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June 13, 2006

Japan’s largest retailer backs local produce

As part of the Slow Food movement, Japanese consumers are reacting against the inexorable growth of fastfood and ready meals, and seeking out local and traditional produce. And most surprisingly, the country’s largest retailer is in the forefront of this trend. Michael Fitzpatrick reports.

As part of the Slow Food movement, Japanese consumers are reacting against the inexorable growth of fastfood and ready meals, and seeking out local and traditional produce. And most surprisingly, the country’s largest retailer is in the forefront of this trend. Michael Fitzpatrick reports.

As a nation that verges on the side of obsession over what it puts in its collective mouth, it should come as small surprise that the “Slow Food” movement – a trend in many markets which has seen consumers taking more time and pleasure over the preparation and consumption of food – has created a buzz in Japan.

Despite being known for its famously natural and healthy cuisine, Japan has fallen victim to modern food trends and almost imperceptibly – as elsewhere – some of the nation’s unique foods have been vanishing one by one, while grandmother’s dishes are becoming just a memory.

Now a major retailer is capitalising upon – or quite possibly leading – a consumer backlash against this trend by promoting locally produced foods, and underpinning this strategy with a buying policy that flies in the face of modern retail business practice.

As the Slow Food movement, which began life in Italy but is now gaining ground in many other countries, gathers pace in Japan, the country’s largest food retailer Aeon is promoting old-fashioned regional foods, after it was told in a consumer questionnaire that overwhelmingly that was what their customers wanted.

In response to those demands, Aeon’s Artisan Food Project was born as “an attempt to create new business”, and meet the demand for locally produced ‘safe’ food. The revival of regional food in its outlets has become big business for Aeon, making the retailer the first mass market FMCG retailer to move enough of these ‘regained’ products to attract interest from all the industry.

Aeon opened its first Artisan food corner in its JUSCO Minami-Matsumoto Store in Nagano in May 2002. The response was extremely positive and so the company went further, inviting ‘partner producers’ to supply them. Since June 2002, Aeon has received over 1,000 submissions from traditional-minded producers across Japan who meet their guidelines. 

Food submissions arrived both direct from the producers and via recommendations by others. A panel of judges, consisting of representatives of customers and merchandising experts, selects products to become Food Artisan items.

Of the company’s 350 food stores, 300 now have Artisan corners selling 325 different items, including miso, soy sauce, fermented soybeans, and yam paste. Although Aeon declined to give sales details, it says sales have doubled since the project’s launch in 2002.

It is perhaps not surprising that Aeon has found this initiative to be so popular. A series of food safety catastrophes has made the Japanese think twice about buying mass-produced produce. BSE, false labelling and even poisoned milk scares have helped shift the nation’s allegiance to locally made or traceable foods or even food they make from scratch at home.

But what makes Aeon’s project so innovative is that production volumes and sales volumes play no part in the selection process. The company has turned its back on the usual chain-store merchandising strategy of selling the greatest number of products to the greatest number of consumers in the most efficient manner possible. Rather, Aeon’s Artisan Food Project disregards volume quotas and made it a rule to conduct business with producers on an equal footing, no matter how different the scale of their operations in accordance with the Aeon philosophy:  “Business Transactions as Equal Partners”.

Even producers who were hesitant to participate in the project because of low production yields or delivery systems that they felt did not meet the standards of large chain stores were encouraged to sign up.

Meanwhile, marketing the products has continued not just through the store’s special corners, but certain produce is sold with other general food products, through gift catalogues and through the company’s web pages dedicated to Artisan foods and ‘slow food”.

Toshichika Hayashi of Marusho Brewers in Nagano, which makes high-quality miso paste, soy sauce and other products and signed up two years ago to produce for Aeon, says the sea change is very welcome. “It’s very difficult for small-scale regional producers like me to expand our markets,” Hayashi says. “It’s very heartening that Aeon will do business with people like me, treating us as equals.”

Aeon has also developed a system which gives local products effectively nationwide distribution. This concept supports producers by providing a large number of outlets nationwide for their products, no mean feat in Japan which has a large, highly fragmented and regionalised distribution system.

“These products are not only aimed at people in the same region but we are now also promoting them to other regions of Japan,” Aeon spokeswoman Mari Sasaki told just-food. “To do so Aeon is hoping to broaden its network to more food producers and stimulate regional economies through the project. We have confidence this is not just a fad.”


 

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