HMR BOOM: EAST MEETS WEST IN JAPANESE STORES

ROSEANNE HARPER

HASBROUCK HEIGHTS, N.J. -- Home-meal replacement is as big a deal in Japan as it is here.

The comfort food, Japanese-style, may be spicy fish and tofu instead of meat loaf and pot pies, but the demand is there for a "home-cooked" meal, and supermarkets are busy trying to give consumers what they want, according to Marvin Spira, executive director of the Eastern Dairy-Deli-Bakery Association here.

Spira just returned from Japan, where he was invited as a U.S. industry expert to address representatives of the Japanese supermarket industry. While there, he visited a number of supermarkets and made other observations about the climate for HMR there.

Spira emerged with the opinion that the climate there is a lot like the one in the United States. More women have entered the work force in recent years, he said, and in Japan, too, nobody has time to cook.

"They got to that point a little later than we did here, but now it's about the same," Spira said.

Spira said he was particularly struck by the predominance of perishables in Japanese supermarkets, and also by the high level of quality and service in those departments.

About 60% of selling space in most supermarkets in Japan is dedicated to fresh foods and more than half of that space is devoted to fresh, prepared meals and meal components, he said.

Particularly noteworthy was that the supermarkets he visited did not appear to be locked into heated competition with each other on prices. They try to outdo each other in other areas, he added.

"The competition is in quality, freshness, presentation and service," Spira said. Even departments within a store compete to get customers to taste their products, Spira added.

Sampling and demoing of prepared foods is continuous, he said. In some of the larger supermarkets, which are in the basement of department stores downtown, there's at least one employee sampling products in every fresh-foods department, he said.

"It creates a real cacophony as they all try -- enthusiastically but always politely -- to get your attention," Spira said. "There wasn't one store I went into that didn't have several demos going on."

Among the items he tried were shrimp tempura, "highly seasoned cubes of tofu," and several fresh fish dishes. "Sometimes I didn't know what I was eating, but it was good. And it always looked appealing."

Prepared foods in service cases were displayed in relatively small bowls that are replenished frequently, he said. He observed employees obviously taking pride in their work. When food was packaged in-store, it was carefully arranged and presented to customers with a smile, he said.

Most supermarket employees in Japan are full-time. Spira was told, too, that the training of employees is thorough in Japan's supermarkets. Moreover, turnover is not a problem there because the culture dictates that people usually stay with a job, he said.

Fresh-prepared meal components are delivered to stores as often as two and three times a day. A scarcity of real estate makes such just-in-time systems virtually a necessity, he said. He also pointed out that all segments of the food distribution chain work closely together in Japan.

"Partnerships between manufacturers and retailers in the form of sanitation programs as well as advertising, point of sale and merchandising assistance are impressive," Spira said.

Efficient recycling of packaging is illustrative of the kinds of alliances in the market -- they include the consumer as well as the package manufacturer and the retailer, he said.

For example, a major packaging manufacturer that supplies most supermarkets in Japan is dedicated to a recycling program for its polystyrene foam trays, he said. "The company feels a social responsibility to establish methods of recycling those products, and I was awed by the way the package recycling works," Spira said.

He explained that the system not only requires an alliance between manufacturer and retailer, but also involves the consumer and an honor system. For example, there are no deposits collected on a package when a consumer purchases a product, but nonetheless, consumers return packages, washed and dried, to the store. Then, the store returns the packages to the manufacturer for recycling.

When Spira visited the manufacturer's plant in Fukuyama, near Hiroshima, he said, "I was particularly impressed with their innovation and manufacturing techniques. They have unusual laminating processes that can give Styrofoam trays a striking design and make an attractive presentation.

"And they use graphics. For example, there were trays that had a green-leafy design. So it looked like the food in a package was sitting on leaves of lettuce," Spira said.

The prepared foods are predominantly prepacked and chilled, Spira said. In many stores, there is a limited display of hot foods, and in some, limited in-store production, such as cooking vegetables at a wok. Most prepared foods, however, are prepacked in single-serving portions and sold from refrigerated, self-service cases. Both heat-sealed, microwavable packages and dome-lidded packages are used. Branded products are prevalent, and private label is rare. "Food-service packaging is upscale, and seems to be as important as the product itself," he added.

Distributors -- instead of the food manufacturer -- routinely package fresh foods prior to delivery to the supermarket, he said. "The distribution chain in Japan is very complex. The vendor/supplier delivers daily to the stores and, sometimes, with prepared foods, two to three times a day is not inconceivable. Warehousing is extremely expensive due to space restrictions."

Sales generated by the top 1,000 supermarket chains in Japan in 1996 totaled approximately $233 billion. (Chains are defined in this instance as companies with more than six units.) "When you add small independents and convenience stores, Japan has a total of almost $340 billion a year in retail food sales," Spira pointed out.

Small conventional supermarkets, which are 7,000 to 8,000 square feet, almost always consist of multiple stories. "I wasn't in one that didn't take up three or four floors," Spira said. "They're reminiscent of a Food Emporium on the East Side in Manhattan."

In the conventional Japanese supermarkets, the average transactions are small, the equivalent of $20 in U.S. currency, because customers shop several times a week, Spira said. There are some larger supermarkets that occupy 10,000 to 30,000 square feet, and others, sometimes as large as 55,000 square feet, are usually found in the basement of department stores.

Fresh fish constitutes more than half of the perishable foods sold in Japan, Spira said. Fish sausage and octopus and squid are popular. Many of the fresh, prepared-food products are made up of noodles with some type of fish or shellfish, Spira added. Sushi, packed to go, also is popular.

The traffic pattern in stores in Japan is much the same as in a typical U.S. supermarket today, Spira said. Produce is the first element a customer sees upon entering a supermarket, and that is followed by the prepared foods.

"The presentation of the produce is nice. Very uniform. There were rows of scallions standing upright and their tops were all cut evenly like they had had haircuts," Spira said.

The apples looked great, too, he said. However, they were $4 each, testament to the fact that some things are indeed quite different about the food business in Japan.