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.
Korea is king of the hill and a key regional trend setter in the men’s skin care market estimated to be worth over USD550m. China’s market is a similar size, whilst Japan’s is around USD300m. Add in shavers and accessories and the market size is five times larger. The male toiletry category comprises several segments including shampoos, the largest segment with around 32% share (Japan numbers), followed by hair tonics with 24%. Styling agents, facial and body creams make up the rest. Thus far growth in men’s skincare has been double digits. Recent hot summers have fuelled an increased awareness of body odour. There has been increased marketing activities as more players join the fray. With the exception of hair tonics, most brands have targeted younger users, typically under 25 years. There are several ways to keep the category growing. One option is new user acquisition, especially from the older age brackets, Korea, Japan and China all face an ageing demographic profile. Mark
Japan’s beer market has never been groggier. In 2003 sales were over 500 million cases but this year will slip to around 420 million. Kirin has been the biggest loser, in the 1980s its share was 60% but today is around 35%. Whilst some of the slumber can be attributed to demographics, there is also an argument that the distribution and retail stranglehold of the 4 big domestic breweries has inhibited innovation, both from other domestic companies and international brands. According to the Teikoku Databank, there are actually over 150 Japanese domestic, regional, craft breweries. Admittedly their number has also declined slightly, but recent data shows a clear upswing in their average sales. Consumer surveys are showing a greater interest and appreciation in hand crafted beverages, others like to be seen with a beer that is not available in every CVS and supermarket. Today the craft beer category in Japan is worth around USD400m. Not an insignificant number for what has been seen, at
Rice plays an important dietary and cultural role in Asia, where 90% of global consumption occurs. However changing lifestyles and habits have seen per capita consumption decline in some of the larger and richer countries. In mainland China per capita consumption now averages 83kg down nearly 10kg in the space of a decade, in Hong Kong per capita consumption is half of the mainland. In Japan it is just over 60kg and has been continuously dropping for many years. Rice is a key item in the current TPP negotiations and further import liberalisation seems inevitable. Japan’s reformist Prime Minister has already implemented some reforms in the agricultural sector to promote competition, and rice prices are falling. In Japan rice farms are small and economies of scale hard to find, many farmers are poor. The future of rice farming is threatened. Whilst some are resorting to protests, change is inevitable and it’s clearly time for an added value innovation approach. H