Welcome to Eat Take Away! In this series we hear from brand and marketing leaders across the world on their ambitions and challenges this year and beyond. We explore their day-to-day and what lessons they have for brand teams and marketers in the fast-changing and sometimes overwhelming worlds of brand experience and delivering for customers. Check-out our three take-aways at the end.
In this episode, Jessica Tisch, Country Manager for Japan at The Fresh Fruit Company of New Zealand chats with Eat Creative’s Head of Growth Robert Costelloe.
Please note this
interview has been edited for clarity and brevity.
Robert Costelloe: Thank you for speaking with me Jessica. First up, I’m keen to get an overview of The Fresh Fruit Company of New Zealand, or Freshco.
Jessica Tisch: So Freshco was founded in 1989 with founders that are still very active in the business today. We have a number of brands in our portfolio that deal in three core product categories – squash, or ‘kabocha’ as it’s known in Japan, apples and cherries. 80% of kabocha that is grown in New Zealand is exported to Japan, and the other 20% to Korea. We’ve been exporting kabocha to Japan for 30 years and have very long relationships with our customers. It was this product that allowed us to expand the product offer into apples as we went to our kabocha customers first who took apples on.
One of the main propositions for New Zealand brands in Japan is, because the country is in the Southern Hemisphere, we can supply Japan in the counter season. We are not here to compete with domestically grown product. But that’s always tough. We know that Japanese consumers have a preference for and high trust in their domestic produce. What we are trying to ensure is the Japanese customer can eat fresh produce all year round. We are also focusing a lot on the technology and innovation side that can bring fresher, better quality produce to our customers.
"Because the country is in the Southern Hemisphere, we can supply Japan in the counter season...What we are trying to ensure is the Japanese customer can eat fresh produce all year round."
RC: And from your experiences, how do you think Japanese audiences perceive New Zealand brands?
JT: If we look at the image a Japanese consumer has of New Zealand in general, I think it’s very positive. They think of a clean, green environment, rugby, wide open spaces, friendly people. And research has been done in this area that attests to these perceptions. When it comes to the food and beverage categories, there is certainly a high level of awareness and trust – food products that bring a high level of nutrition and safety. However, even though there are a lot of emerging technologies in New Zealand and new innovations, these are not areas that have much awareness. F&B brands can come to the Japan market with a precedent from companies coming in before them. But in these emerging areas, it could be more challenging.
RC: What are some of the main considerations you focus on when it comes to bringing a brand to Japan?
JT: One of the challenges you’ll hear from exporters to Japan is Japanese distributors and consumers have very, very high expectations of product appearance and packaging. Defects in the product or any kind of minor flaw might be acceptable in your home market, but not in Japan. It’s often said if you can crack Japan as an export market, then you are set up very well for growing your business in other markets because of the discipline you have to learn in the Japan market.
"If you can crack Japan as an export market, then you are set up very well for growing your business in other markets because of the discipline you have to learn..."
The other is localisation and not assuming that a product that’s been successful in your home market will automatically work in this market. How people shop in Japan is very different. In New Zealand, we drive to the supermarket, get a trolley, fill it up, and get everything in the back of the car. We might only go to the supermarket once a week. That doesn’t work in Japan. You can’t expect a customer to lug home a huge container of laundry detergent because they have to get on the train, or they’re cycling to the supermarket.
The packaging format will also be very different. Storage space in Japanese homes or apartments is nothing compared to what you’d see in New Zealand so products typically come in much smaller sizes. All of these elements require time to understand and evaluate what will work in Japan. Things also take time in Japan. Developing the relationships, agreeing product and pricing, promotional activities – all of these can take longer than companies are accustomed to.
RC: And have recent global factors impacted how New Zealand brands are operating in Japan?
JT: One of the main factors that comes to mind is inflation. Many retail buyers in Japan potentially have never seen inflation before. For 30 years, pricing has remained the same and so to introduce a price increase is so tough. In New Zealand, you’ve seen increases in labour and production costs over the last couple of years which means it’s not profitable to export at the same price point. You have to raise your prices to cover your costs. But retail buyers here don’t seem to be very accepting of that. So rather than increasing the retail price, producers will look for other options, such as reducing pack size.
The other factor as well is salaries are not increasing here, which further limits how much you can increase your prices, if at all. If customers don’t see their item as a necessity, they just won’t buy it anymore. We’ve also experienced a challenge known to all exporters in the last few years – shipping. If our product arrives late, it means it might get there at the time when the domestic product is coming to market. We have to make sure our product is on time.
Cyclone Gabrielle, which hit New Zealand in February this year did a lot of damage to our business and our industry – hitting the areas where our apples and kabocha are grown.
RC: Turning to your role with Freshco and in light of these challenges, what is your ambition for the business and your portfolio of brands?
JT: I’m excited for consumers to gain more awareness of New Zealand fresh produce, to the level of success we’ve seen with kiwi fruit in the Japan market. Our apples, for example, offer something quite different to Japan’s domestic product. They are smaller, crunchy, sweet and we encourage them to be consumed as a snack. Traditionally, in Japan, apples are sliced and served among family members after dinner but our product is perfect as a healthy snacking option. We are encouraging Japanese consumers to eat the skin because that’s where most of the nutrition is – a concept that is unfamiliar to many in the country.
We are also focusing as a company to make positive decisions and sustainable decisions that support the growth of our industry. New Zealand is very agile in the horticulture sector and is continually investing in how to do things more effectively. There is a lot of opportunity to bring the technologies and best practices to Japan and innovate here.
"New Zealand is...continually investing in how to do things more effectively. There is a lot of opportunity to bring the technologies and best practices to Japan and innovate here."
For example in your average apple orchard in Japan, you may have an elderly person climbing an apple tree and turning every apple so that sunlight hits all sides of the fruit. With the labour issues that exist in Japan as well as an ageing population, it may become very hard for Japan to supply enough food domestically. So there’s definitely some exciting collaboration opportunities that could be beneficial to Japanese horticulture and agriculture.
RC: And what does success look like for you this year?
JT: I think getting a really good understanding of our customers in the first year, spending time with our retailers talking with end consumers will give me a lot more product knowledge. I think it’s ultimately going to be a tough year for us due to the cyclone, but I would love this year to be where we have amazing quality product available to Japanese consumers and Japanese consumers remember that for next season.
The Eat Take-Away
Localisation is critical: From proposition, to product offer, to experience and communications - every non-domestic brand that is successful in Japan has had to go to great lengths to build their business in a way that is relevant and aligned with Japanese expectations. Be sure to take your time to research and understand your audience and the most effective, authentic ways to reach them.
Country association can be a blessing or a curse: It’s important for brands to consider how target consumers perceive the brand’s country of origin - if that is a factor being utilised in marketing and communications. For certain industries, that country association may actually be detrimental to market penetration and success if unknown to your target audience. Be sure to evaluate your level of country or origin association, based on strong understanding of local audience perceptions.
Everyone needs to be part of the journey: Depending on what service or product you are bringing to the market, there may be multiple stakeholder groups – all of which need to be carefully managed and engaged to ensure everyone is pointing in the same direction for your brand success. Be it suppliers, your import partners, distributors, and retailers, each stakeholder group may have conflicting views on your brand, your business and what success looks like. A lot of time will need to be spent up front to make sure all stakeholder groups are aligned in their vision for your brand.