Executive Summary

Nitta Casings Inc. is an international manufacturer and purveyor of collagen casing for the meat and snack food products industries. Nitta Casings was started as an R&D arm of Johnson & Johnson before spinning off as a separate entity in 1960. It was the first in the world to develop and market an edible collagen casing. The Company provides a high percentage of the casings for meat snacks in groceries across the country and around the world. Many in the meat industry consider collagen to be the superior casing option, versus animal gut or cellulose, because of its health benefits, cleaner and more predictable production process, and longer shelf life.

Challenge

Nitta CasingsDespite Nitta Casings’ history of leadership in the industry, there were significant challenges that the Company faced. A focus on cost cutting, headcount reductions, and entry into some unprofitable international markets compromised the financial health of the Company. In addition, a customer first approach led to an inefficient proliferation of unprofitable SKU’s. Their business could not handle the loss of a major customer; escalating material, labor, and benefit costs and the impact of the Great Recession. The company was burning cash at an alarming rate and the parent company was pursuing sale of the business unit.

Solution

Winsights Marketing and the Nitta Casings team worked together to craft a five year strategic plan that outlined five key strategic imperatives (PRIDE) including:

  • Product Strategy Approach
  • Reinvesting in Growth
  • Innovation in New Products & Applications
  • Developing Talent and Individual Leadership
  • Efficient Use of Resources

The team focused on the biggest cost centers of the business and refocused the company on developing efficient and strategically aligned processes. They took advantage of savings opportunities in procurement, manufacturing process, and supply chain. Most importantly, the company adopted the new PRIDE vision and direction, enhancing the corporate culture.

Results

The Nitta Casings strategic plan laid the roadmap for a remarkable improvement in business performance. The Company increased EBIT by $9.0 million while greatly improving customer service and market share. As a result, the Japanese parent company decided not to sell Nitta Casings and made a significant investment in capital expenditures in the plant.

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