Japan Journals: The largest food show in the world and yes, the $200 melon

"The Japanese market is a key driver for California agriculture, with 15 percent of our $7.5 billion export market. That's about a billion dollars worth of product. So the demand for California commodities there is already well established. But there is so much more potential.

When I traveled to Japan with Governor Schwarzenegger last fall, we saw countless examples of our international competitors with greater leverage in the marketplace, and not with a superior product. So I have a lot of faith in our ability to deliver the "California Grown" message to Japanese consumers, many of whom already understand what the California lifestyle is all about and, therefore, may embrace our commodities more enthusiastically than our competitors' products."
A.G. Kawamura, Secretary
California Department of Food and Agriculture

But what have our competitors been up to, and how can we continue to enhance the warm embrace between Japanese consumers and California?

California and its potential in the Japanese market was very much on the minds of the delegation of California Farm Bureau members who traveled to Tokyo months after the governor's visit in an effort to understand the changes taking place in a very dynamic marketplace. The purpose of the trip: to learn more about the new Japanese consumer and to understand the current and future roles that California farmers and ranchers must play to continue their significant relationship with Japan. One of the other main areas of focus was to understand those who have made significant strides in their efforts to compete with California.

Foodex—Mother of All Food Shows
One of the largest food shows in the world, Foodex, is held annually in Makuhari. The California Farm Bureau delegation knew that attending it would provide a sharper glimpse into what classic as well as new directions other countries (including ours) were going to take in order to satisfy Japan's new hunger for quality, extravagance, novelty and convenience. What trends will take hold in the Japanese market? How are other countries working to obtain a foothold into this complex marketplace? And what is the U.S. doing to continue to cultivate and enliven key relationships with the country?

We knew that packaging and consistent quality would be a big part of what we would see at the show. We weren't prepared for the enormity of it.

Nearly 4,000 booths covering several miles of space in a cavernous venue featured new food products complete with costumed mascots, beautifully appointed models and streaming video—all of which transfixed attendees. There were no shortages of imaginative ways companies found to attract potential buyers to their booths. And there were no shortages of languages spoken at Foodex either. Much of the show material was in English, Japanese, Chinese, Korean, Italian, German, Spanish and French. Most of the attendees had Japanese interpreters at all times.

What new things did we see? We noticed contrasts between health and decadence. Olive oils, (newly popular with the Japanese consumer). Additionally, vitamin-infused drinks, pickled items and fig products. On the decadent side, we sampled European cheeses and some of the finest—and paradoxically for the legendarily health conscious Japanese—fattiest meats available.

Products containing unique ingredients and produced by special manufacturing qualities were also popular. Specialized salts, vinegars and soybean pastes demonstrated this new trend as well as specialized pickles and jams.

Convenience was a theme throughout the show that all the members noticed. "On the go" products that could be easily popped into a microwave or self-heated were highlights. And those items that combined health and convenience obviously attracted attendees.

For member Bruce Fiock, who is a rancher, the beef products were of particular interest at Foodex.

"Mexico and New Zealand had impressive booths at the show—in fact, the Mexicans had a video showing the cattle grazing and the great care they take of the animals. We learned that the Japanese love their meat. We'd better get this market open soon or, with this increasing competition, we won't have a market to open."

George Gomes of CFBF was impressed with many of the countries participating in the event:

"Outstanding displays were Mexico, Taiwan, Spain, Italy, Demark and France. What was most surprising were the number and varied flavors of alcohol drinks."

The CFBF delegation also discovered everything from energy drinks, gelatin desserts, nuts and rice to coffees from Italy and an old standby packaged in more modern ways: sake. Other items ranged from soy ice creams from Taiwan to mango flavored jelly cups from Sri Lanka.

While we were dazzled by the imaginative displays from all over the world, CFBF members were disappointed with the U.S. exhibits, which most saw as in need of an "extreme makeover."

"The U.S. displays could have been stronger. I felt, overall that they were generic. I'd like to see more of a California presence in the future. I think the mystique of California to the Japanese people has a special power. We have many strong messages and need to take advantage of it. With the great start of the governor's visit, we must do more to make sure we don't drop the ball."
Tod Kimmelshue
Butte County, Almonds

The group noted that the independent nature of U.S. companies might have worked against the participants. There was a lack of an overall theme or focus, which was in sharp contrast to the displays featured by other countries at the Foodex event.

Relationships and Elbow Grease
But while several U.S. companies appeared to be lackluster in their approaches at the trade show, many are continuing to press on with a strong, constant and strategic focus on the Japanese marketplace. One significant U.S. player which has cultivated an enviable role is Sunkist.

"For us, it's a matter of constant contact," explained Russ Hanlin, Vice President of International Sales for Sunkist. "We've been in the market for decades and, through that time, have offered countless promotions. We have maintained long-term relationships and have ensured premium quality. For our efforts, Japan is now our largest export market."

"When the Japanese think of oranges, they think of Sunkist," said Dan Berman of the U.S. Foreign Agriculture Service during our visit to Tokyo. "Sunkist also introduced lemons into Japan and continues to promote their products on a regular basis—but they will have to continue to work hard to keep the enviable position they currently hold—Chile and South Africa are two of Sunkist's largest competitors."

The delegation did note that, while Sunkist still rules the citrus market in Japan, others are trying to elbow in for the multi-billlion dollar business, and from what we saw at Foodex, they are gaining on the U.S. edge at an astonishingly rapid rate.

California Rice Commission President Tim Johnson explains that they, like Sunkist, must also work hard to ensure "a place at the table."

"Others are ramping up," he said. "We are competing vigorously with countries like Australia. They are really pushing. But we think the 10 years we have been working with Japan will pay off in the long run. We're working hard to make sure that when the 2-cylinder truck stops to make its twice-daily sushi deliveries to the convienince stores in Tokyo, California rice will be inside it."

Supermarkets and $200 Melons
Nestled in elegantly patterned netting like newborns in a high-end nursery or wrapped individually like elegant gifts or even set artistically into wooden boxes, produce in Japan is taken very seriously. The CFBF team was amazed during our visit to a high-end grocery store in Tokyo. All of us…but one. Pat Ricchiuti of Fresno who grows, packs and ships peaches, persimmons, grapes, apples, pecans, apricots, almonds, oranges and almonds was one of the few who had been to Japan before.

"Giving fruit as gifts is nothing new in Japan. They are big on quality and packaging and they have always paid a great deal of money for perfection. But some of the sky-high prices I see today are a lot higher than when I was here 10 years ago."

Any food product that promises to promote healthy skin, shiny hair and a more desirable physique is touted. Health and body shape are considered to be the ultimate goal for the primarily female shopper and food safety is a must—at almost any cost. Farm Bureau members gasped at some of the prices we observed in the high-rent Ginza district.

A carefully wrapped grapefruit cost $8.40—and some melons—yes, some individual melons—went for $200. Meat was not only beautifully packaged, but special lighting was used to showcase each cut—to evoke an almost gallery-like image. All the food was precisely placed with attention to detail, which impressed member Dennis Atkinson, a member of CFBF Board of Directors. He also came back with some ideas for California farmers and ranchers to consider.

"Because they demand perfection, the Japanese won't buy a box of crackers and plunge their hands in to find many of them broken. They buy them individually wrapped, topped with a dollop of cheese and an almond. We're trying to sell a five-pound plastic bag of apples for $2.50 to people who are willing to pay $25 for an American apple that is individually boxed. What are we thinking? There's a gold mine here!"

Next: Where do we go from here? Experts weigh in.

Read the three-part series.

(Ann Schmidt is manager of the CFBF Communications/News Division. She may be contacted at aschmidt@cfbf.com.)