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

No. 347, August 1998

Issue Index

American Companies in Japan


A shakeout is underway in Japan's pet food industry in the wake of higher yen prices for imported ingredients and sagging retail prices in the main distribution channel. RALSTON PURINA CO., the manufacturer of a number of popular brands, already has pulled out of the market. AJINOMOTO GENERAL FOODS INC. is not far behind. The maker of Gaines dry food will sell its plant and goodwill to UNI-CHARM CORP.

A key part of HERSHEY FOODS CORP.'s strategy to boost its local business 15 percent this year to $21.3 million is to roughly double sales of white chocolate to $2.8 million. The company is repackaging and repricing its white chocolate, still a fairly new market in Japan, in the hope of achieving its target.

Having terminated its marketing contract with SUNTORY LTD., Japan's biggest wine importer, in May, ROBERT MONDAVI CORP. named MERCIAN CORP. as its exclusive distributor. The Tokyo-based manufacturer of alcoholic beverages and the number-two buyer of foreign wines will begin handling about 30 of the Napa, California winery's products in September. Typical prices will be around $100 for a bottle of Opus One, $25 to $35 for Robert Mondavi brands and $9 for Woodbridge wines. Mercian has projected combined first-year sales of 100,000 cases.

BUDWEISER JAPAN CO., LTD. has introduced a canned sparkling drink priced around $1.30 per 16-ounce can. It expects to sell 200,000 cases of the new product.

A fast-expanding Pacific Northwest franchiser of submarine sandwich shops has moved into the Japanese market. SEAWEST SUB SHOPS, INC., a wholly owned subsidiary of JRECK SUBS GROUP, INC., opened a Sub Shop in Osaka, the first of what is expected to be a number of outlets. The store is run by TREX INC., which worked with Bellevue, Washington-based Seawest on the shop's design as well as on lining up local sources of ingredients and fresh-baked bread.

An exchange rate of ¥141=$1.00 was used in this report.

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