TOKYO (Reuters) - Back in 1960, Japan's
Kewpie Corp began selling canned baby food, sensing a chance to catch a
wave of young families raising kids in an economy roaring back to growth
after the devastation of World War Two.
Almost 55 years later, the Tokyo-based company sees a new
opportunity opening up in rapidly ageing Japan as parents who
brought kids up on Kewpie approach their sunset years - what it
calls "nursing care food" for the elderly.
Kewpie says it's on the brink of turning a profit on a range of
stewed or pureed ready-to-eat meals called "Gentle Menu", currently
sold in specialist sections of drugstores and a small number of
supermarkets. Served in plastic pouches, they're aimed at the
growing numbers of elderly Japanese who have difficulty chewing and
swallowing, but crave the taste of favorites like beef sukiyaki.
Known for its signature baby mascot and mayonnaise, Kewpie estimates
it now accounts for roughly 70 percent of sales in a niche food
market in Japan worth nearly $30 million. That number is dwarfed by
Kewpie's annual revenue of close to $5 billion, but growth is
expected to be swift: the market nearly doubled in the last four
years, according to market research firm Fuji Keizai, and official
government estimates say it's potentially worth tens of billions of
dollars.
With limited distribution and money being spent on advertising,
"Gentle Menu" is unprofitable for now. But Tsutomu Morota, who heads
Kewpie's healthcare food unit, says it will probably become
profitable next year.
"What we need to do is to make it easier for consumers to access our
goods by securing stores that sell our products. We need to work on
direct marketing, which includes home deliveries," Morota told
Reuters. "We want to strengthen our brand by introducing it into
various places, like nursing homes and restaurants."
With one in four in the country above the age of 65, Kewpie's gambit
comes as Japanese consumer goods face growing pressure to find new
products to stimulate domestic demand, or boost exports - or both.
In 2012, Unicharm Corp, Japan's biggest diaper maker said its sales
of diapers for adults topped those for babies for the first time.
Kewpie and other makers of food for the elderly say they're
concentrating on boosting the domestic market for now, and that
variations in international food preferences make direct exports a
limited prospect. But the expertise they're developing is attracting
interest from overseas: Thai and South Korean researchers,
government officials and food makers have already visited Japan to
find out more about the business of food for the elderly.
'GENTLE' PERSISTENCE
The company that built its fortune on selling jars of mayonnaise in
1920s Japan has learned from experience over the decades since it
started selling baby food that it can take time to turn innovation
into a product people will buy.
Kewpie first tried selling food for the elderly to hospitals in the
late 1980s, packaging the contents in the same bottles they used to
sell baby food. The product flopped.
A decade later, Kewpie came back, this time marketing to consumers
for use at home. It has also lowered prices, increased the variety
of food on offer and set out to build a more appetizing brand,
naming the product line "Gentle Menu" and using the slogan "The joy
of eating" in its advertising.
Each serving now costs 180 yen ($1.76), a sharp drop from 300 yen in
1999. It also offers more than 60 different products compared with
just eight at the outset, although the company admits some have been
slow to catch on, like its jellied scrambled eggs.
Japan's Ministry of Agriculture is bullish about prospects for a
business it believes could help support the country's beleaguered
farm sector. The ministry projects that if everyone in Japan above
the age of 65 were to spend on average $13 a day on food - a
projection food industry executives take with a hefty dose of salt -
the market would be worth $24 billion.
Alongside questions about older people's food budgets, Kewpie is
still grappling with problematic distribution. Japanese supermarkets
experimented with stocking food for the elderly in their regular
food sections more than a decade ago, but pulled the offerings when
they failed to sell.
Supermarket chain Ito Yokado, owned by convenience store giant Seven
& I Holdings Co Ltd, has seen its sales of food for the elderly rise
consistently over the past decade. It attributes that success to a
decision to devote a special corner of its stores - and dedicated
staff - to selling nursing care products including special foods.
"There are still a lot of people who don't know what food for the
elderly is," said Shogo Aoto, head of nursing goods at Seven & I.
"We need our staff to be able to explain what it is."
Meanwhile, Japan's bureaucrats are also working to give "nursing
care food" a makeover. The Ministry of Agriculture has been leading
an effort to come up with a more appealing name for the category:
candidates includes "active life support food", "lively, energetic
food", "easy food" and "happy food".
(Editing by Kevin Krolicki, Miyoung Kim and Kenneth Maxwell)
