California Wine Export Program

Voluntary Report – Internal distribution

Date: 08/30/2007
GAIN Report Number: JA7701

Japan
ATO ACTIVITIES
Success Stories – California Grown Food Fair
2007

Approved by:
Michael Conlon
U.S. Embassy Tokyo
Prepared by:
Masahiro Matsumoto, Franklin Johnson, and Vanessa Shepherd, Competition and Education Team

Report Highlights: The Competition and Education team is writing a series of reports on how U.S. foods have become established in Japan by small U.S. businesses, cooperators, and Japanese importers. This report outlines the role of the Agricultural Trade Office (ATO) in Japan in helping to develop and organize the extremely successful week long California Fair with Japan’s largest food retailer Aeon and its subsidiary MYCAL. The event, which took place from May 23-29 throughout Japan, resulted in sales of $1.58 million of California food products.

Note: The report will also be sent to interested U.S. trade groups, U.S. legislators, and State Departments of Agriculture.

Includes PSD Changes: No
Includes Trade Matrix: No
Unscheduled Report
Osaka [JA3]
[JA]

Executive Summary

The ATO developed and coordinated with the largest supermarket chain in Japan Aeon, and its subsidiary MYCAL, the successful California Fair. Supported by the State of California as well as seven California based agricultural trade associations, California agricultural products were promoted at 361 stores throughout Japan from May 23-29, 2007. California products such as cherries, oranges, grapefruits, romaine lettuce, celery, broccoli, dried fruits (prunes, raisins, figs), nuts (almonds, pistachios, walnuts), water, prune juice, and snacks were sold during the Fair. Six distributors for U.S. companies supplied products for the event.

A highlight of the promotion was the eye-catching images of California Governor Arnold Schwarzenegger. To give some perspective of the scope of the promotion, a flyer with the image of Governor Schwarzenegger was sent to 17.8 million Japanese households, creating tremendous buzz about the event. The 7-day California Fair resulted in sales of California food products of $1,580,400.

Marketing campaigns developed by ATO Japan and Japanese retailers have proven very effective at increasing sales of American food products. The ATO will continue to coordinate events like the California Fair that bring together a number of U.S. trade groups to promote U.S. products to Japanese consumers. In fact, several U.S. trade groups that participated in the event have continued negotiations with Aeon and MYCAL on future promotions of American food products.

U.S. Exporters and Trade Groups Involved in the California Fair Promotion
A wide assortment of U.S. trade groups and U.S. companies participated in the successful event. Below is a table highlighting some of the key products, California trade groups, U.S. exporters and Japanese companies involved in the California Fair.

Background

ATO Japan has been supporting MYCAL’s annual California Fair since 2005. The State of California has been very active in helping with these supermarket promotions. Prior to this year’s California Fair, the ATO conducted research on the potential of U.S. vegetables in the Japanese market. The report recommended further promotion of U.S. vegetables such as broccoli, celery and lettuce to increase sales. It is with this backdrop that ATO Japan decided to try to expand the California Fair in 2007.

ATO’s Role: Keys to Success

• The ATO developed a relationship with Aeon, Japan’s largest retailer and top supermarket in Japan with annual sales of $16.5 billion (2006), and persuaded them to host a California Fair along with MYCAL.
• The ATO partnered with the California Department of Food and Agriculture, the Buy California Marketing Agreement, as well as a number of other U.S. trade associations in developing and organizing the event.
• The ATO worked with the California Department of Food and Agriculture and the Governor’s Office in securing the use of the Governor’s promotional photos for newspaper inserts and point of purchase (POP) materials that were key to inspiring the Japanese supermarket chain executives to participate in the California Grown marketing campaign.
• The ATO organized business meetings for California product cooperators and importers with Aeon and MYCAL purchasers, which facilitated relationship building. Dole, for example, already had a working-relationship with Aeon before the ATO’s involvement. However, Dole’s Overseas Development Team Manager said that the relationship between Dole and Aeon has been strengthened by the opportunity to collaborate through the California Fair promotion. Dole and Aeon executives are now able to communicate more closely with one another in expanding their business partnership.
• The California Fair generated greater than expected sales. For instance, sales of Californian vegetables supplied by Dole during the California Fair were significantly higher than sales during the same period of the previous year. This year’s expansion to include Aeon in the California Grown campaign meant that 361 supermarkets throughout the country participated in this year’s California Fair, reaching consumers nationwide.
• During the California Fair, consumers had an opportunity to learn about food safety standards in the United States, a positive message that reassured health conscious Japanese consumers.
• Participation of California trade associations was also a key to success. The California Department of Food and Agriculture, the Buy California Marketing Agreement, Western Growers Association, and the California Cherry Advisory Board all sent demonstrators to a number of stores during the promotion, which encouraged customers to try and experience California products.