Entrepreneurs: Kiwi and Japanese ingenuity

Teacher note

Entrepreneurs have sought to bring new ideas to society. Entrepreneurship is found in big and small companies, by people in established and new businesses, and is supportable from research and other circles. Entrepreneurs need to know their markets – and to manage the link between production and market.

Some markets have barriers in them – as we found in a visit to the Sakai Takashimaya department store. We don’t deal with import. Customers want domestic produce said the fruit and vegetable division manager.

We looked at 2006 Japan autumn prices.

Half a pumpkin, $1.60 NZ. Kumura, 298 yen, approx $2.10 NZ. Potatoes, five in pack, 198 yen. Capsicum, one from Korea, 198 yen, approx $2. Onions, five small from Hokkaido, 168 yen, approx $180 NZ The onions are bought wholesale daily from the Kyoto market. The food section manager could only recall onions being bought once from NZ – and that was in another place he worked in.

In the meat section stickers declaring domestic or foreign supply are on products. Says Sakai Kiwi Rebecca Hillis “they feel safer with domestic products.” There were domestic beef and pork; Aussie beef was sold out. There was lower and higher cost produce.

In addition to kiwifruit, this store certainly had imported items. Kiwi fruit. One for 200 yen, nearly $3NZ each. Sold out! But it is normally available ten months of the year, and is purchased for this store from the Kyoto produce market ten Japanese oranges, 2800 yen. Four Chilean oranges, 399 yen. Imported oranges and other fruits are cheaper than Japanese greenhouse grown. One Japanese mandarin is 200 yen. One Chilean orange is about 100 yen. Watermelon 1280 yen, about $20 NZ. Hokkaido rockmelon 1280 yen, again nearly $20NZ.

The PR manager, interpreted for us by Sakai City’s Takeaki Shibuya said the Osaka regional office for Takashimya, covers six Kansai stores, and has eight staff in its food buying department to service the Kansai.

The PR Manager says a NZ section is unlikely in Takashimaya - but a Kiwifruit fair at an event time is a possibility.


Sushi - works for small enterprises

Some small entrepreneurs run sushi shops where none existed before. Kiwis have come back from the Kansai, creating demand and supply of sushi in more and more New Zealand shops and restaurants.

Some big entrepreneurs use the skills of science to develop new foods – such as gold kiwifruit with less fur on their skins. Kiwis in the kiwifruit business have developed gold kiwifruit to meet the sweet taste of Japanese consumers – it is particularly popular with women and children.

Now some entrepreneurs are processing fresh blackcurrant to make health drinks that they say are good for your eyes.

“Blackcurrants NZ” works cooperatively in Japan, and with major Japanese companies, to research and develop different Japanese markets.

And now the blackcurrant business is growing, helped by Kiwi and Japanese entrepreneurs working in economic partnerships.


Growing kiwifruit opportunities

The kiwifruit business illustrates past success by New Zealand entrepreneurs. Hamish Robinson, from the Zespri Tokyo office uses Kansai supermarkets to sell Kiwi kiwifruit. He told Dr Tim Beal, a long term Asia watcher from the VUW School of Marketing and International Business about a Zespri subsidiary, Aragorn, which was developing product for the Japanese market.

Jason Allen, a Kansai based former JET, told Dr Beal that New Zealand is a minor part of the Kansai market but big NZ companies, such as Zespri are present. Supermarkets ten minutes walk from Jason’s house have kiwifruit. Jason Allen would like to see more New Zealand entrepreneurship applied in Kansai, particularly in the food and beverage markets. He argues for New Zealand to use its incredible scenery to help sell other Kiwi goods and services.

“Image and scenery are powerful sales tools.”

“People behind New Zealand Inc have new fresh ideas” he says, in a comment that has the flavour of entrepreneurship.

Blackcurrant functional food opportunities

Dr Michel Rod, in the School of Marketing and International Business at Victoria University of Wellington, says researchers can help entrepreneurs identify strengths and weaknesses, opportunities and threats.

Such research services are available to develop Kansai markets for Kiwi horticultural products such as blackcurrants for what a Ritsumeikan University economist, Professor Matsubara, calls the functional foods revolution.

We asked Blackcurrants NZ manager Ian Turk if blackcurrants are a long or short term prospect in Japan.

Touching on key considerations for entrepreneurs, Ian Turk said the prospect was long term. “The New Zealanders work with Japanese venture partner Meiji Seika, who can undertake market development using investment New Zealand cannot afford.”

Kiwi blackcurrant growers have a strategic focus on Japan.

They want to add value to fresh blackcurrants that grow well in the ideal climate in at least several regions of New Zealand.

For years they have sold blackcurrants to the pharmaceutical company Glaxo Smith Kline, who have marketed blackcurrant juice under the brand Ribena.

Now blackcurrant businesses are cooperating to develop the Japanese market.

Wellington based Ian Turk says blackcurrant exports to Japan, over the five years since the new millennium began, have taken off as a multi million dollar market for New Zealand.

Blackcurrant pulp and skin is made into blackcurrant powder.

Blackcurrant New Zealand Ltd, with a Tokyo office supported by New Zealand Trade and Enterprise, works with partners to supply Japanese consumers.

Meiji – a brand long associated with the sale of New Zealand dairy produce to Japanese – take the blackcurrant powder and make it into products to give health benefit. They also take concentrates and frozen blackcurrant to turn into powder and other products.

Meiji offers the further processed powder as good for health. Meiji distributes some of the blackcurrant anti-oxidant in capsules, powder sachets and in ready to drink containers.

One of its retail channels is vending machines, another is convenience stores.

Blackcurrant with chocolate is sold in gyms – people like it to get energy and other health benefits.

The product range includes blackcurrant juice such as “Meiji eye”, sold in convenience stores for people who like to drink a container a day if their computer use gives them eye strain. The industry has scientific claims to back that up. Healthy blackcurrant products are formulated for Japanese markets. Partners in the blackcurrant industry have done and collected research which shows that blackcurrant products as well as being good for eye health, also help the body’s circulation, mainly because of their anti-oxidants.

The industry wants to build up evidence to back claims for blackcurrant. So it is continuing clinical trials for blackcurrant. It uses health research in New Zealand. Meiji Seika is building research in Japan. Blackcurrants NZ is developing connections with Japanese health research.

Blackcurrant and other horticulture exporters take a long term strategic as well as a short term tactical approach to developing Japanese markets.

Functional foods revolution

New Zealand’s Horticulture Export Authority licences businesses to export a range of fresh fruits and vegetables.

Individual businesses may develop their own brand of processed foods – such as blackcurrant anti-oxidants, a “functional food”.

Ritsumeikan University’s Prof Matsubara says younger people prefer functional foods: “That’s their attitude to breakfast. There is a growing market for functional foods in Japan” the Kyoto based economist says.

And, as we hear from Japanese and New Zealand specialists, the functional food revolution could open up a bright long- term prospect for more valued added New Zealand horticultural products.

More market and other research could open up more consumer markets for more functional foods that could be based not only on blackcurrants, but also on kiwifruit and other New Zealand horticultural products.

There is potential for people to get work in the industry, which gets its blackcurrants from 60 Kiwi growers, based largely in Nelson and Canterbury. Just Berry will be looking for people with formulation skills. Potential participants should get good grounding in science, and be able to understand how the products work in the body says Ian Turk.

“If Japan takes off there will be plenty of opportunity.”
The cooperative structure helps the development of blackcurrant concentrate and frozen he says. The blackcurrant New Zealand partnership with Japanese marketer is with the NZ Berry Fruit Group. The industry organisation is working in Japan where “our role is to assure customers we have a well organized industry, and that we can work with our clients in marketing product” says Ian Turk.

How important is the Japan market?
The industry made a strategic decision to concentrate on Japan. It can take the quantities we need says Ian Turk. And as the Ritsumeilan University economist Prof Matsubara, from his vantage point in the middle of the market place, says there is a functional foods revolution, there may be opportunities for entrepreneurs.

From Anthony Haas, Asia Pacific Economic News service.

6 March 2007

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