Stock Spotlight: Ezaki Glico

00:00:11:15 - 00:00:14:06 So one of the new names in our portfolio 00:00:14:06 - 00:00:17:20 that I really like because I am a chocoholic 00:00:17:20 - 00:00:20:01 is Ezaki Glico 00:00:20:01 - 00:00:23:03 and just a second, let me show you what that is. 00:00:28:00 - 00:00:33:15 Here is Jamie advertising Ezaki Glico not for its products, but for the stock. 00:00:33:15 - 00:00:37:21 It is an amazing chocolate manufacturer in Japan. 00:00:37:21 - 00:00:40:07 It has a global product. 00:00:40:07 - 00:00:44:20 In Los Angeles I see it sold in my local supermarket. 00:00:44:20 - 00:00:47:20 You can find it in China, you can find it in the UK, 00:00:47:20 - 00:00:49:11 you can find it in Europe. 00:00:49:11 - 00:00:52:00 It is a literally a global product with a market 00:00:52:00 - 00:00:55:14 capitalisation of approximately $2 billion. 00:00:55:14 - 00:01:00:14 Luckily, Dalton clients have the ability to handle some illiquidity, 00:01:00:14 - 00:01:03:08 and we've accumulated over 10% of the company. 00:01:03:08 - 00:01:06:23 From children to adults we all need chocolate. 00:01:06:23 - 00:01:08:13 We all need to feel good 00:01:08:13 - 00:01:12:22 and this is a marvellous product that is sold globally by Ezaki Glico. 00:01:12:22 - 00:01:17:24 The addressable market for chocolate is tens of billions of dollars globally. 00:01:17:24 - 00:01:22:09 It is a unique market for those who follow the prices of cocoa. 00:01:22:09 - 00:01:27:19 You'll notice the price of cocoa has continued to rise as difficulties in Western Africa, 00:01:27:19 - 00:01:33:01 the Caribbean and Asia make picking the cocoa bean more and more complex. 00:01:33:01 - 00:01:38:01 But as far as the market itself, it is a growing market 00:01:38:01 - 00:01:42:23 as people’s incomes rise to middle class globally 00:01:42:23 - 00:01:46:15 and one of the greatest new markets for this product is India. 00:01:46:15 - 00:01:50:18 So in Japan you have a number of unique consumer products 00:01:50:18 - 00:01:54:18 but this type of product can be sold globally 00:01:54:18 - 00:01:58:19 just as easily or even more easily than an automobile. 00:01:58:19 - 00:02:03:17 Therefore, while we see it in our market, 00:02:03:17 - 00:02:06:05 it is not a product that is being marketed 00:02:06:05 - 00:02:09:23 in the way that we believe, at Dalton, it can be 00:02:09:23 - 00:02:13:09 and therefore to compete, for instance, in the United States 00:02:13:09 - 00:02:16:22 with Hershey or in the UK with Cadbury. 00:02:16:22 - 00:02:19:16 So we see a $2 billion market cap 00:02:19:16 - 00:02:22:22 that could easily be worth double or triple this 00:02:22:22 - 00:02:27:23 if consolidated with a global player who has more power marketing. 00:02:27:23 - 00:02:30:02 We've talked to private equity firms. 00:02:30:02 - 00:02:34:20 They also share our view that this could be a unique target for them 00:02:34:20 - 00:02:37:07 and therefore we see a lot of reasons why 00:02:37:07 - 00:02:41:01 there will be a consolidation within the chocolate industry within Japan.