The Journal The Authority on Global Business in Japan

Consumers in the United States have long been able to enjoy food that is grown and prepared organically. Products that are gluten-free, contain no genetically modified organisms, or otherwise meet the needs of segments of the population with special dietary requirements or preferences are also big business there. But things are not quite the same in Japan.

While the country has a well-earned reputation for healthy food—and a diet that is traditionally rich in vegetables, fruit and seafood—organic options have not taken off here.

That could soon change, however. A number of US companies that took part in this year’s Foodex Japan trade show—held March 6–9 at the Makuhari Messe exhibition center—have ambitions to change that.

OREGON TRAIL
Sandi Funk, sales manager for regional exports at Bob’s Red Mill Natural Foods, Inc., talked to The ACCJ Journal about their early experiences. “We are relatively new to the Japanese market and we have only been selling here for nine months or so, but our organic products are already doing very well.”

A wide range of products from the company, which is based in the Oregon town of Milwaukie, are available at high-end supermarkets, such as National Azabu and Seijo Ishii, as well as through Costco outlets.

“We have been very lucky to come into Japan with a great distributor,” she said, “although there have been some hurdles that we have needed to overcome, and even now we cannot sell our entire range here.”

Japan’s import regulations are notoriously demanding, and providing all the required documentation for products that are a blend of ingredients is extremely difficult—in part because the exact make-up of Bob’s Red Mill products is proprietary.

Sandi Funk, sales manager for regional exports for Bob’s Red Mill Natural Foods, Inc.

The company manufactures a wide range of whole grain foods—from flours and meals to cereals, rolled oats, beans, soup mixes, nuts, nutritional boosters, baking essentials, and mixes for cakes, muffins, and pancakes—all of which will bear one or more of the labels indicating that the product is gluten free, organic, kosher, or identity-preserved, meaning it contains no genetically modified organisms.

The company is reaching out to new markets by approaching bakeries that had previously purchased in bulk from Costco because it was difficult to source high-quality flour.

“We know there is demand here because Costco said it only wanted to stock our organic products, while other retail outlets want to sell our gluten-free lines, perhaps because these sorts of items have not really been readily available in this market before,” Funk added. Studies suggest that a mere one percent of the Japanese population is gluten intolerant. This still represents a significant number of individuals.

Awareness of the benefits of consuming food and drink that is certified as being organic will certainly climb as products become more readily available.

“We have found that it was the same in other markets, but people become more educated about what they are eating and the importance of a healthier diet; so we are confident this market is going to be a very good one for us moving forward.”

Jim Etters, director of land management for the Yocha Dehe Wintun Nation’s Seka Hills headquarters (left) and Michael Moretti of American Taste.

NATIVE AMERICAN
Japan imports about $13 billion worth of food and other agri­cul­tural products from the United States each year, and some 53 US companies took part in this year’s Foodex—the largest such trade show in Asia. The USA Pavilion included the “Taste of America” tasting booth featuring items such as Calrose rice, California olives, Sunkist oranges, Florida grapefruit, and US soybean products.

Michael Moretti of American Taste, a group that works with trade show organizers to publish online digital pavilion guides, believes that Japan will grow into an important market for companies that are delivering healthy and organic foodstuffs, such as American Indian Foods, which had a large presence at the event.

“We have been supporting producers coming into Japan for the past 12 years and, in that time, I can say there has been an increasing recognition of the importance of healthy eating and that obesity can be a problem—even in a country like Japan,” he said.

“I feel that people are coming back to the understanding of the need to eat food that is grown organically, and consumers here are more aware of food safety issues. US brands have strong reputations for quality and safety, and I also believe that there is a good deal of respect for the food culture of our indigenous tribes.”

The Yocha Dehe Wintun Nation, a federally recognized tribe of Wintun people who have traditionally lived in the oak forests and rolling hills of California’s Capay Valley, retains a deep commitment to the land and the food that it produces.

Today, the tribe has 14,000 acres of agriculture and produces wines, olive oil, wildflower honey, nuts, beef jerky, and vinegar, a solid percentage of which finds its way to Japan.

“This is the third time we have taken part in Foodex, and we have found that it has served us very well, because our items are now available at 40 retail outlets in Tokyo and Kyoto,” said Jim Etters, director of land management for the tribe’s Seka Hills headquarters.

“Consumers here are definitely more educated about the benefits of eating healthy and understand that native American tribes have that as part of their cultural heritage,” he said. “People want to know what is in their food.”

Etters said that Japanese consumers also want to purchase unique products with an unusual and interesting story, which the Yocha Dehe Wintun Nation provides. The tribe’s honey comes from its own 3,000 beehives, and the beef jerky is a product of its own cattle.

American Indian Foods represents producers across the United States, with products on display including a wide range of seafood, such as wild Alaskan salmon, oysters, clams, Dungeness crab, black cod, halibut, and roe. Other specialty foods that turned visitors’ heads were buffalo meat, seasonings and spices, wild rice and beans, and snack foods.

Randy H Liu, representative director of Graceland Fruit

RIPE FOR GROWTH
The best-selling items in Japan for Graceland Fruit Inc., which is headquartered in the northern Michigan town of Frankfort, are dried cranberries and blueberries, although the company also sees scope for expansion in this market.

“The organic market in Japan is still relatively small, which makes it difficult to launch new products because the economic scale is too small,” said Randy H. Liu, represen­tative director in Japan.

“It has helped that Japan and the United States entered into a reciprocity agreement for organic certification more than 10 years ago, which I think has encouraged retailers to be more positive about stocking organic products, and there is gradual growth,” he said, “but the scale of the market here is still insufficient for major manufacturers.”

On the plus side, he added, the global trend is towards organic foodstuffs and healthy eating, so it is inevitable that the concept will continue to gain ground in Japan.

Graceland Fruit’s infused, dried products have been available in Japan for more than 20 years—it was the company’s first foray into an overseas market—and make a “healthy alternative” to many of the snacks that are available here, Liu said.

“Doing business here is different to anywhere else in the world,” he added. “It takes time and you have to go about every step of the process in a very painstaking way. A company has to have patience if it wants to develop a new product here, because it can take up to two years to take that product from design to delivery. Elsewhere, that process is typically a year, but it can be a lot quicker.

“Japan does not cut corners,” he emphasized. “They are com­mitted to delivering good quality products to their consumers and you have to be able to meet those high standards if you want to do business here.”

Julian Ryall is Japan correspondent for The Daily Telegraph.
Japan does not cut corners . . . you have to be able to meet those high standards if you want to do business here.