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Convergence of U.S., Japanese Food Trends Spells Opportunity for U.S. Exporters
By Terrence Barber
Japan has long been the No. 1
market for U.S. agricultural exports, but many analysts believe
the market's potential still exceeds export figures. Now a host
of changes in the Japanese retail market and society are
unleashing tremendous opportunities for U.S. consumer food
exporters, especially in the hotel, restaurant and institutional
(HRI) sector.
Japan remains an extremely lucrative market that is opening up in unprecedented ways, including:
As a result, Japanese food industry decisionmakers are scouring the United States looking for new ideas--product innovations. Opportunities abound for long-term strategic alliances between U.S. producers, processors and exporters and the Japanese market. Yet the window of opportunity could be short-lived, as international competitors can also see--and seize--the opportunities created by trade negotiation successes.
Striking similarities between Japanese and U.S. consumer trends point to increased opportunities for U.S. food and agricultural enterprises in the Japanese market. Three trends now drive U.S. and Japanese consumer food preferences:
The Less Work, the Better
Several social trends have made convenience a major factor in Japanese consumers' food purchases. More women are entering and staying in the work force: they are pursuing career opportunities, marrying later and having fewer children. The number of unmarried men is also rising accordingly. Meanwhile, the percentage of Japan's senior citizens is increasing, due to the low birth rate and the longest life expectancies in the world (83 years for women, 76 years for men).
In general the people in these demographic groups have little time, energy or inclination to cook for themselves. Consequently, the already-strong demand for products that cut down on cooking time and effort--such as frozen foods, microwavable foods and those in retort pouches--will continue to grow. Consumers have also begun buying take-home meals from supermarkets and other outlets.
These social and economic factors are also fueling a trend toward consumer spending on eating out. Nearly 65 percent of Japanese eat out at least once a week, and 85 percent eat out at least once a month. On a per capita basis, annual eating out expenditures in Japan totaled $2,589 in 1995. With an estimated 75 million meals eaten outside the home every day in Japan, the opportunity for U.S. suppliers of food and beverage products is enormous.
Health and Safety Issues Still Rank High
Despite changes in consumer purchasing habits and the country's retail food sector, Japanese consumers have lost none of their concern for food safety. In response to the E. coli 0157:H7 outbreak in Japan, many consumers have sought refuge in locally produced and distributed foods, believing them to be fresher and safer than those from other sources.
To overcome this perception, U.S. agriculture must invest in clearly communicating to Japanese consumers the security provided by U.S. food safety systems. The Japanese market demonstrates an immediate need for a comprehensive strategy, best characterized as a "market-oriented food quality systems approach." A "from-farm-to-fork" marketing campaign that highlights the safety and high quality of U.S. food products would accentuate the positive, while inviting accurate comparisons with competitors, including Japanese producers.
Value for Money
Japanese consumers are looking for convenience food that does not compromise quality--in other words, high-quality fast food. Home meal replacements (HMR)--wholesome, restaurant-quality meals for those with little time or inclination to cook--are beginning to fill this need. HMRs should convey the image that the meal is coming straight from the farm to the dinner table, delivering the three key component parts of food quality: taste, nutrition and safety.
Over the past 5 years, a
convergence of socioeconomic forces including deregulation,
internationalization and a prolonged economic recession have
sharpened consumer demand for quality food products at reasonable
prices.
Yet, despite their increasing demand for value, consumers are not reducing food expenditures, but instead have become more sophisticated in how they spend their money. But in spite of the increased emphasis on value, Japanese consumers are still among the most discriminating in the world in terms of quality: they will not purchase poor- quality products, no matter how low-priced.
Buyers in the Japanese market stress superior value (cost + quality + exceptional characteristics) as the touchstone for success in this market. Moreover, consumers are increasingly showing an interest in the details about how a product differs from its competition.
Japanese trade sources urge U.S. companies to take a keen interest in how their products are promoted and sold by retailers, and to capitalize on the special appeal that U.S. landscapes and consumer lifestyles hold for the Japanese. Japanese consumers are drawn to products promoted in a way that says, "That's America."
Retailers Moving With the Times
Western-style family restaurants have scored a major hit in Japan. These outlets provide excellent targets for U.S. exporters, thanks to their general receptiveness to imports; continuous need for a wide variety of items such as beef, chicken, seafood, pork, pasta, french fries, corn, carrots and peas; and centralized buying departments that purchase products in large quantities. They present real opportunities for U.S. food companies seeking a toehold in Japan.
Japanese consumer interest in healthy foods is strongly manifest in the family-style foodservice sector. Suppliers report that restaurants are now requesting more detailed nutritional information and caloric content to provide to customers.
Western-style family restaurants are gearing up for expansion in the Japanese market. Proposed restaurant openings for 1997 were reaching their highest levels ever.
Five major family restaurant chains--Skylark, Royal, Denny's Japan, Coco's Japan and Western (Seiyo) Food Systems--have announced plans for 207 additional restaurants--a 60-percent increase over 1996.
These chains have resolved to start making active and aggressive investments. The most willing to take the expansion plunge is Skylark. Thanks to its recently revised menu, which successfully introduced a low-priced "Gusto" menu based on improved unit prices, the company has begun to focus on opening 80 new Skylarks over the next few years. A Skylark representative has boldly projected that in four years the number of family restaurants in Japan will jump by 1,000.
Because there are no regulations complicating the opening of family restaurants in Japan, there is an atmosphere of true competition. Adding to this competitive atmosphere is the recent drop in land prices. The result has been that, during 1996, locations in urban centers became more accessible, which has led to a scramble among retailers for prime location space. Industry representatives expect that this rate of expansion and competition will continue to escalate well into the next century.
In addition, recent policy changes are enabling fast-food operators such as McDonald's to establish smaller operations, allowing them to participate in the trend toward opening food courts in shopping centers. In 1996, McDonald's increased its Japanese locations by a full third to a total of 2,227 stores, and it plans to continue to expand.
Cultivating the Market
Though they still relish traditional dishes, Japanese consumers are relatively open to foreign foods, encountering new dishes while eating out and when traveling abroad. In supermarkets and department stores across the country, these consumers routinely shop for Florida grapefruit, California cherries, Hawaiian papayas and New Zealand kiwifruit, as well as Kentucky bourbon, California sake, Chinese beer and Russian vodka.
FAS Agricultural Trade Offices (ATO's) in Tokyo and Osaka are helping U.S. enterprises capitalize on the burgeoning opportunities in Japan's HRI sector. Recent ATO Japan promotions have featured "Great American Regional Cuisines," providing HMR menu concepts to key decisionmakers in the HRI sector. Foods and menu concepts from the Eastern Seaboard, Southern/Caribbean, Southwest, Pacific Northwest and other areas are crucial to promoting distinctive American cuisines.
The convergence of consumer
trends in the United States and Japan positions U.S. agriculture
to meet growing demand in the Japanese consumer market for
high-quality, nutritious, convenient foods; these foods are the
product of superior food safety systems.
The Japanese consumer's insistence on quality in substance and presentation manifests itself in a deepening interest in highly differentiated U.S. foods. However, U.S. interest in exporting HMR and other products must be tempered by the realization that products often need to be adjusted to the Japanese palate. In order to succeed, U.S. exporters must demonstrate awareness of traditional Japanese products.
In addition, U.S. exporters' ability to capitalize on the current, unprecedented market opportunities for consumer foods will depend in part on forging strategic alliances by cultivating sustainable long-term relationships with Japanese importers, wholesalers and retailers.
The author is the Executive Director of FAS' Agricultural Trade Offices in Tokyo and Osaka, Japan. Tel: (011-81-3) 3505-6050; fax: (011-81-3) 3582-6429.
Cajun Cuisine Spices Up Food Fair
by Daniel K. Berman
Consumers were wowed by the food, drink and entertainment offered at the Cajun Café, an exhibit at the Utage 1997 food fair organized by the Osaka Agricultural Trade Office (ATO), the Louisiana Department of Agriculture and Forestry and Friendly Restaurant Co., Ltd. ATO Osaka decided to showcase Cajun cuisine because it features Japanese staples--rice and seafood-- and capitalizes on consumers' appetite for spicy ethnic foods.
Using only U.S. ingredients, Cajun chefs prepared the dishes to the accompaniment of a Louisiana band, an approach that proved highly successful in attracting consumers to the exhibit. Over 16,000 visitors feasted on fried alligator, jambalaya, gumbo, blackened chicken, blackened catfish, rice and stuffed baked potatoes, seasoned with Tabasco sauce and washed down with Dixie beer. ATO Osaka also persuaded the nearby Hyatt Regency Hotel to showcase a buffet of 20 Cajun foods and Abita Springs beer in its main restaurant during the fair. This promotional coup drew in 2,000 diners.
To publicize these events, ATO Osaka prepared and distributed press kits and leaflets, and held a press conference and a Cajun food tasting at the Hyatt just before the fair opened. Media coverage of the band continued throughout the fair's 11-day run. At least five television segments and eight newspaper stories featured the Cajun food promotion.
The overwhelming appeal of the Cajun Café prompted Utage's chairman to declare it the best presentation of the entire fair. Friendly Restaurant Co. conducted a survey that indicated 80 percent of the guests would eat Cajun foods again, and is using the results to develop new menu items.
The author is director of the FAS Agricultural Trade Office in Osaka Tel: (011-81-6) 315-5904; fax: (011-81-6) 315-5906.
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