Tuesday, April 27, 2010


Why is that Japanese food processing industry has not been able to make such an impact on the world scene like its counterparts in the electronic and automobile sectors? An obvious answer could be the total dissimilarity between what they consume and that consumed by rest of the world. But it cannot be the only reason. Chinese, both the mainland as well as the Taiwanese, have been able to achieve much greater success in the food sector than the Japanese. It has dawned on the food industry in Japan that its survival is not guaranteed by dependence on the domestic market only, forcing it to look outwards for growth and development.

"While Japanese products in the technology and auto sectors are household names worldwide, the same is not true in the food industry. But that may be about to change. As birth rates and the consumer market shrink at home, food companies in Japan are increasing the pace of their overseas expansions and trying to improve promotion of their brands. Analysts say that increasing sales abroad is crucial for manufacturers. To do so, the companies are combining, undertaking joint ventures, cutting production costs and creating strategies for new markets. "The domestic market is shrinking, deflation is cutting into sales and the sense of crisis is looming stronger and stronger," said Arihiro Muroya, a senior economist at Norinchukin Research Institute in Tokyo, an organization affiliated with the leading Japanese agricultural lender, Norinchukin Bank. The sector's strategy has been twofold. First, Japanese companies have been infiltrating the health food and condiment categories overseas with soy-based products like tofu in countries where few domestic companies can compete. Second, Japanese producers capitalize on cute Asian-themed characters like koalas and pandas and apply technology to make amusingly shaped treats to attract snack-happy consumers".

Japanese can play a strong role by getting into the machinery sector for which they have the necessary experience and expertise. Success however will depend on the cost as processing machinery made in Japan can have a ready acceptance. How far it can sell these machinery at costs, cheaper than those made by its counterparts from the US, Europe, Canada and Australia will decide about success in this direction.


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