Japan-US Business Report LogoJapan-U.S. Business Report

No. 340, January 1998

Issue Index

 American Companies in Japan


FOOD AND AGRICULTURAL PRODUCTS

In April, DOLE FOOD CO.'s subsidiary will form a company with trader ITOCHU CORP. and a Tokyo food wholesaler to supply locally grown produce to supermarkets across Japan. The joint venture, in which the Westlake Village, California food processor will have a 20 percent stake, plans to set up 20 or so processing and distribution centers around the country by the end of the year 2002. These facilities will be linked to local fruit and vegetable markets as well as growing areas via an information system developed by wholesaler KYOWA YAKUHIN CO., LTD. Each of the centers are projected to cost $15.4 million. The produce will be wrapped and priced at the centers so that on delivery to grocery stores it can be placed immediately on shelves. This move complements Dole's strategy, underway since the spring of 1996, to build refrigeration, storage and packaging facilities for imported fruits and vegetables at 10 major ports. The produce is delivered directly to retailers.

J.R. WOOD, INC. of Atwater, California has awarded VANITY INC. exclusive distribution rights to its processed foods made from organically grown ingredients. The Tokyo-based company will supply the preservative-free products to local food makers on an OEM basis as well as sell them in its organic food specialty store in Tokyo. To ensure freshness, all products will be sold within a month of their production.

Pork processor SMITHFIELD FOODS, INC. is projecting a 50 percent jump in Japan sales during the current business year to $115.4 million. The Smithfield, Virginia- headquartered company will double production of pork from black-haired Kurogebuta pigs. It also will expand output of value-added products, including Natural Pork from pigs fed no growth hormones and Balanced Pork/40% Fat Free, in response to the demand from restaurants and food processors for a broader range of products. Smithfield's Japan-bound pork is cut to the local market's specifications at a North Carolina plant. SUMITOMO CORP. is the company's exclusive importer and distributor.

With concern rising in Japan about the safety of genetically engineered corn varieties, ITOCHU CORP. expects this year to triple imports of unmodified corn from the United States for formula feed. The trader will buy corn grown from seeds supplied by E.I. DUPONT DE NEMOURS & CO., INC., which owns part of big seed supplier PIONEER HI-BRED INTERNATIONAL, INC.

In contrast, AGREVO USA CO. of Wilmington, Delaware sees a big market in Japan for corn grown in the United States from genetically altered Liberty Link seed. The Ministry of Agriculture, Forestry and Fisheries recently approved the import of Liberty Link corn, which includes a herbicide-resistance gene, for both livestock feed and human consumption. AgrEvo is a worldwide joint venture of two German companies, HOECHST AG and SCHERING AG.

With the help of DAIEI, INC., the U.S.A. Rice Federation is staging a second promotional campaign for American-grown rice. Through the end of May, shoppers at 200 Daiei grocery stores in central and western Japan can buy an 11-pound bag of California long-grain rice for about $12.90 and a sticky rice for around $1.40 per pound. Both of these prices are far less than what is charged for Japanese-grown rice. The trade association opened an office in Tokyo in early 1997 (see Japan-U.S. Business Report No. 329, February 1997, p. 10).

As one means of reaching their goal of having 1.3 million vending machines around Japan by the year 2000, COCA-COLA CO.'s bottlers are installing machines dispensing Georgia-brand canned coffee and canned tea next to their signature red Coke machines. By yearend 1997, about 5,000 blue Georgia machines were in place.

The increasingly stiff competition among gas stations is proving to be a boon for MCDONALD'S CO. (JAPAN) LTD., as operators try to attract customers by adding a drive-through McDonald's. MOBIL CORP.'s subsidiary is the latest to team up with the fast-food company. The first Mobil station with a McDonald's is open in Kawanishi, Hyogo prefecture. Ten could be in operation by the end of 1998. Mobil has 3,500 affiliated stations across the country.

An exchange rate of ¥130=$1.00 was used in this report.
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