TT-517 -- Down-market nutrition, ebiz in Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, May 17, 2009 Issue No. 517

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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+++ WHAT'S NEW

Last week McDonald's Japan announced that for the first
time in eight years it was once again the top selling fast
food "restaurant" chain in Japan. The company had sales of
JPY518.3bn, becoming the first in Japan to exceed JPY500bn.
Following McDonald's were Skylark at JPY267.3bn in sales;
then Zensho, operator of the Sukiya rice and beef bowl
chain, and Yoshinoya, another beef bowl chain. The notable
thing about all these companies is that they have been
running high-profile discount meals, that are catching the
attention of the public during this latest recession.
Laid-off factory workers, downsized salarymen, students,
and singles are all finding that a JPY250 bread bun or
bowl of rice with a slab of cheap meat is more palatable
than cooking for themselves.

Confirming this trend, analysts are saying that the return
of Micky-D's to the top sales position has been thanks to
its spectacular JPY100 burger offer and other highly
discounted menu items. Although this cost cutting didn't
directly create more profits, once McDonald's got customers
in through its doors, it was able to tempt them with more
expensive menu items that helped push up the bottom line.
The flesh is weak when waylaid by mouth-watering Ebi Fillet
Burgers or Cheese Quarter Pounders...

Actually, the fact is that the only time we ever go to McDonald's
is when the kids need a fix, so whether McDonald's makes a
profit or not isn't normally particularly interesting to
us. However, it is clear that there is a major trend going
on in food consumption in Japan. People are going down-
market in a big way and are looking to live as cheaply as
possible. This same trend would certainly explain the
recent popularity of damaged fruit and vegetables at 99
yen discount stores in Tokyo recently. People are
realizing that a few imperfections and/or low-grade
ingredients can create big savings.

[Continued below...]

----------------- Amazing Wine Evening! -------------------

Tableaux Restaurant and iwine.jp, Japan's online wine
superstore, welcome Master Sommelier Emmanuel Kemiji,
Winemaker and Proprietor of Miura Vineyards, for a special
evening of beautiful food and wine. Mr. Kemiji will be
presenting 4 of his special wines, Pinot Noirs and Syrahs
from the Miura property in California's Santa Lucia
Highlands. Don't miss this exclusive event!

Wine commentary will be provided in English and Japanese.

Date and Time: Tuesday, June 2, 2009, 7pm - 10pm
Venue: Tableaux Restaurant
URL: http://www.tableaux.jp/en/daikanyama/home/welcome
Reservations: Limited to 30 people, 12,000 JPY per person.
Reservations online only.
-----------------------------------------------------------

[...Article continues]

Luckily, you can live pretty well on a budget in Japan if
you want to. Not only damaged fresh foods, but many
traditional minimally processed healthy staples are
available at surprisingly good prices. Tofu, Soba noodles,
natto, Japanese traditional vegetables, bento,
conbini-store onigiri, soy milk, and ramen are all well-
priced and nutritious. Shame that rice isn't so cheap, but
there again, if you go down-market, you can get serviceable
rice at just 25%-30% of the high-end stuff.

While the tough economic climate is creating massive
profits for corporations producing low-end food, 5.4bn
packets of instant ramen were consumed in Japan in 2007,
some of the more nutritious producers are also doing well.
One of these is bean sprouts. According to the Nikkei,
households of two or more people bought 5,889gm of bean
sprouts in 2008, 6% more than in 2007. Last time sales were
at this level was in 1998, when the Asian financial crisis
hit the country and the LTCB bank was put out of business.
Supermarkets are reporting that sales in this first quarter
in 2009 are up by 10% to 20% (Aeon).

What seems to be going on here is that housewives, the
nutritional arbiters for families, realize that they need
to bring down their household spending yet maintain the
vitamin/mineral intake of their kids/hubby. Thus, they
are turning to bean sprouts, which can sell for as little
as JPY30-JPY40 a pack, compared to cucumbers and other
salad greens that cost JPY100 each or more. Bean sprouts
are well known as nutritious fillers for stir fries and
ramen, and now are also being consumed instead of
traditional greens as well. Not only the ubiquitous
"Moyashi" (mung bean) sprouts but now also alfalfa,
"Kaiware" (daikon), and broccoli sprouts are becoming
popular. All are typically priced at less than JPY100 a
pack, and since sprouts are loaded with nutrients that
would be hard to replicate with more fully grown vege --
something that female consumers learn from popular
magazines, they are snapping them up.

Sprouts and cost-effective hydroponic vegetables come with
the added plus that they can be produced in factories
versus growing in dirt and taking up valuable land space -- and
perhaps most importantly, they don't have to come from
uncertain sources in China... Perhaps because of this, and
also because recent computer and LED technology now means
that the right growing environments can be supplied by
computer programs at low cost, the government announced
earlier this month that it will cover 50% of the cost of
constructing more vegetable factories around the nation.

The subsidies will help cover not just the cost of the
buildings themselves, but also the computerized nutrient,
humidity, temperature, and lighting systems needed to get
maximum growth. The Agriculture Ministry says it wants to
triple the number of such factories to 150 sites over the
next 3 years.

Now, if you are taking cheap sources of nutrition to a
natural end-game, then it would make sense that algae are
also included in the national nutrition picture. Although they're
not on the main menu for households yet, as supplements
both Spirulina and Chlorella have become hugely popular in
Japan. Apparently last year, Japanese consumed about 50
tons of spirulina and an unknown tonnage of Chlorella --
but enough to reach JPY40bn in sales. Indeed, Chlorella
was the third most popular dietary supplement after Vitamin
C (JPY48bn) and Calcium (JPY42bn).

We think that if the government is paying out to build
vegetable factories, presumably to reduce food dependence
on foreign growers as much as to improve nutrition and thus
reduce health costs, then it should come up with a way to
significantly reduce the costs of spirulina and chlorella,
so that these foods become available to the general
population on a greater scale. Both foods need much the
same general facilities as sprouts -- meaning that after
factoring in computerized environments, they provide much
the same economic benefits. In particular, the inputs needed
to run them are comparatively low -- basically electricity,
low-cost nutrients, and a good supply of fresh or saline
water.

And unlike sprouts and vegetables, algae variants can
be patented and after freeze drying and packaging, can be
exported. This means that Japan could apply its process
technology skills to create a new industry that the world
needs -- a nutritious replacement for instant ramen.

********************

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+++ NEWS

- Yahoo! opens up its Wallet
- Deflation is back
- Hatoyama may have DPJ top job, but 25% wanted Okada
- Animals tests for cosmetics causes friction
- Recession may last 2-5 years

-> Yahoo! opens up its Wallet

Yahoo Japan's transaction settlement system, Yahoo! Wallet
is now being offered to other web sites to handle customer
payments. Yahoo has decided that going into the financial
transactions business outweighs whatever cannibalization it
might have suffered otherwise. The system is effective
because customers pre-register their credit card, bank
account and other personal billing information, and
nowadays Yahoo has more than 19m people registered.
Apparently Yahoo Japan has already licenced its Wallet
software to more than 160 companies, and wants to hit 10,000
firms in 2010. (Source: TT commentary from nikkei.co.jp,
May 9, 2009)

http://www.nni.nikkei.co.jp/e/ac/tnks/Nni20090508D08JFA26.htm

-> Deflation is back

Wholesale prices in April in Japan dropped 3.8% versus the
same month last year, the steepest prices drop in 22
years, suggesting that Japan may now be entering another
deflationary spiral reminiscent of the 1990s. Right now the
fall can be attributed to falling energy and materials
costs, which is good for producers, but a warning sign can
be seen in the fact that for the first time in 18 months,
consumer prices also deflated in March. In contrast though,
maybe we're hitting the bottom of the slump, because core
machinery orders only fell 1.3% in March compared with
February, much less than expected. (Source: TT commentary
from google.com, May 15, 2009)

http://tinyurl.com/px376v

-> Hatoyama may have DPJ top job, but 25% wanted Okada

A Mainichi newspaper survey has found that the DPJ may have
shot itself in the foot again, by not breaking with its
tired old leadership. The survey found that 25% of voters
wanted Katsuya Okada as the next leader (currently the DPJ
is the main opposition party to the ruling LDP), not Yukio
Hatoyama, who was supported by only 13%. ***Ed: The popular
thinking is that Hatoyama will be a puppet representative
of Ichiro Ozawa, who was forced out of his leadership
position last week over a funding scandal.** (Source: TT
commentary from bloomberg.com, May 13, 2009)

http://www.bloomberg.com/apps/news?pid=20601101&sid=aEFdFSEnVC1I&refer=j...

-> Animals tests for cosmetics causes friction

A European Union ban on animal testing for cosmetics that
took place on March 11, and which will result in a total
ban on all forms of animal testing from March 2013, is
causing problems for both European and Japanese cosmetics
manufacturers. Japan still requires animal testing for
consumer safety and so companies that meet the Japanese
requirements will be breaking the laws in the EU if the
products or constituent components are exported to the EU.
Conversely, EU-produced products will no longer meet
testing requirements in Japan. In Europe, alternatives to
animal testing include applying new products to
artificially cultured human skin, a technique that is used
by L'Oreal. However, such methods are not yet approved here
in Japan. ***Ed: Where there is a will there is a way, and
the Japanese have 4 years to figure one out.** (Source: TT
commentary from asahi.com, May 16, 2009)

http://www.asahi.com/english/Herald-asahi/TKY200905160056.html

-> Recession may last 2-5 years

"Mr Yen" Eisuke Sakakibara has spoken out at an Asian
Development Bank (ADB) conference saying that he thinks the
current recession will last two to five years, and that the
current rounds of stimulus packages in G20 countries will not
make a significant difference. Sakakibara said that the
global economy was in an L-shaped recession rather than a
V-shaped one, and is a "balance sheet recession" which
requires companies to reduce liabilities, repay debts, and
generally repair their balance sheets. As a result, he
expects stagnation in the global economy. In line with what
Obama is saying, Sakakibara also said that world leaders
need to focus high-growth sectors like medical services and
cleantech. (Source: TT commentary from guardian.co.jp, May
14, 2009)

http://www.guardian.co.uk/business/feedarticle/8506845

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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***------------------------****-------------------------***

+++ CANDIDATE ROUND UP/VACANCIES

=> BiOS, a Division of the LINC Media group, is actively
marketing the following positions for customers setting up
or expanding in Japan, as well as other employers of
bilinguals.

** HIGHLIGHTED POSITION(S)

BiOS is now recruiting enthusiastic and energetic sales
professionals to join its growing operations. The
successful applicant will be charged first and
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The most important skills a candidate can bring to this
role are polished bilingual communication and an aggressive
self-starter attitude. BiOS is looking for someone who from
Day One will be able to impress the team with their ability
to source and sign up new customers -- so the ability to
identify target markets and companies, and communicate with
them appropriately is essential. In addition to this, we
require at least a basic knowledge of IT.

Remuneration is JPY3.5m - JPY4.5m + generous commission,
based on your experience and language ability.

** POSITIONS VACANT

- Entry Level Java Engineer, JPY3m – JPY3.5m
- Voice Systems Engr, telecoms company, JPY6m – JPY9m
- Network Engineer in a European Bank, JPY6m – JPY7.5m
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+++ UPCOMING EVENTS/ANNOUNCEMENTS

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+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
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=> No corrections or feedback this week.

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+++ ABOUT US

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