Discover the office market! A profitable channel for hungry food companies

Japan’s retail sales have suffered from anaemia for some years with meagre spurts of growth followed by sudden declines. Inflation has been much talked about but hard to spot, meaning intensive price competition and profit margin squeeze for manufacturers.

Some canny companies have however been looking further afield into new channels and routes to market.

As anyone who visits Japan soon realises, the country is awash with offices, warehouses and factories; according to official economic statistics there are over 5.5 million such establishments, employing over 57 million people. Whilst there has been much publicity recently about “karoshi” or overwork, the vast majority of folk slave away loyally, often well over 50 or more hours a week.

A captive market for entrepreneurially minded food companies.

Selling to offices is not new. Yakult was the pioneer with its famous squads of ladies, pushing bikes and carts loaded with fermented milks. It has over 37,000 people on the road. But the work is hard and then there is the issue of staff and depot overheads.

Nestle launched its Ambassador system a couple of years ago that uses an e-commerce platform plus leverages third party logistics providers like Yamato and Sagawa, circumventing the need for armies of expensive sales staff. There are now over 250,000 Ambassadors in Japan serving around 2.5 million people a day.

Office Glico, an offshoot of the Glico confectionery company has a similar business model, although its modus operandi is slightly different. Sales are said to be in excess of US$50m.

Recently a start-up, Office de Yasai http://www.officedeyasai.jp a private equity backed venture entered the market offering a product range more suited to the healthy minded, Yasai means “vegetable” in Japanese.

Outside of the food business, there are a number of giants in office supplies, like Askul which totes sales in excess of JPY315b (US$3bn). Askul historically specialised in stationery, today this category now accounts for less than 15% of revenue and for several years the company has expanded into new categories like furniture and medical supplies. 

How it views the hungry food companies trotting on its turf I do not know, but if Office de Yasai start eating too much lunch, perhaps they will end up on the dinner table?

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