Just in time for the holiday season! free to read :)

I decided to dive into what’s often considered the See’s Candies of Japan.

Kotobuki Spirit’s sells confectionery at a 60%+ gross margin and like See’s, one of their main growth levers is price increases - which is rare in Japan!

This comes from their unique culture which has driven a 20x in operating profits and the stock 70x by my estimates over the last 20 years. This may be the first time that I discuss a company where Culture is the main moat. I dare say that in some aspects it might be better than See’s.

In this write up I’ve tried to break down what makes this organisation such a success in a notoriously competitive industry, where I learnt about why they can raise prices so consistently. One thing that also surprised me was their great M&A track record!

It may be timely to review them as the stock is down 30% from peak and there’s some concern about inbound Chinese tourism slowdown - impacting their biz.

I really enjoyed studying it as it encapsulates the best of Japanese culture: gifting, omotenashi and endless an pursuit of craftsmanlike excellence - no matter the scale of the business. Through this I also hope you learn a tiny bit more about Japan!

Anyways, heres part 1. Enjoy! 🥳🍰🇯🇵

If you liked what you read, would appreciate it if you can share with others who may be interested!