Innovation

May 26, 2017

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 bik
August 25, 2016

Healthy mayonnaise combats high blood pressure

Kewpie is making waves with its new “functional food” mayonnaise that helps those suffering from high blood pressure. The company which has sales of over US$6billion, recently launched a Mayonnaise containing linseed oil, high in α-Linolenic acid, which has similar attributes to fatty acids found in fish oils. In the past manufacturers had to go through an extensive, quasi-pharmaceutical product testing to make strong food claims. In order to spur innovation, there has been some easing of these restrictions, although manufacturers still need to provide a hefty health dossier to support claims. This is the Kewpie “amani” (アマニ油マヨネーズ) TVC. It explains that the product contains 30% α-Linolenic acid, plus shows how it can be used for cooking. Recently Kewpie has set up some “vegetable” cafes in Tokyo and Osaka. Perhaps they hav
August 16, 2016

Gari Gari quenches the cruel summer thirst!

It’s been a long, hot and humid summer and young and old alike have been reaching into the ice cream chiller to cool down. Companies with a heavy focus on impulse products typically make over 65% of their annual sales in July and August alone.  Get your sales forecasts wrong and you can easily miss the annual target just because of supply issues. I spent several years in the business and learnt this the hard way. Still that’s another story! Gari Gari Kun, is a quintessential Japanese water ice, whose name derives from the crunching of its inner core of ice crystals, has steadily risen up the market share charts, although its brand owner, Akagi, is not one of the mega dairy companies. Akagi’s rise to fame was thanks in no small part to its cherished relationship with 7-Eleven, the leading CVS retailer. Earlier this year the company hit a publicity sweet spot with an “CE
April 20, 2016

Will Coke’s new drinking yogurt stand the test of time?

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)
March 5, 2016

Ironclad secrets to strengthen Japan’s Washoku business

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
February 8, 2016

Rare sighting of Tesla in Kyoto sparks interest

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
January 9, 2016

Ringing in the New Year with Bytes of Smart Cash

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
September 18, 2015

Gluten Free struggles for relevancy in healthy Japan

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
August 28, 2015

Back in Britain ethnic rice & noodles soar to new heights

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
June 22, 2015

Craft beers campai to cool Japan’s thirst!

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
June 15, 2015

Health and Beauty Foods in Japan

I’ve just uploaded a new slideshare presentation about health & beauty foods in Japan. This is a large market (USD24b) with significant growth prospects domestically and internationally. Enjoy! An introduction to marketing health & beauty foods in Japan from Export and Expand: A practical guide to International growth
June 5, 2015

Reaching new markets with innovative rice technology

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
May 30, 2015

Kirin’s Nespresso Inspired Innovation

Japan’s Kirin is to launch a craft beer service which allows the consumer to make their own fresh brew, at home, using a special server. Think beer on demand, Nespresso style. The service which is to be branded “Kirin Brewery Owners Club” will launch late in July and initially be available in Tokyo only, like Nespresso, orders will be taken online. Kirin plans to roll out the service nationwide in 2016; initially they have capacity to supply just 1000 households. The service will cost around JPY8000 per month. 


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