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An American pretzel in Tokyo: Wetzel's goes Asian

Food IndustryKentucky Fried ChickenPepsiCoIHOP Corporation

In the land of sushi, ramen and tempura, pretzel sales apparently do gangbusters. After launching its first Asian outpost in Japan, Pasadena-based Wetzel’s Pretzels said the store has become its top-selling location worldwide.

Photos show snaking lines at the Ario Kameari Mall in Tokyo, with customers carting away armfuls of pretzels. Now the chain is talking to potential franchisees in China, Taiwan, Malaysia, Singapore and other Asian nations.

The company plans to open 10 more locations in Japan over the next two years.  Based on its performance during the first two months of sales, Wetzel’s projects the Tokyo store to rake in $3 million in revenue during its first year in business.

Fast food companies such as KFC owner Yum Brands and McDonald’s have pushed heavily into Asia in recent years and have largely recorded booming revenue in the region. Now foreign snack food companies want in too.

“There clearly is saturation in most of those categories in the U.S.,” said co-founder Bill Phelps. “Asia, where they’re more broadly accepted, is much more wide open for expansion.”

French-style crepe companies are opening up shops in hip neighborhoods such as Harajuku; PepsiCo bought a major stake in Japanese snack food maker Calbee after the recession.

That’s even though (or because) countries such as Japan don’t have much of a snacking culture, Phelps said.

“There are some ice cream stores, but cinnamon buns stores aren’t really a factor,” he said. “Cookies aren’t either. But they do have traditional malls.”

The new Japanese Wetzel’s Pretzels will feature slightly smaller pretzels, in flavors such as Sour Cream & Onion and Almond Crunch. The new store was partially inspired by the chain’s popularity among Asian tourists in the U.S., said co-founder Rick Wetzel.

“We sort of hit a gold mine here,” he said.

Wetzel and Phelps launched the company in 1994 out of a San Marino kitchen, though it has been based out of Old Town Pasadena for 17 years. Same-store sales in the U.S. rose 9% last year and are up 7% this year.

Ninety percent of the company, which has 250 locations, is franchised. Besides making inroads into Asia, the company is also looking into gluten-free pretzel options.

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