Food is, in my view, one of the most tangible ways of including more sustainable choices in your personal daily life. And it is maybe not surprising that amidst increasing concerns about food safety, health and environmental impact the market for organic food is growing – not just in the Netherlands and Europe but worldwide.
Last week, the Dutch Ministry of Economic Affairs published data for 2014 on the export of organic food products from the Netherlands, which has risen 11% from the previous year. Most products find their way to other European countries, but outside of Europe one of the top destinations is Japan (the United States, China and South-Korea are also mentioned as important export markets).
This led me to get in touch with Duco Delgorge, president and CEO of the company MIE PROJECT CO., Ltd., an importer of organic packaged food and who I met on my previous trip to Japan. When we met, I was impressed with his drive and vision on sustainable development and the opportunity he spotted in developing this market.
I asked Duco a few questions on his work, his view on developments in the organic food market in Japan and, lastly, some advice for interested Dutch and European companies.
What do you do?
“In February 2005, I established MIE PROJECT Co., Ltd. in Tokyo. The company is focused on importing quality organic, natural, and fairtrade packaged foods. This year is our 10th anniversary. We import nearly 200 products from 23 suppliers from 10 countries and distribute these to over 1,000 food retailers throughout Japan.
We are still a relatively small company, with just 12 employees, but we grow significantly each year and see excellent long-term potential. Although we initially focused on the premium sector of the retail market, e.g. premium supermarkets, gourmet stores, organic food stores, specialty stores, department stores, cafes, etc., we are gradually seeing a growing interest from larger scale supermarkets. Still, the relatively high price ensuing from importing with high import duties, limits the upside potential.”
What are the main developments in the organic food market in Japan in your view?
“The Japanese organic food market still has a retail value of only about €1 billion, and represents only about 0.5% of the total food market. This compares with about 3% in France and 8% in Denmark. [In the Netherlands the market share for organic food is around 2,5%]. The key reasons for the low penetration of organic food in Japan is the lack of local organic agriculture (again about 0.5% of total agriculture), the relatively low level of awareness of organic food among Japanese consumers, and the lack of availability and high cost of imported organic food.
Still, the picture is progressively brightening for the organic food market. People are increasingly looking for healthier food options, and specifically organic food. Most of this demand is being met by imported organic food. Also, although organic food retailing is still very underdeveloped, progressively more retailers are investing in this concept.”
Is Japan an interesting market for Dutch/European organic food brands, and what would you advise interested companies?
“Japan is certainly an interesting market for Dutch/European organic food brands, but suppliers should very carefully consider if they are ready to take up the challenge.
Here is a starter list of things to consider:
- Excellent branding/image
- Products should be excellent tasting, very high quality, and have strong unique selling points
- Quality control / quality assurance must be of the highest level to avoid risk of claims
- Price should be competitive – check impact of freight – need for reefer transport and/or high import duty could result in overly expensive retail price
- Ideally minimum 1 year shelf life with monthly production to ensure no shelf-life issues
- Commitment to succeed in Japan over the long-term, ensuring the necessary resources are put in place
This is just an indication of what is required. Choose your importing partner carefully, ensuring that they have the resources to succeed and that they can work together well with you. Finally, suppliers need to monitor progress and determine over a suitable period of time what the long-term prognosis is: a) maintain; b) invest for growth; or c) withdraw. Ideally, a good working relationship with the importer will ensure the best result is achieved with no surprises. There is no guarantee of success but there are numerous European organic brands that are achieving increasing success in Japan.”
Thank you, Duco, for sharing your view on this growing niche market in Japan and your advice on market entry.
For those interested, the following website provides some further reading on this topic: Japan country info on Organic World.
And, if you want to get to know the Japanese (organic) food market more closely, FOODEX 2015 will be held in Japan from March 3-6.