Japan Buyer’s Interview
The Background to the Rise of Seijo Ishii and its Work with Imports
We have been able to report on Seijo Ishii, the
food-specialist chainstore now operating 88
stores nationwide (as of February 2012), based
on the concept of "High Quality & Good Price".
Our first visit was to the Tokyo Dome LaQua
Store, which has the largest floor area of any
Seijo Ishii sranch (around 615m2), and handles
12~14,000 items. Yasuko Maekawa, manager of
the PR office, showed us around the store and answered our questions. At a later date, we
went to the company headquarters in Yokohama and talked to executive director and
products department manager Yoshihiro Hattori about how Seijo Ishii handles imported
goods, and the background to the rise of the chain.
Interview with PR office manager Yasuko Maekawa
Q: Why do customers who pride themselves on "looking for the real thing"
have such high regard for Seijo Ishii?
First of all, Seijo Ishii's motto is to provide delicious, high-quality foods at affordable prices.
To that end, our buyers fly around Japan and around the world, looking for products with a
good balance of taste, quality, and price. It is natural that expensive foods should taste good
and be of high quality, but I think what our customers, with their discriminating eyes and
palates, really admire are a good balance of taste, quality, and price.
Besides lining up that kind of high-quality product, it is also important to let customers know
about the virtues of the products and how they can be used. The keys to that are POP and
customer service. POP matches multiple types of goods with their best applications and tells
customers about the care we have taken over the raw materials, manufacturing methods, and
other attributes of the products. In customer service, staff can't talk to customers about
products they don't know about, so we provide thorough education within the company about
wine, fresh ham and other processed meat, cheese, coffee, tea, and so on, because those types
of products require expert knowledge and are areas where our customers have high
expectations of us. We concentrate particular effort on wine, which is the number one best
seller among our imports. Our staff receive a total of 32 two-hour training sessions. During
that training period, they will taste-test as around 100 wines (the exact figure is 96). Rather
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Japan Buyer’s Interview
than just selling the wines we have lined up, our sales method is to listen to the needs of
individual customers, and recommend them wines that suit their needs. I think that kind of
customer service is another reason why we are loved by customers who are looking for the real
thing.
Q: What are the target segments for Seijo Ishii?
Normally, companies will focus on targeting detailed conditions of age, gender, income and so
on, but at Seijo Ishii, we do not narrowly target customers in categories like that. The targets
for Seijo Ishii are "people who want to eat delicious food" and "people who are concerned about
food", and we never categorize them according to things like age, gender, or income.
Q: What are the "original products" which Seijo Ishii offer?
At Seijo Ishii, we call the products we develop for ourselves "original products", rather than a
private brand. A PB normally sells products under its own brand (trademark), but the point of
that is to sell the products cheaply through large batch purchasing. The point of Seijo Ishii
original products, on the other hand, is to "provide customers with delicious foods of high
quality", and as we develop products, we make stringent checks at every stage, from sourcing
raw materials to manufacturing, so that we can always deliver products of good quality. Seijo
Ishii original products are not sold as a "brand". Instead, we compete over the content of the
product, so we are careful not to use the term "PB".
Q: What trends are there among your consumers?
Customers looking for the real thing are constantly evolving. A recent trend is "seasonal
foods".
For Japanese people, who treasure seasonal character, "seasonal ingredients" and "fresh
produce" are special things. We Japanese people, living in a country with four seasons, have
always eaten the crops that ripen, and the fish that are caught, in each season, as "seasonal
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Japan Buyer’s Interview
ingredients". Seasonal ingredients taste good and have high nutritional value, so they have
been seen as healthy foods. The word "Nouveau" is associated with Beaujolais Nouveau, the
new wine, but it is used with various products in the sense of "new" produce.
For example, there is growing demand for "nouveau" olive oil and maple syrup, as fresh
"products in season", when they have just been harvested. Even among foreign products,
those that emphasize seasonal character are gaining popularity.
Interview with Yoshihiro Hattori, executive director and manager of the
products department
Q: First, tell us about the status of Seijo Ishii
Our stores cover the Kanto, Chubu, and Kansai areas. We are opening around ten stores a
year, with the aim of reaching 100 stores by next year, 2013. To maintain Seijo Ishii quality,
however, we open stores once we have developed the personnel to staff them, rather than
emphasizing opening stores. However good our products are, opening stores that would
degrade the character of Seijo Ishii would disappoint our customers' expectations, and be a
negative for the company as a whole. People operate stores, and people serve customers, so we
feel that developing good human resources is the most important thing. Therefore, we provide
stepped training, through levels such as product training, store manager candidate training,
and management training. One thing that can be said in comparing Seijo Ishii with other
stores is that our legal category is "supermarket". But in practice, we have trading company
functions, we have factories, retail stores, and our own centers and warehouses, so we have an
unusual presence. The strength of those comprehensive functions enables unique
developments, and that is why we are rising rapidly as a company that customers looking for
the real thing, who are serious about food, look to.
Q: What do you do to find new import products?
Starting with shows in Japan, we also often attend shows overseas. We go every year to SIAL,
which is very large-scale, and to Anuga, which brings together 5~6,000 manufacturers. We
also go to IMS, in Koln, Germany, in January, among others. Our buyers went to a show in
Melbourne, Australia, last year. We also visited Fancy Foods shows on the US East and West
coats last year, for the first time in a few years. Australia has the opposite seasons to Japan,
its position in the southern hemisphere gives it access to things unavailable in the northern
hemisphere, and there is no time zone difference, so it is possible to save time, relative to
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Europe. I think that kind of thing will give Australia a strong edge. Sometimes we also listen
to reports from our affiliated companies about the situations at overseas trade shows, and
decide accordingly whether or not to attend. In the case of the show in Australia, the embassy
provided information on attending manufacturers and we ran a market survey in advance,
before arriving at the venue.
Q: What are your criteria for product selection?
Quality is number one, above all. If the quality is good, and so is the flavor, and there are
other characteristics, the fact that you eat with peace of mind is a sales point. Anyway, it's
quality first. However, even good products may contain foreign material. We worry about
whether efforts to keep foreign material out are good enough, whether caps are tightened
enough, and that kind of thing. Also, what is the production volume per day, what level of care
is taken over raw materials, what are the product characteristics, advantages over other
companies, and selling points, are among our product selection criteria. When selecting olive
oil from Italy or elsewhere, we consider things such as the manufacturing technology, the
production lines, whether the varieties used are limited, whether the producer has its own
farms and how long it takes to press and bottle.
When considering quality, what is really important is, does it pass Japanese quality
standards? That's because standards in Europe differ from those in Japan. One example is
whether water staining occurs when cans are sterilized by superheating. In Japan, cans with
water staining are removed. Or they may be re-washed and wiped. In the US and Europe,
cans like that are no problem.
Q: What attributes of counterpart companies do you see as most important?
Secured quality, and safety. The term "food safety" so goes without saying that I'd rather not
say it, but I think there shouldn't be any food that is dangerous to put in one's mouth.
When doing business with a foreign company, we never start transactions immediately, no
matter who introduced us to them. If it is a family business, it may be difficult to define the
scale of its operations or its other circumstances. Therefore, rather than things like the
amount of nominal capital, we try to look at how much it can produce per day, where it
exports to, and what its main products are. Also, in the event of a problem, it takes time to
reach solutions in overseas transactions, and there are various pitfalls, so we work through
trial imports.
If the timing is right, we may get involved in quality control, such as checks on local factories.
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Japan Buyer’s Interview
The seriousness and enthusiasm of the counterpart company is also important. Immediate
answers to our questions on price and minimum order quantities are also important.
Q: What kinds of imports do you handle at present?
Our main import products are wine and other alcoholic beverages. Other than that, we also
import dry fruit, nuts, chocolate (particularly in fall through winter), olive oil, and in chilled
foods, cheese, fresh ham, olives, etc. Italian olives were chosen as one of the consumer-selected
best 30 selection at the Supermarket Trade Show held in Japan in February.
Q: Why do those sell well?
The items that sell well are those that are made distinctive. The characteristics and features
of the product are clear and well defined and, after all, they taste good to eat. For example,
jam has a high price per unit, but its price per unit gram is not high. We use tangible
ingredients in the content, with no excess ingredients like artificial colors or preservatives, so
the amount of fruit content is something different in the unit calculation. Sicilian olives are
pickled fresh, not in liquid, so they sell well because they provide the fresh taste of the fruit.
Olives are developing from a single item to a core category. Fresh-picked olives have a short
expiration date, at 60 days. Seijo Ishii is not a trading company dealing with wholesalers, but
we are also not targeting retailers. One of the strengths of Seijo Ishii is that we can arrange
our own air freight, so we can control sales. So, instead of pickles in liquid, we can offer fresh
pickles picked this year, which have a much shorter expiration date but give the feeling of
fresh fruit, and that is why they sell well.
Q: How do you normally decide transaction terms?
We do not open letters of credit. New transactions are mainly paid in advance. We pay once
we have confirmed loading onto the ship and have accepted the invoice. Another form is that
we pay half in advance and the remaining half on arrival in Japan, at the port.
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Japan Buyer’s Interview
Q: What problems occur with your import sources?
Perceptions about claims differ. Sometimes we get the feeling there is some degree of
discrepancy from Japanese quality standards. For example, if several of a batch of imported
candies have come unwrapped, or if there are empty bags among tablet chocolates, or if the
cap of an olive oil bottle turns without opening, they respond to such complaints by saying it's
not a problem if the content is undamaged. There's a gap of perception in those cases. If the
counterpart does not accept that there is a problem, there is no way to solve that problem, and
we cannot continue to do business with a supplier that is unable to supply goods at the levels
demanded by Japanese consumers.
Q: What are the problems on the Japanese side?
In international trade, we make import judgments (import consultations) on our own imports.
In the case of judgments by the Japanese government, thorough testing is required if there
are no previous examples to go by. In some cases that may be excessively stringent for
products with no record of previous imports. That leads to strict control. In some cases, we
may take the step of importing based on past performance. In that case, we can do so for
simple products that are close to raw materials, or if the criterion is that the producer factory
has HACCP, ISO, etc. for quality control. In some cases, there may not be any global standard
for the goods to be imported. It can be awkward with details like interpretations of what is a
synthetic color and what is a natural color, because the materials concerned are used overseas
but not in Japan.
Q: Are there any countries that currently interest you, or items you want to
handle?
Other than importing manufactured products, we are also expanding imports of foreign raw
materials. Lately, as we develop Seijo Ishii original products, our buyers are buying raw
materials for the development of our products, not just products. Items like dry fruit and nuts
that can be traded in bulk have mainly been imported from Europe so far, but recently, we
have been importing raw materials from the places like the US and Australia.
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Japan Buyer’s Interview
Q: Finally, what would you name as one special characteristic of your
company?
As I said at the start, Seijo Ishii has factories, retail stores, trading company functions, its
own centers and warehouses, and can control its supply chain. I don't think that's a strength
that other companies have. Rather than just selling things, we can nurture and develop
products within a growing relationship of trust with our customers, and we review the
situation if the products don't sell.
Note) The discussion reported here, such as criteria for selecting products, including imports,
is general in nature, and does not indicate that any transaction will be established with Seijo
Ishii if those criteria are satisfied.
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