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Apr 29
0

How interesting is it to export to Japan?

By | Business | No Comments

Overall Market Summary

T he Japanese food processing industry is one of the worlds’ most advanced and sophisticated. Japan’s food manufacturers produce a wide variety of products, from traditional Japanese foods to health foods for infants and the elderly. Japanese food producers focus mainly on the domestic market, balancing the need to maintain market share with traditional product lines while developing creative products to attract consumers, who are always on the lookout for new and innovative foods. As a result, Japanese food manufacturing is characterized by high rates of product turnover.

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T he largest food processing companies developed from traditional breweries that expanded their portfolios to include foods, distilled spirits, beverages, etc… Several other market leaders emerged from the dairy industry. Processed food products that are increasing in popularity include yogurt, meat, soups, and ramen. Popular beverage items include tea, vegetable juice, distilled spirits, and energy drinks. Frozen foods consumption has recently grown as well, due to their convenience and improvement in product quality. As more people seek single-size portions or do not have time to cook every meal, convenience and packaging are critical factor in product development.

 

M arket entry takes time in Japan, especially for ingredient suppliers. Manufactures are frequently searching for specific ingredients but can be unwilling to disclose new product development plans, and may be reluctant to candidly discuss product sourcing needs.

T he challenge for U.S. ingredient suppliers, therefore, is to build a relationship with potential manufacturer partners so that when new product needs arise, you will have a pre-existing relationship. In order to capitalize on those opportunities it is important have product and representation in-country. Therefore, building a relationship with a local importer is a critical early step.

Domestic Companies

The Japanese food processing industry is dominated by 15 major companies of which Kirin Holdings Co., Ltd is the largest (See Company Profiles). Total production of processed foods, excluding beverage and alcohol, has risen continuously except for a short-term slump from 2008 to 2011.

Ready-to-eat meals, processed grain products, and livestock products have been the main drivers of that growth. Growth in production of ready-to-eat meals in particular has been strong, increasing 54.1% from 2010 to 2017 per the Ministry of Agriculture, Forestry and Fisheries.

Key Market Drivers

Key market drivers for the food processing sector include:

 Continued diversification of the Japanese diet.

 As the number of women entering the workforce continues to increase– and marriage and fertility rates continue to decline– it is increasingly common that Japanese consumers purchase prepared foods instead of cooking at home.

 A declining and aging population.

 Weak economic environment, causing processors to seek out lower-cost food inputs and international processing options to maintain competitive prices. (However, a weak Japanese yen has recently caused a slowdown in import growth).

 Heightened consumer and retailer food safety concerns.

 Increasing interest in health and functional foods with an emphasis on the needs of the growing senior population.

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Large food processors and retailers are increasingly purchasing sizeable quantities of product directly from trading companies.

USDA Foreign Agricultural Service. GAIN Report Number: JA8503

Check list for market entry.

Market Structure & Entry

The Japanese market structure and distribution system is different from the U.S. or European Marjet. The following illustration is a basic flowchart showing how imported products tend to enter and move through the traditional Japanese distribution system (US point of view):
Ingredient products will most likely be handled by a:

  1. General trading company
  2. First-line wholesaler
  3. Second-line wholesaler
  4. Food processor
  • graph japanese

Market Entry

It can be difficult to enter the Japanese market. Regulations on ingredients and additives are very strict, and exporters must ensure that their products are permitted in Japan. For additional information, please see below (Section C. 1.). As part of the product clearance and approval process, it is also common that local processors and the Japanese government request a great deal of specific information regarding product handling and composition. In addition, Japanese manufacturers have a reputation for demanding very high standards of product quality and consistency; while also having a reputation for working collaboratively with suppliers to develop long term supply relationships.

Despite the work involved, the Japanese market has enormous potential.
Strategies for entering the Japanese market will vary depending on product characteristics, competition, and the market environment. However, buyers in the food and beverage industry often prefer to find new products at large trade shows, or specially-targeted trade showcases, where they can look at many products at once. Therefore, the best way to learn about the market while getting the chance to talk to potential business partners is to participate in one of Japan’s many trade shows.

The largest food related trade show in Japan is FOODEX Japan, which takes place every March. Depending on your target market, other smaller trade shows can also be useful

Entrance Strategy

Before You Start:

  1. Ensure your company has the production capacity to commit to the market.
  2. Ensure your company has the financial and non-financial (staff, time, etc.) resources to actively support your exported product(s).
  3. Evaluate whether your company has the ability to tailor your product’s packaging and ingredients to meet foreign import regulations, food safety standards, and cultural preferences.
  4. Evaluate whether your company has the necessary knowledge to ship overseas, such as being able to identify and select international freight forwarders, manage climate controls, and navigate export payment mechanisms, such as letters of credit.

Trends

Health&Beauty

Products that offer health and beauty or anti-aging benefits have always been popular in the Japanese market. A recent study showed that over 70% of Japanese feel the need to live a healthy lifestyle, and over 90% of women have experience dieting. A healthy diet is an extremely valued concept. The official definition of functional foods (FOSHU) and drinks in Japan is “food which is expected to have a specified effect on health due to the relevant constituents or food from which allergens have been removed” such as dietary fiber, oligosaccharides, non-calorie sweeteners, calcium, iron, mineral absorption promoters, beta-carotene, chitosan, specified soy protein, collagen, polyphenols, lutein (e.g. blueberry smoothies) lactic acid bacteria cultures (e.g. yogurt or chocolate), soy isoflavones, and germinated brown rice (GABA) have been included.

Research has shown that over 80% of Japanese women are aware of the term “anti-aging.” Japanese green tea (maccha) has a well known reputation for containing ingredients to make skin beautiful. Maccha products contain the entire leaf, ground to powder. Through mass media and SNS, maccha- based beverages and foods have enjoyed continued gains in popularity.

Another example of such products is a popular gummy candy that has added collagen to improve skin health. Food manufacturers are
always looking for the next anti-
aging breakthrough ingredients,

so exporters of ingredients with documented anti-aging properties are well positioned ot take advantage of that demand. It is especially helpful if exporters can offer something that is not yet widely available.

The major distribution line for these functional food products is through supermarkets and convenience stores.

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Jul 17
0

How to support the Quality System with the Game Theory

By | Agrofood, Agronomy, Business, Food for thought, Gaming | No Comments

T he picture  is showing the Prisoner’s dilemma in a Matrix. This is used to understand clearly the possible choices when a company has to make an important decision: a strategic decision.

Imagine two prisoners held in separate cells, interrogated simultaneously, and offered deals (lighter jail sentences) for betraying their fellow criminal. They can “cooperate” (with the other prisoner) by not snitching, or “defect” by betraying the other. However, there is a catch; if both players defect, then they both serve a longer sentence than if neither said anything. Lower jail sentences are interpreted as higher payoffs (shown in the table).

The prisoner’s dilemma has a similar matrix as depicted for the coordination game, but the maximum reward for each player (in this case, 3) is obtained only when the players’ decisions are different. Each player improves their own situation by switching from “cooperating” to “defecting”, given knowledge that the other player’s best decision is to “defect”. The prisoner’s dilemma thus has a single Nash equilibrium: both players choosing to defect.

What has long made this an interesting case to study is the fact that this scenario is globally inferior to “both cooperating”. That is, both players would be better off if they both chose to “cooperate” instead of both choosing to defect. However, each player could improve their own situation by breaking the mutual cooperation, no matter how the other player possibly (or certainly) changes their decision.

Nash equilibrium has been demonstrated by J. Nash in a real situation.

In game theory, the Nash equilibrium is a solution concept of a non-cooperative game involving two or more players in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his own strategy.

In Europe I do not know anybody else, except Casaqa, who is trying to integrate quality management and business management systems. I’ve formed a very definite opinion about this and why the quality management system is believed to be so distance to the business management. I would like to share it.

1) The food company are particularly narrow-minded about the different processes, and  I think we’ll just have not to compartmentalize everything.

2) The people don’t know the applications of the Game Theory.

3) They also think that management systems must necessarily derive from an external scheme, often imposed by supermarkets, and that nothing can be proposed from within the same companies as in the automotive business happens.

Game theory is a major method used in mathematical economics and business for modeling competing behaviors of interacting agents. Applications include a wide array of economic phenomena and approaches, such as auctions, bargaining, mergers & acquisitions pricing,fair division, duopolies, oligopolies, social network formation, agent-based computational economics, general equilibrium, mechanism design, and voting systems; and across such broad areas as experimental economics, behavioral economics, information economics, industrial organization, and political economy.

I believe that game theory should be use in the Quality Management System too.

Business is a high-stakes game.The way we approach this game is reflected in the language we use to describe it. Business language is full of expressions borrowed from the military and fro sports. Some of them are dangerously misleading. Unlike war and sports, business is not about winning and losing. Nor is it about how well you play the game. Companies can succeed spectacularly without requiring others to fail. And they can fail miserably no matter how well they play if they make the mistake of playing the wrong game.

The essence of business success lies in making sure you’re playing the right game. How do you know if it is the right game? What can you do about it is the wrong game?

In order to help managers answer those questions, I am using a framework (developed by Adam Brandeburg, Barry J. Nalebuff, but updated through Alexander Ostoerwalder) that draws on the insights of the game theory. Basically game theory is about to change the game of business, updating your model business. The point is to use this method into your quality system. The decision taking process is a process like the “maintenance” or the “production”.

The game of business is all about value: creating it and capturing it. Who are the participants in the enterprise? To describe them some Author introduce the Value Net – a schematic map designed to represent all the players in the game and the interdependencies among them.

The Value Net reveals two fundamental symmetries in the game of the business:

a) the first between customers and suppliers

b) the second between substituotors and complementors.

Managers understand intuitively the along the vertical dimension of the Value Net, there is a mixture of cooperation and competition.

This method is very interesting to manage the “process decision ” and to give a tool to analyze the reality as a game. This means to help the managers and to give a contribution to achieve a Quality Management System that can include the ” business model management” .