in 2015, its restructuring process killed innovation and marketing, boosting short-term profitability in an unsustainable way.”
Kraft Heinz denies that. While the company did shut down Mr. Yoshida’s in-store demonstrations, which was a key part of what brought in new customers, Heinz’s perpetual turnover also didn’t help Mr. Yoshida’s from getting lost among the rest of the food conglomerate’s many other brands. There were nine different Heinz employees in charge of the brand in the two decades that the founder was not involved in the U.S. business.
“They never put the money back into the brand,” says Yoshida. “Zero invested in company growth.”
Kraft Heinz denies that as well, and, by 2019, the Kraft Heinz board appointed a new CEO with a strong marketing background to reinvigorate the company, says Urquiza. While that could have been good news for Mr. Yoshida’s, the next year Kraft Heinz restructured around its Heinz ketchup line, Philadelphia cream cheese, Kraft Mac & Cheese and Lunchables, and planned to divest from others as part of a turnaround strategy. That put Mr. Yoshida’s in an even tougher spot.
“We were proud to sell and distribute the Mr. Yoshida brand and we invested and worked to grow the product like any other in our portfolio,” a Kraft Heinz spokesperson tells Forbes.
Now, a few months after the buyback, Yoshida has a new enthusiasm about his brand and he has returned to his in-store demonstration playbook across his 2,000 retail locations. And there are thousands more that Yoshida wants to add to his sauce’s distribution—including more Costco, Sam’s Club and Albertson’s stores. There are also several big chains that Yoshida hasn’t broken into yet like H-E-B, Publix and Ahold Delhaize’s Stop & Shop. Yoshida says he is prepared to invest to get into stores and have customers taste the sauce.
“We are going back to basics now,” Yoshida says. “Demo after demo.”
Another major engine of future growth is Amazon and other e-commerce platforms like Walmart.com, where Mr. Yoshida’s launched this month. It still baffles Yoshida as to why Heinz never put his sauce on Amazon, despite the loyal following behind the product. (Kraft Heinz says its strategy was more focused on in-person retail, like Costco, Kroger, Walmart and Albertson’s.) Restoring Mr. Yoshida’s to its former success also involves fighting for the shelf space he pioneered back in the 1990s, which is now far more coveted by hot upstart brands with private funding like Bachan’s, which sells in all U.S. locations of Costco. The shelf is as competitive as ever, as is the digital space, and the brands are going head-to-head in both arenas. Mr. Yoshida’s claims it briefly unseated Bachan’s this fall as Amazon’s No. 1 selling barbecue sauce.
Amid this modern transformation, Yoshida and his family, including three daughters and four grandchildren, are planning for the longevity of their family business.
There’s now a succession plan in place. Yoshida says he became inspired like never before to rebuild what Heinz broke after his 18-year-old grandson, Kiernan McMorris Yoshida, asked to join the company when he graduates from the University of Southern California. If all goes according to plan, he is set to take over the day-to-day operation of Mr. Yoshida’s, and Yoshida wants the U.S. business to be bigger than ever by that point.
“I’ve got somebody who can carry my name here,” Yoshida says, “That’s my motivation right now. I want to go, go, go.”