Archive for the ‘Food & drink’ Category

European winemakers fret over competition from Chile

Monday, August 25th, 2014

The competition: Wines from Australia, Chile and France with retail prices below ¥1,000

The competition: Wines from Australia, Chile and France with retail prices below ¥1,000

During the first half of the year, sales of wine from Chile exceeded those of wines from Italy, thus making Chilean wine the second most popular imported wine in Japan, and apparently, Chile is now gaining rapidly on No. 1, France. The main reason is the Chile-Japan Economic Partnership Agreement signed in September 2007, after which the tariff on Chilean wine started to decrease gradually from the standard duty on foreign wines of either 15 percent of import price or ¥125 per liter. Right now the tariff rate for Chilean wines is 5.8 percent, and it will be zero in April 2019.

According to a Jiji Press report, the further the tariff drops, the more sales increase. More significantly, the amount of wine being imported has gone up. In 2007, when the EPA went into effect, Japan imported 10,517 kiloliters. But 2013, the volume was 36,435 kiloliters, which is an average annual growth rate of 20 percent. For the first half of this year alone, 17,349 kl entered Japan, and since the end of the year is the big season for wine, it’s clear that this year’s volume will exceed last year’s. And note that France exported 19,093 kl to Japan in the first six months of 2014.

Nevertheless, importers have told Jiji that the EPA isn’t as big an influence as it seems. One wine industry association said that Chile’s product is more suited to Japanese tastes, whatever that means. But the fact is that other wine-making countries and regions are paying close attention to the Japanese market and may be worried about Chile’s ascendance. For one thing, while sales of alcoholic beverages in general have been on the decline, the consumption of wine has been going up. At present, the average Japanese person consumes a little less than three bottles a year. Consequently, Japan signed another EPA with Australia in July. According to the terms of the agreement, the tariff on Australian wine will disappear in seven years, which is faster than the rate reduction with Chile.

So Europe is especially anxious to get its own EPA hammered out, since it’s losing ground to these New World winemakers. Wine and cheese are two of the main products under discussion.

It may already be too late. According to a report in the Hokkaido Shimbun, Hokkaido Prefecture’s most prominent convenient store chain, Seico Mart, has seen a 10 percent increase in the sale of Chilean wines over the past year, or one-fourth of the chain’s entire wine sales revenue. That’s even more than French wines. The newspaper narrows the appeal down better than Jiji, saying that Japanese people prefer the slightly sweeter flavor of Chilean wine. But the real reason is the price. The bestselling wine in the chain is a Chilean wine that goes for ¥480.

A common retail belief when it comes to selling wine to people who aren’t connoisseurs in Japan is that ¥1,000 tends to be the limit, and Chilean wine is consistently below that ceiling.

Whatever you do, don’t call Nestle’s coffee ‘instant’

Friday, August 15th, 2014

According to the business magazine Toyo Keizai, on July 24, Nestle Japan announced that it was quitting four industry groups it belonged to: the Japan Fair Trade Coffee Conference, the All Japan Coffee Association, the Japan Instant Coffee Association and the Japan Coffee Importers Association. These groups have, according to Toyo, had problems acknowledging Nestle’s description of its new manufacturing method for coffee products that it started using last September.

Nestle no longer calls its Gold Blend and Nescafe Excella brands “instant coffees,” but rather “regular soluble coffee,” and insists that others do the same. Two months ago, these associations revised their industry fair competition rules, saying that they couldn’t allow Nestle to use such a description in their advertising, so Nestle decided to not work with them any more.

Nestle's Dolce Gusto capsule-style self-service machine set up in a grocery store

Nestle’s Dolce Gusto capsule-style self-service machine set up in a grocery store

Nestle says the manufacturing method is different, so it has a right to call its coffee something different. Most coffee called “instant” these days is made by freeze-drying liquid concentrated coffee liquor. Soluble coffee, however, is a “unique” blend of pulverized roasted coffee beans and dried coffee concentrate. To the layman and, obviously, other members of the coffee industry in Japan, that description doesn’t qualify as much of a distinction, but Nestle wants to stress that the new method makes for coffee that is closer to the real thing, meaning coffee brewed from ground roasted beans.

An executive of the All Japan Coffee Association explained to Toyo that his group’s reluctance to accept the new designation is based on complaints it’s received from consumer groups that say people may buy Nestle’s new product under the mistaken assumption that it’s “real regular coffee.” And as far as the new designation goes, people who don’t know what “soluble” means may think that regular coffee grounds dissolve in hot water, which, of course, they don’t. In any case, “soluble” is a pretty good description of instant coffee in general, so the distinction is moot.

But Nestle Japan can pretty much do whatever it wants since its products account for 70 percent of the — pardon us — instant coffee market in Japan. It wasn’t until 1960 that the importation of coffee beans to Japan was liberalized. The next year importers started bringing in instant coffee, and by the middle of the decade Nestle’s Nescafe was the best-selling brand in Japan, as it was in the world.

Then, in 1967, Nestle Japan started selling Gold Blend, the first instant coffee to use the freeze-dried method developed by Nestle at its headquarters in Switzerland. The Japan affiliate was nervous, though, because it thought Gold Blend would “cannibalize” sales of Nescafe, so it made two different advertising campaigns: Nescafe for everyone, Gold Blend for more discerning consumers.

The Gold Blend commercials became famous for using well-known “artistic” talent, like novelists, classical musicians and kabuki actors. The ads were a success. Instead of eating up sales of Nescafe (which soon became Excella) Gold Blend’s sales augmented them. Eventually, Excella had a 50 percent share and Gold Blend a 20 percent share.

In 2012, Nestle Japan chalked up ¥7.88 trillion in sales, which boiled down to ¥1.2 trillion in profits. Respectively, those figures represented 2.3 percent and 25 percent growth over the previous year. Nestle is the biggest food-related company in the world. Their products are sold in 140 countries, and the headquarters refers to its Japanese business as a “miracle,” since demand is shrinking almost everywhere else. And it’s not just coffee. Nestle also makes Kit Kat, the most ubiquitous chocolate treat in Japan because of its auspicious associations with entrance exams. Until 2002 Nestle Japan spent ¥3 billion on TV commercials to reinforce this association and now distributes free Kit Kat bars in business hotels where university entrance exam takers stay to study before the test. They’ve become indispensable.

Now Nestle’s big scheme is Nescafe Barista, a series of refill systems it is selling to homes. The system is built around coffee making machines that use prepared single-serving capsules of its soluble coffee, and this is where the designation is important. Though it may be instant coffee by another name, that new name gives more of an impression of brewed coffee, which is important for another new system, called Nescafe Ambassador, that is being promoted to offices. Rather than capsules, these machines use larger containers of soluble coffee.

The pitch is made directly to employees of companies rather than people in charge of office services. An employee registers as an “ambassador.” Nestle then sends him or her a coffee machine, a supply of soluble coffee and a piggy bank. The employee sets up the machine in the office and other employees who want coffee deposit ¥20 in the piggy bank whenever they enjoy a cup. Refill containers last about a month or so, after which the money is sent to Nestle.

Conventional office coffee services involve a company representative who maintains and fills the machines, adding significantly to the cost. Ambassador cuts costs by having the employees take care of everything, and is meant to replace office-set vending machines and even convenience store coffee, which are now the main sources of break-time refreshment, since many companies are doing away with free coffee and tea on the premises to cut down on expenses. Coffee from vending machines and convenience stores cost at least ¥100 a cup/can.

Three months after starting the system in 2012, Nestle had distributed 60,000 machines. Toyo says that the company projects more than 100,000 machines per year from now on. And since there are an estimated 6 million offices in Japan, that’s a lot of potential soluble coffee sales, though it should be noted that canned coffee, which for years was unique to Japan, commands a sizable share of the coffee market, especially among workers, both white collar and blue. But then, Nestle sells canned coffee, too.

Inflation Watch: Food manufacturers offering less

Saturday, August 2nd, 2014

CIMG3562

Use your noodle: ¥198 regular price 5-pack of Aeon instant ramen vs. ¥198 sale price 3-pack of Sapporo Ichiban instant chanpon

Economists in Japan have been carefully scrutinizing buying trends since the consumption tax was raised in April. Everyone has noted that buying has dipped by at least 4 percent since the 3 percent tax hike went into effect, but many think that it will rebound later in the year since so many consumers bought a lot of stuff just before the hike. And it is also true that some prices of goods and services have gone up, as well, especially food, but for the most part makers have tried to keep them the same, despite the fact that the lower yen has resulted in higher prices for imported ingredients, not to mention increased demand for all food products in developing countries. In addition, the higher price of oil has boosted the cost for packaging.

There’s, of course, one tried-and-true solution to the problem of stabilizing resale prices when costs go up: reducing volume. Rather than raise prices, especially at a time when consumers are specially sensitive to any change, manufacturers trim the amount being sold, according to Asahi Shimbun. Nippon Ham, for instance, did not change prices on 82 items in its product line but did reduce the amount being sold by an average of 10 percent. The company’s European sausage used to come in bags of 7 weighing 140 grams. For the same price, it’s now 6 sausages, or 120 grams. The company’s main competitor, Ito Ham, however, has decided to take a chance and increased the price of its pork products, saying that it was inevitable because worldwide demand for pork has risen recently.

The confection industry has been affected as well. Lotte cut the volume and weight of 6 products. Meiji shrunk 10 of its chocolate items, citing a 20 percent increase in cocoa prices from two years ago: Its best-selling Almond Chocolate treat went from 23 pieces to 21.

Chain restaurants are also dealing with the environment. Ringer Hut has increased prices on a number of its chanpon dishes by 3 to 5 percent, mainly due to higher prices for shrimp grown in Thailand, as well as higher transportation costs.

Dairy prices and volumes have changed, but for a slightly different reason. Morinaga has increased the price of a standard block of butter by ¥10, and cheese prices by about 7 percent. Snow Brand is boosting prices for 17 cheese items by 5 to 14 percent. Since Japan’s dairy industry is protected, much to the disappointment of the U.S., the problem isn’t imports or competition for ingredients abroad, but rather economic factors within Japan. Production of milk has been dropping due to an acute labor shortage and the fact that as older dairy farmers are retiring there is no one to take over their businesses.

But even if you’re on the lookout for such price and volume changes, you can sometimes be fooled. Recently, we came across packages of Sapporo Ichiban instant ramen in a discount store for less than ¥200, which we thought was very cheap for a so-called name brand. Usually, multi-packs of instant ramen from companies like Sapporo and Nissin cost more than ¥300 regularly and about ¥250 on sale. Private generic brands usually cost about ¥200 for the same amount.

So when we saw the cheap Sapporo Ichiban pack and bought it, it wasn’t until we left the cashier that we noticed the pack only contained three servings. Traditionally, multi-pack ramen has five servings. It was a stupid mistake, and we wondered how many other people picked up the pack without realizing. The point is that Sapporo Ichiban didn’t sell 3-packs of instant ramen before the consumption tax hike, so it’s obviously a sales strategy, and one we’ll just call clever, not underhanded.

A modest proposal for alleviating the endangerment of Japanese eels

Sunday, July 27th, 2014

Fish fans: People waiting in line at a popular eel restaurant near Minami Senju Station in Tokyo

Fish fans: People waiting in line at a popular eel restaurant near Minami Senju Station in Tokyo

This year, doyo no ushi no hi, the “day of the ox,” falls on July 29 in accordance with the old Chinese calendar. Counterintuitively, Japanese people don’t celebrate the day by eating beef but rather eel, because, supposedly, eel, or unagi, helps maintain a person’s stamina during the hottest days of summer. But it should be noted that the custom of eating eel is commercial in origin. According to legend, the tradition started in the 18th century in Hino, Western Tokyo, where nobody ate eel because the fish was a kind of local deity. An inventor named Hiraga Gennai came up with a publicity campaign to get people to eat unagi on doyo no ushi no hi because both ushi and unagi start with the “u” sound. The campaign worked, and now everybody eats unagi on doyo no ushi no hi. Well, maybe not everybody, but enough to drive Japanese eel to the brink of extinction.

Japanese eel for consumption are caught in the wild as fry and transported to eel farms throughout Asia. Eel is now on the International Union for Conservation of Nature‘s endangered red list, and so the environment ministry made the same designation on its list of at-risk species. However, this information has been tempered somewhat lately by media reports saying that the eel catch was higher this past year, thus driving the price of imported eel, mainly from China and Taiwan, down considerably. Consequently, eel dishes on the 29th may be cheaper in some places than they were last year.

Unagi fans will see this as good news, but it isn’t. The reason eel is on the endangered list is that Japanese people catch and eat too much of the fish, which wasn’t the case before the mid-1980s, when eel was considered something of a delicacy eaten only on special occasions. In other words, the cheaper the eel, the more likely eel stocks will be decimated.

Japan not only is the major consumer of Japanese eel, it is by far the major consumer of all eel: 70 percent of eel caught in the world is eaten by Japanese people. The speed at which Japan consumes eel has outpaced the species’ ability to reproduce itself. Japan first started buying eel overseas in 1980, mainly in Europe, but wild eel has been protected there since 2009 when it was declared endangered by the European Union.

Japan is trying to import more eel from Southeast Asia. Right now Japan itself produces 20,000 tons of unagi a year on farms, about half the amount at its peak in the late 90s. In 2000, Japan imported 130,000 tons from China and Taiwan. That amount dwindled to 32,000 tons by 2013, and yet eel prices in restaurants are still cheaper than they were in the 1980s. Why? Because so many restaurants serve eel. Before the bubble era, eel was only consumed in specialty restaurants and rarely at home. Now, even fast food chains serve eel; or, at least they do on doyo no ushi no hi.

And that may be where the problem lies. Last year, Osaka Gas conducted a survey asking consumers if they plan to eat unagi on ushi no hi, and 30 percent said they would. The biggest portion, 57 percent, said they hadn’t decided. Among those who said they definitely would not eat eel, one-third explained that eel was too expensive, another third said they don’t really like eel, and the rest said they’d eat it some other day. (A mere 2.6 percent said they wouldn’t eat eel because it’s endangered.)

While 30 percent doesn’t sound like a large portion, we’re talking about one day out of the year, a day when even people who don’t eat eel regularly feel the desire to eat eel, because the media makes a big deal out of it. The problem is that there are no statistics about eel consumption in Japan, only eel production, but we can assume that everything produced and imported is eaten here, since Japan doesn’t export eel. And as Minako Saito points out in her Tokyo Shimbun column, eel isn’t a hugely popular delicacy like fatty tuna (toro), it’s simply a “seasonal dish,” so if you divorce eel eating from doyo no ushi no hi, you may substantially be able to decrease the amount of eel that is consumed, because, according to government statistics, a relatively huge portion of eel is consumed on doyo no ushi no hi.

Like beef cattle, eel became the victim of an affluent society that thought everyone, and not just its well-off members, should have the right to eat it whenever they wanted. As we now know, the worldwide taste for beef has led to major environmental collapse, and Japan’s taste for eel has driven the species to the edge of extinction; except that Japan doesn’t really have a huge taste for unagi. It’s mostly PR-driven, so if you stop the PR and allow consumption to drop to a more rational level, the price will go up and unagi stocks should grow.

Will rice cookers save the Japanese home electronics industry?

Monday, July 14th, 2014

Pricey rice: High function rice cookers on display at a discount electronics store

Pricey rice: High function rice cookers on display at a discount electronics store

It’s been well documented that the Chinese are considered the saviors of the Japanese tourist trade, but there’s more to the story than just tour numbers and hotel bookings. An article in the July 10 Asahi Shimbun described an odd and recurring dilemma at Kansai International Airport. Chinese tourists are buying Japanese-made rice cookers at the airport’s souvenir shops in large numbers. Since the purchases are made after the travelers have gone through immigration processing, they don’t have to pay duty, but at that point they’ve already checked their luggage, and the rice cookers in their boxes won’t fit into overhead bins in airplane cabins.

Some of the rice cookers will fit if they’re removed from the boxes, but people on these flights are buying more and more of the home appliances so in some cases there is no room for any of them, which means flight attendants have to assist in having these patrons check the items so that they can put them in the cargo hold, and as a result more and more flights back to China are being delayed.

Rice cookers became a very popular item among Chinese tourists in 2010, when visa rules were relaxed to allow travelers who weren’t members of organized tours to come to Japan freely. One of the clerks in the Osaka airport souvenir store told Asahi that he once saw a Chinese tourist buy six of the devices at one time. One Chinese businessman who comes to Japan on a regular basis says he’s always getting requests from acquaintances to buy rice cookers for them. This souvenir store, in fact, sells an average of 10 cookers a day, most of them high-end models, which can cost as much as ¥90,000.

Last April, during cherry blossom viewing season, the store sold an average of 20 a day. A representative of Yodobashi Camera Multimedia Umeda in Osaka told the paper that whenever Chinese tour groups visit the discount electronics store they usually buy more rice cookers than they have members. Yodobashi has a duty-free system for tourists, but actually most Chinese prefer buying their rice cookers in the airport, since the price isn’t any different and they don’t have to lug the things around with them prior to departure. But there is the problem of carry-on.

Why rice cookers? There are few appliances that reflect Japan’s so-called Galapagos design mindset as thoroughly as rice cookers. They basically do one thing: Cook Japanese rice in a way that only Japanese people prefer. The rest of the world doesn’t eat much sticky, white, short-grained rice unless it’s combined with sauce or other prepared foods, and that includes the rest of Asia. Even China, from which Japan first imported rice-growing techniques, isn’t big on rice as a separate dish. It prefers long-grain rice, which is always prepared with something else in mind, and while it is considered a staple, at mealtime it isn’t as important as other dishes. In the northern part of China, many people don’t eat rice at all, since they grow more wheat there due to the colder climate.

But as more and more Chinese tourists have come to Japan, they have discovered the unique joys of sticky white rice.  As incomes rise in China, people are broadening their food choices, and one of those choices is short-grain rice. If it’s Japanese grown, it’s even better, despite the high price. And the best way to prepare it is with a Japanese-made rice cooker.

According to the Japan Electrical Manufacturers Association, more rice cookers are manufactured in China than in any other country in the world, but the vast majority are inexpensive models with few features. The first Japanese rice cooker was made by Toshiba in the mid-1950s, and since then they have become extremely sophisticated. Some even include porcelain containers and functions that allow the user to make rice that tasted as if it were made the old-fashioned way, in a kamado, the traditional, charcoal burning Japanese stove. Now, apparently, Japanese manufacturers are incorporating functions that will appeal to Chinese users, such as the ability to cook long-grain rice and different kinds of porridge.

In its own peculiar way, the Japanese rice cooker has done more to extend a specific Japanese sensibility than any electronic device since the Walkman. As any Japanese person over a certain age will tell you, the preparation of rice is the most important culinary consideration with regard to the Japanese menu. Cooking rice the proper way is difficult and time-consuming. You have to wash the rice throroughly until the runoff water is utterly transparent. Then the rice has to sit in that water for a certain length of time. The pot used for cooking rice, a kama, is only used for rice. First the rice in the water is boiled and the flame reduced — which, before gas stoves, meant removing pieces of charcoal from the kamado. And the person doing the cooking has to stay and monitor the flame for at least 15 minutes.

Consequently, the rice cooker was a huge boon for housewives. It not only freed up their time so that they could cook other dishes simultaneously, it freed up cooking space. Most Japanese kitchens with natural gas have only two burners. When makers added timing devices, rice cooking became exponentially easier because it cut the time needed for preparation, especially in the morning when housewives had to prepare breakfast and lunchboxes. Reheated cold rice is normally not acceptable. That’s why the next development was the “jar,” a special device for storing already made rice to keep it warm for later in the day without drying out. When the rice cookers themselves incorporated jar functions, the appliance had become perfect.

But only perfect to Japanese people. Most everyone else in the world didn’t eat rice this way, but apparently the Chinese are catching on. It’s too much to hope that their sudden affection for Japanese style rice will single-handedly save Japan’s home electronics industry — not to mention Japanese agriculture — but you never know. Look what the Walkman wrought.

Won’t get fooled again? Fans and their money are soon parted

Friday, June 13th, 2014

Mayu Watanabe, center, a member of Japan’s all-girl pop idol group AKB48 members, shows off the winner's gown after taking the No. 1 spot of the AKB48's General Election 2014 in Tokyo, Saturday, June 7, 2014.

Hail the new queen: Mayu Watanabe, a member of Japan’s all-girl pop idol group AKB48 members, shows off the winner’s cape after taking the No. 1 spot of the AKB48′s General Election 2014 in Tokyo, on, June 7.

Several weeks ago we wrote an article about the female idol collective AKB48 and later received a message from a friend who told us he was in Tokyo’s Akihabara district, which the group calls home. He was in a shop that sells various used goods and reported that there were hundreds of “used” copies of AKB’s latest single on sale for only ¥100 each, even though the single had just been released.

The reason for the surplus was AKB’s famous premium system: if you buy a CD you get the chance to meet the young women in the group or, in this case, a chance to vote in one of AKB’s popularity contests, which are called “general elections.” The most recent of these, No. 6, was held June 7, where Mayu Watanabe received the most votes. “Tickets” that allowed fans to cast votes in that election were included in the group’s newest single, “Labrador Retriever.” The more singles you buy, the more opportunities you have to vote, which explains all the used CDs. The fans only need one copy of the song, but they bought multiple copies so that they could stuff the ballot box with votes for their favorite members.

Each voting ticket is printed with a special URL and a unique serial number. The holder of the ticket goes online, logs on to the election website, and casts one ballot by registering the serial number. After voting, that serial number cannot be used again.

An enterprising blogger on the site Gadget Tsushin decided to use the available data to figure out how much money the AKB organization made from this election. First, he checked the top vote-getters, starting at the top with Watanabe (159,854 votes), proceeding to second place with a girl named Sashihara (141,954) and one down to 80th place in the poll. He added up all the votes received by these 80 members and the sum was 2,277,635, which, by the way, was more votes than those cast the same day in the Nakano Ward mayor’s election.

CONTINUE READING about fan devotion →

Labor shortage cutting across all industries

Friday, May 9th, 2014

A recent report in the Mainichi Shimbun says that Japan’s number one gyudon (beef bowl) chain has seen its business suffer due to lack of workers. Sukiya’s policy is 24-hour service, but in many areas the company can’t find part-timers who are willing to come in during the wee hours. The company has shortened operating hours at about 250 outlets, and a few have even been closed altogether due to the labor shortage. The Mainichi reporter talked to some former Sukiya part-timers who said when they worked the midnight shift they often ended up all by themselves, meaning they had to do everything — cook, wait on customers, clean up, etc. — alone. Besides being nerve-wracking, the job wasn’t worth the wage that Sukiya was paying, so they quit.

Sukiya in Tokyo

Sukiya in Tokyo

Sukiya isn’t the only restaurant company that’s having this problem. Watami, the popular izakaya (drinking establishment) chain that has been called by some a burakku kigyo (a “black company” that exploits its workers), has announced it will close about 60 outlets by the end of the year, which represents 10 percent of all their stores, though the company characterizes this move as being more about rationalization. More personnel will be employed at the remaining outlets in order “to improve the work environment.”

There’s a certain self-relexive irony at work here since the success of chain restaurants in the past 10 years or so was built on a greater reliance on part-time workers, for whom companies don’t have to provide benefits and whose hours and wages can be managed more flexibly. Invariably, the point is to save money so that the chain can be more competitive in terms of prices, but with the labor shortage expanding into other industries, part-timers don’t have to work for restaurants, which notoriously don’t pay well and usually involve evening and night work.

Consequently, to keep the part-timers it wants, restaurant chains are having to increase wage offers in want ads, a move that runs counter to the part-time strategy.

CONTINUE READING about labor shortages →

RSS

Recent posts