From cradle to grave, Japan's Kewpie adapts menu to feed ageing nation

Sun Aug 17, 2014 5:06pm EDT
 
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By Minami Funakoshi

TOKYO (Reuters) - Back in 1960, Japan's Kewpie Corp began selling canned baby food, sensing a chance to catch a wave of young families raising kids in an economy roaring back to growth after the devastation of World War Two.

Almost 55 years later, the Tokyo-based company sees a new opportunity opening up in rapidly ageing Japan as parents who brought kids up on Kewpie approach their sunset years - what it calls "nursing care food" for the elderly.

Kewpie says it's on the brink of turning a profit on a range of stewed or pureed ready-to-eat meals called "Gentle Menu", currently sold in specialist sections of drugstores and a small number of supermarkets. Served in plastic pouches, they're aimed at the growing numbers of elderly Japanese who have difficulty chewing and swallowing, but crave the taste of favorites like beef sukiyaki.

Known for its signature baby mascot and mayonnaise, Kewpie estimates it now accounts for roughly 70 percent of sales in a niche food market in Japan worth nearly $30 million. That number is dwarfed by Kewpie's annual revenue of close to $5 billion, but growth is expected to be swift: the market nearly doubled in the last four years, according to market research firm Fuji Keizai, and official government estimates say it's potentially worth tens of billions of dollars.

With limited distribution and money being spent on advertising, "Gentle Menu" is unprofitable for now. But Tsutomu Morota, who heads Kewpie's healthcare food unit, says it will probably become profitable next year.

"What we need to do is to make it easier for consumers to access our goods by securing stores that sell our products. We need to work on direct marketing, which includes home deliveries," Morota told Reuters. "We want to strengthen our brand by introducing it into various places, like nursing homes and restaurants."

With one in four in the country above the age of 65, Kewpie's gambit comes as Japanese consumer goods face growing pressure to find new products to stimulate domestic demand, or boost exports - or both. In 2012, Unicharm Corp, Japan's biggest diaper maker said its sales of diapers for adults topped those for babies for the first time.

Kewpie and other makers of food for the elderly say they're concentrating on boosting the domestic market for now, and that variations in international food preferences make direct exports a limited prospect. But the expertise they're developing is attracting interest from overseas: Thai and South Korean researchers, government officials and food makers have already visited Japan to find out more about the business of food for the elderly.   Continued...

 
A staff arranges Kewpie Corp's nursing care food packages on a display shelf at an Ito-Yokado shopping centre in Tokyo August 5, 2014. REUTERS/Yuya Shino