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How a Japanese Strawberry Gets to Laos

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Japan has a lot of work to do if it is to reach the government’s goal of exporting an annual 1 trillion yen ($10 billion) worth of food.

Before Japanese produce and other ingredients can make their way to the rest of Asia, they have to clear structural barriers. Then they can find themselves up against more established products from countries with lower overhead costs. And along the way, there is a lack of infrastructure to keep them fresh.

So Japan Inc. is rolling up its sleeves. In Vietnam, a public-private partnership in late July began operating a large refrigerated storage facility.

With floor space of 7,000 sq. meters, the facility is one of the largest of its kind in Vietnam. It is the result of an initiative by a consortium comprising Kawasaki Kisen, a marine transport company; Japan Logistic Systems, an integrated distributor; and the Cool Japan Fund, a public-private fund meant to support and promote the development of overseas demand for Japanese products and services.

With a population of 93 million and a growth rate exceeding 6%, Vietnam is a promising market. But Japanese exports of meat and fish to the country have slowed the past few years. A key reason is an underdeveloped temperature-controlled supply chain, according to Joji Koda, senior director at the Cool Japan Fund.

“There was this dilemma,” Koda said. “You can’t transport food unless there is viable infrastructure, but you can’t readily invest in infrastructure when there isn’t a large enough amount to transport.”

So Japan’s government shelled out over 700 million yen for the cold storage facility.

The National Federation of Agricultural Cooperative Associations, or Zen-Noh, wants to use the big fridge to help it get fresh ingredients to an upscale Japanese restaurant that opened in 2015 in Ho Chi Minh City. The restaurant was established by Washoku Works, a company set up by Zen-Noh and Food Works, a Tokyo restaurant operator.

Fish, tofu and other ingredients are quick-frozen in Japan, then transported to Vietnam while being kept at minus 10 C the whole way.

Freshness is Zen-Noh’s immediate goal in developing viable cold chains. A long-term goal is to open overseas sushi restaurants that would import Japan-grown rice, a cooperative official said.

If a target market lacks an unbroken cold chain, a certain amount of food goes bad while being shipped. These losses result in higher prices, which are not popular and to be avoided if the goal is to get a product to catch on.

Japanese strawberries learned this lesson in December, when the Kokubu Group, a food trader, began exporting the fruit to Laos.

The company’s Amao and Tochiotome brand strawberries are carried in the country’s upscale grocery stores, but one package costs more than 5000 yen.

Remember the rule about high prices? Not popular.

But with Japanese strawberries in Laos they were also unavoidable. Some 60% of the fruit went bad while awaiting customs clearance at the airport. Due to a lack of refrigeration, the strawberries had to wait it out in temperatures of between 30 C  and 40 C, according to a Kokubu Group representative.

Another factor behind that 5000 yen price is the high cost of transporting stuff out of Japan. Japanese strawberries have to pay more than 1230 yen per kilogram for a flight that stops over in Bangkok. Their South Korean rivals, meanwhile, take a direct flight to Laos for about 200 yen per kilogram.

Also, surface transportation is not a viable option, the Kokubu Group representative said. For one thing, Laos is a landlocked nation, and freight containers need to travel through either Thailand or Vietnam to get there.

United Nations statistics show Japanese strawberries also face an uphill battle in Singapore. The city-state in 2015 imported 1,500 tons of fresh strawberries from the United States and 1,100 tons from South Korea. Japanese imports amounted to 22 tons.

Of Japan’s strawberry exports, 80% currently go to Hong Kong.

In 2015, Japan exported some 745 billion yen worth of food. Industry observers say it will be a long time before the 1 trillion yen goal is reached.

Source: Nikkei Asian Review