The company is investing ¥7.5bn ($67m) in another production facility for its Frugra fruit granola cereal in the Kyoto Prefecture on the island of Honshu.
Building will begin this summer and the factory is expected to be functioning by August 2018.
Frugra fruit granola cereal is the company’s mainline cereal brand.
Calbee currently produces Frugra at its factory in Utsunomiya in the Tochigi Prefecture, and will extend production to its Hokkaido plant later this year.
Combined, the two factories are expected to boost granola sales to around ¥38bn ($34m) annually, while the third facility is projected to boost capacity to about ¥50bn ($45m) by 2019.
Japan’s largest granola manufacturer reported cereal sales of ¥30.9bn ($28m) in the year ended March 2017.
According to the Japan Snack Cereal Foods Association, the local market for granola expanded by 23%, with sales of ¥45.3bn ($40m) reported for 2016.
Cultivating tastes for granola
Calbee is also launching full-scale exports of its granola brand to China via e-commerce channels.
Although a rarity until recently on Asian supermarket shelves, Calbee believes there is ample opportunity to introduce the Western-style breakfast to the increasingly health conscious and time-pressed market.
Calbee spokesman Masaya Kawase said the change is particularly being driven by households where both partners work and the need to save time becomes more important.