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
July 19, 2016

Surge of shoppers bargain hunting in Japan’s wholesale supermarkets

Kansai people have a reputation for finding hot deals and striking quick bargains. So it’s not a surprise to find that a whole class of business or wholesale supermarkets are thriving in the region.  Called “gyomu super” (業務スーパー) in Japanese these outlets sell more foreign sourced products that many mainstream Japanese supermarket chains and their retailing style is old style bulk displays in large boxes rather than neatly merchandised aisles with not a price ticker out of place. But given the growing divide in Japan between the “haves” and the “have nots”, business is booming. The shopper profile skews heavily to those on a budget and for whom time is of the essence. Kobe Bussan, a major importer, is a leading player and sells directly to its fully owned and franchised store base which now exceeds over 600 outlets.
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June 20, 2016

Tempted by a tipple of Japanese Malt Whisky?

Japanese Whisky is going through a heyday with rapidly growing demand for unusual and hard to find malts. This special corner, spotted in Hankyu Department Store in Umeda, Osaka today, is designed to tempt punters into tasting a tipple. In the past Whisky accounted for about 1% of the Japanese spirits market but like the raging Craft Beer boom, that’s all changing. Campai!
May 2, 2016

7&i stuns Aeon in Private Brand frenzy

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
April 4, 2016

When will Organic cut the mustard in Japan?

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
January 27, 2016

Hokkaido’s homegrown brands soar from airport launchpad

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
December 9, 2015

Japan’s growing vitamin supplement market

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.
July 24, 2015

7-Eleven’s home delivery

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.

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