Dyson’s latest innovation, a hair dryer positioned as “intelligent” to “make your hair shiny”, hit the Japanese retail market last week. Two weeks previously the brand’s global launch blasted off in Tokyo attended by a variety of glitterati including the British ambassador. The company has a loyal following in the land of the rising sun where trend savvy shoppers like to be seen with the latest gadgets. Hair dryers are a significant category in Japan worth over USD600m. Competition up until now has been legacy Japanese electrical giants like Panasonic. James Dyson is quoted in its Japanese sales brochures saying that the “design of hair dryers has changed little since the 1960s” and is ripe for a new style, if you’ll excuse the pun. H
Most of the recent press coverage on Japanese retail giant 7&I holdings has featured board room shenanigans, coups and the ensuing departure of long standing Chairman Toshifumi Suzuki. Less noticed was that 7&I’s private label sales, branded Seven Premium, exceeded USD9.4b in 2015, a growth of 22% over the previous year. Seven Premium now accounts for over 25% of total revenue. In contrast, Aeon’s Top Valu brand which was the original Japanese own label pioneer, saw its PB sales slip to 2% to USD7.1b in the same period. 7&I is famous for its “team merchandising” approach to product development, which in a broad sense means the retailer shares (selected) POS data on shopper behaviour with suppliers to inform product and packaging design. The retailer likes to adopt this team merchandising approach both for PB as well as manufacturer branded items; a challen
CocaCola has just launched a drinking yogurt cum smoothie here in Japan. Drinking yogurts are a big business with players like Meiji holding commanding share positions; most carry probiotics and associated health claims. Coke has chosen to go with a new brand name “Yogurstand” which personally I find clumsy to pronounce. On the back of the pack the MinuteMaid brand also appears, if you look carefully. Its USP? Rare sugar (and no probiotics)
Most visitors to Japanese supermarkets dazzle at the endless array of uniformly merchandised produce with not so much as a lettuce leaf out of place. For a country obsessed with food safety, quality and cleanliness, not to mention a general abhorrence of GMO, it’s surprising that “organic” remains far behind compared to the US, Europe and indeed other leading Asian markets. Even more surprising because five years after Fukushima much of the country has lost faith in nuclear, there’s a groundswell in favour of simplicity, purity and back to nature. Why then has Organic food household penetration yet to break 1% and average spend stutters at a paltry JPY1000 per year? Change may be afoot. Recently more retailers are ranging organic food and there is an emerging network of online evangelists. However for organic to really blossom, several ingredients ar
Japanese food is booming! Exports soared 21% in 2015 to US$521m. Today there are over 55,000 sushi, teppanyaki, ramen and shabu-shabu restaurants outside Japan, double 2006. “Washoku” a word meaning Japanese food, is one of the top 3 global food “brands” along side Chinese and Italian according to a recent survey published by Jetro, a Government agency. Bureaucrats in Tokyo have ambitions to formalise Washoku along the lines of French Champagne or Devon Cream. However behind the headlines, the reality is that Japan’s food export business remains a drop the ocean. Yes there are armies of Japanese food and beverage companies, but most have yet to venture overseas. The most popular Japanese exports are expensive cuts of fish and mammoth sized apples; value add packaged products have been far less successful at penetrating global markets. Don’t shout
Japan surely ranks high on the priority list for electric car makers. Toyota’s Prius sells around 700,000 units here annually and Nissan’s Leaf clocks up sales over 55,000 in the all electric category. Solar panels on houses are ubiquitous and train stations feature signs promoting electricity saving. There’s clearly genuine consumer interest in new energy sources, add on tax breaks for buying electrical or hybrid cars plus a growing network of recharge stations and one can easily see a future where these vehicles will become mainstream. Certain consumers, especially the wealthy love foreign cars, some deliberately flaunt driving a left hand drive on the left side of the road. So why is Tesla, a brand that is not publicity shy, nor lacking in technical prowess or innovation still a minor blip on the Nippon radar? Pricing may be a factor. The model S, which has done so well globally, is over 2.5times the price of a Prius. The lack of a strong dealer network is d
I made my annual pilgrimage to Asia’s snow paradise Niseko last week and on the way back passed through Sapporo’s Shin Chitose airport. Like many airports these days there’s no shortage of shops, Shin Chitose’s difference is most sell foods and local delicacies like in a rural farmer’s market. Chitose ranks number 2 in Japan with sales worth over USD4 billion a year, second only to Haneda, one of the world’s busiest airports. The “golden hour” after passengers have checked in, is critical for airport retailers. In Shin Chitose’s domestic terminal, most of the shops are conveniently located very close to the airline desks. Surprisingly most shops are landside. This also encourages shoppers who are not travelling to purchase. I first experienced the Hokkaido chocolate brand “Royce” at Shin Chitose many y
Variously labelled digi-money, electronic cash, e-money or osaifu-keitai (wallet-phone), new ways of paying for goods and services are expanding in leaps and mega-bytes. A report published over the New Year forecast the digital cash category will triple in size by 2020 to be worth 11.3 trillion yen. New Digi-cash brands have emerged and prospered. Top e-commerce portal Rakuten claims leadership with its 93 million “Edy” cards. Japan Railways was a pioneer with “Suica” (branded with a smiling penguin) early in 2000, “Waon” (named after a dog’s bark) issued by Aeon group has issued over 53 million, slightly ahead of bitter rival 7-Eleven’s “Nanaco” (branded with a giraffe). Foreign digital money brands are also competing. PayPal claims over 1 million Japanese subscribers. And everyone’s heard the rumours around Apple Pay. An ironical trend in a count
Japan’s No.2 snack maker, Frente, which markets itself as “Koikeya” announced plans today to enter the Vietnamese snack market with a new factory investment worth USD6.7m. Koikeya’s position in Japan is far below market leader Calbee who have over 60% share. Vietnam will not be a run over either, South Korea’s Orion is growing quickly and already has 2 plants. Calbee is not present in Vietnam at the moment, though there have been rumours it was looking for a strong local partner. Koikeya’s launch is slated for April 2017. What branding and RTM approach they’ll follow to break through is yet to be seen.
Top Japanese snack brand Pocky is getting creative with its naming and messaging for the first 3 months of 2016 with a series of run out lines variously branded Sukky (a pun on 好き meaning to “like”), Lovecky (to coincide with Valentine’s day) and Ganbacky (a double entendre on がんばる meaning to “strive on”), amongst others. Whether this exercise is inspired by consumer insight, the company’s advertising agency or a catch-up to Kit Kat, I cannot imagine.
Californian chain, Coffee Bean & Tea Leaf will open its 9th Japanese store in Namba, Osaka just after Christmas. The brand is being marketed by LA Style a division of Hotland, a Japanese company which also operates the Cold Stone franchise.
The vitamin, mineral and health supplement market in Japan continues to grow and the category is now worth over Yen 1.5 trillion or USD12.86 billion. According to figures released by Intage this month, a market research company which tracks consumer trends using a large household panel, the average annual spend on supplements exceeded JPY27,400 (USD223) per person in 2015 plus user penetration was over 50% of the 15-79 year old age bracket. What is even more significant is that the biggest sales channel is mail order or e-commerce with over 52% share. This fact alone has serious repercussions for the go-to-market model for both existing players and new entrants, Vitamin supplements for skin and facial care were the biggest category segment.
Pocari Sweat that quirkily named sports tonic is being launched in Cambodia. In Japan Pocari’s brand owner, Otsuka, is recognised more for pharmaceuticals and nutraceuticals than beverages, has taken a long term globalisation strategy and arguably is faster at reaching new markets than larger domestic rivals Kirin, Asahi and Suntory. Otsuka is going to supply Cambodia from a Korean plant for the time being, rather than Indonesia, where sales are said to exceed those in the Japan market. Earlier this year Pocari was launched in Myanmar. Cambodia will be Pocari’s 20th global market.
In a recent interview with Nikkei BP business news magazine, Glico’s President, Mr Ezaki, talks about his ambitions to grow Pocky, the company’s flagship brand, into a power house alongside the likes of KitKat and Coca Cola. It’s not an unrealistic goal; Pocky has made significant market share gains in several Asian markets including Thailand and Indonesia. Unlike many Japanese corporates in the food industry, Mr Ezaki seems to recognise the need to adapt for local tastes and needs, which he acknowledges are very different from the Japan market. He even challenges the relevance of “made in Japan” to overseas consumers, a mantra which is seen by some companies as their biggest USP. What I’m not sure is whether Glico will be hiring and promoting more international staff, which will be crucial to achieving his ambition.
I’ve been to a couple of trade exhibitions this month. I find they’re a good way to keep abreast of trends in the industry and meet new contacts. Over the years I’ve attended and exhibited at many shows but found their productivity varies enormously. The food and beverage industry has its mix of famous global exhibitions like Anuga and SIAL plus a raft of regional and country specific shows. Which exhibitions to attend are often decided by Sales and like many commercial activities they can become an annual fixture with few questioning their value or rationale. In the past, when the trade base was fragmented, customers were all bricks and mortar, shows were one of the more efficient ways for large manufacturers to create a presence and communicate with partners. That’s all changed of course. Big customers like private “invitation only” events, channels have
Drug, OTC and Functional Food maker Otsuka Pharmaceutical has just bought over Spain’s Bicentury, a diet food business famous for its Sarialis brand. The purchase price has not been disclosed. Whilst not a major acquisition, sales of Bicentury are Euro35m, it is significant as Europe has not been a big priority. Over 80% of Otsuka’s global sales are in Japan and the USA. Equally important it signals the company’s ambitions in consumer focused nutraceutical businesses. Otsuka pharmaceutical is one of Japan’s larger pharma companies with an eclectic range of businesses. For many it is best known for its clever marketing of isotonic drink Pocari Sweat, Nature’s Made supplements and soy cereal brand SoyJoy. Bicentury was a pioneer in the cereal bar business launching Sarialis in 1992 long before SoyJoy was conceived. Like many large Japanese companies, Otsuka
Super Tamade is an Osaka discount supermarket with over 50 outlets. I happened to be in Tenma, a busy downtown district of the city packed with shops, street side restaurants and long “shotengai” (covered shopping arcades) and one was right in my face. Its colours are all yellows and reds and everything was on discount. It had a huge fish section and I imagined many of the customers were local traders as well as consumers.
Gluten Free is a category that has emerged from nowhere in the last five years in markets like the USA to be worth close to $1bn today, but its success has not been universal. In many Asian markets, Gluten Free products remain the preserve of expat stores and e-commerce. In Japan up until now, there have been very few domestically produced Gluten free products. Celiac disease is caused when the body’s immune system produces an adverse reaction to gluten, a protein present in ingredients like wheat, barley, malt and rye. Celiac incidence rates vary around the world. Globally the average is around 1% but higher incidence rates have been reported in countries like Australia, New Zealand and Iran. Whilst it remains undetected for the vast majority, many suspect they are sufferers; in Canada some reports suggest that up to 30% of shoppers are aware of Gluten Free products. There has been very little publicity for Gluten Free in Japan with the first news mentions a
I was back in the UK in August and couldn’t fail to note the rapid growth in space for ethnic rice and noodles in supermarket aisles. Increasingly time poor but desirous of new tastes, Brits are dialling down on pasta and switching in droves to trendy ethnic rice and noodles. UK rice and noodle sales now exceed 504 million tons and are growing over 6.5% in volume according to Kantar. Trendy ethnic restaurant chains like Wagamama, Itsu, once found only in the capital but now in many cities, are said to be a big factor behind the change. Brands like Tilda, acquired by US Hain Celestial for $357m in 2014, Uncle Bens and local whipper snapper Veetee are dominating the rice category, where the offering, to my “Japanese” eyes at least, is still heavily South Asian. Pouched rice packs, which are easy to microwave, have overtaken dry packaged rice for the first time; savvy marketers have identified it reduces a consumer fear factor on how to cook rice properly. At a time w
I have spent the last 3 days in Tokyo. It is not the most pleasant time of year to enjoy the capital city, buildings are “cooled” to 28 degs and much of the subway does not have aircon. Still I enjoy to get out and walk a bit around the neighbourhood after a day of meetings and spotted these cute, home delivery vehicles from 7-Eleven. It is an initiative to grow sales amongst the older population.