Global Marketing Management - UMKD6Q-15-3

INTO
JAPANESE
SAVORY
SNACKS
MARKET
Trinh Duy Phu - 21078351
 POLITICAL Analysis
In terms of foreign policies, in October 2020, Japan and the
Macro Analysis (PESTLE)
UK signed a post-Brexit free trade agreement in Tokyo.
This will boost trade by US$20bn over the next 15 years
(Marketline, 2021). This agreement will boost economic
ties between the UK and Japan. Moreover, Japan is
considered to be a politically stable country, according to
the Marketline report in 2021.
ECONOMIC Analysis
=> The political stability and the newly-established FTA Japanese people have high living standards. As of 2020, the GDP
between the UK and Japan would benefit Graze when it per capita in Japan reached $40,193, which ranks 32nd place
penetrates the Japanese market. compared to the rest of the world (The World Bank, 2021).
The nominal GDP of Japan is at $5,058 trillion in 2020 (The
World Bank, 2021), making it the country with the third
highest nominal GDP in the world (Statista, 2021).

SOCIAL Analysis Japan’s foreign direct investment (FDI) inflows remained low at
It is possible for Graze to enter the Japanese market due to: only 0.2% of GDP in 2020 compared to other developed
economies, owing to high costs, an ageing labor force, labor
(1) Japanese consumers prefer new and tailored or
market rigidities, and weak economic development
personalized products, especially millennials
(Euromonitor, 2021).
(Euromonitor, 2021).
(2) There is an increasing trend of sustainable living among => It can be indicated that Japan is a consuming market.
Japanese consumers (Euromonitor, 2021). However, the underwhelming FDI inflows is a prevalent
However, food delivery is not that popular in Japan since only challenge for Graze to enter Japan.
12% order food for home delivery on a weekly basis
(Euromonitor, 2021).
 TECHNOLOGY
ANALYSIS
Japan ranks fifth out of 141 countries for the infrastructure
pillar, according to Marketline in 2021. Japan’s train
services are efficient as they were ranked first out of
141 nations. In terms of quality of roads, Japan’s rank
stood at fifth out of 141 nations in 2019 (Marketline,
2021).
Japan has one of the highest numbers of internet users as
a percentage of the total population among the APAC
nations (Marketline, 2021). The roll out of Japan’s 5G
network is contributing to the development of the
country’s digital landscape, as Euromonitor stated.
=> Graze can benefit from these business boons when it
enters Japan.
Legal
Analysis
According to the Heritage Foundation, Japan scored 73.3 out of 100 on the
Index of Economic Freedom 2020 and ranked as the 30th freest
country out of 180 nations in the world. This means that Japanese
individuals and groups can engage in business with anybody of their
choosing.
Japan has a higher tax rate than the Asia-Pacific average (46.7% compared
to the OECD average of 39.9%). High tax rate means high business
costs, which is unappealing to foreign investors.
Moreover, it is relatively more cumbersome to start a business in Japan. as
it takes at least 8 procedures and 11.5 days in comparison with OECD
high income average of 4.9 procedures and 9.2 days. The cost of starting
a business (as a % of income per capita) in Japan was 7.5% (% of
income per capita), much higher than the OECD average of 3.0% in
2020 (Marketline, 2021).
=> While having economic freedom, Japan is not the easiest country to open
a business.
 Micro Analysis
(Industry status &
Porter’s 5 Forces)
MARKET SIZE
While other industries were heavily impacted by
the COVID-19 pandemic, the savory snacks
segment in Japan experienced a small increase in
sales, from ¥1,288 billion in 2019 to ¥1,306 in
2020, according to Euromonitor.
Based on the datagraphics of the savory snacks sales in
Japan, the industry is predicted to continue its steady
growth in the next few years. The sales performance of the
savory snack industry although plummeted to -0.5% in
2021 but it also shares the same growing pattern with that
of the sales. Among the savory snacks categories, nuts,
seeds, and trail mixes have the most outstanding growth
with the growth rate of 1.0% compared to the negative
growth rate of other categories (Euromonitor, 2021).
TREND
GROWTH
 Due to COVID-19, Japanese people developed a habit of drinking at home.
Consumers in Japan usually enjoy drinking alcoholic drinks accompanied
with savory snacks (Euromonitor, 2021).

The increased environmental awareness of Japanese consumers means the

demand for sustainable packaging in savory snacks is strong since these
tend to be over packaged. Furthermore, sustainable ingredients, such as
plant-based protein, are also a concern for Japanese consumers
(Euromonitor, 2021).

Collaborations between brands either within or across product categories has

proven to be a highly successful strategy in snacks in Japan because
consumers enjoy a fast turnover of new flavor innovations in savory snacks
(Euromonitor, 2021).

Consumer Preferences
 Competitive Landscape
The two most prominent players in the savory snacks industry of Japan are currently
Calbee Food Co Ltd and Kameda Seika Co Ltd.

CALBEE Food Co Ltd Kameda Seika Co Ltd

+ Currently possessing 16% of the

market shares of the savory snacks + Kameda Seika is the second
market and over 50% of the total leading company in the savory
share of the snack industry, Calbee is snack competition with 9.1% of
the strongest competitor in the the acquired market share in the
Japanese savory snack segment savory snacks industry
(Euromonitor, 2021; Calbee, 2021). (Euromonitor, 2021).
+ The company earned revenues of + In 2021, due to the impact of
¥266,745 million for the fiscal year COVID-19, the report revenue of
ended March 2021 (FY2021), an Kameda Seika is at ¥103,305
increase of 4.2% over FY2020, million, which is a decrease of
according to the company’s annual 0.5% from 2020 (Marketline,
report in 2021 (Marketline, 2021). 2021).
+ The company’s success mostly + Rice crackers and rice-based
comes from its product line of potato snacks are the company’s main
chips products, in which Calbee line of product, which is popular
Potato Chips is the leading brand with for being the best snacks to eat
more than 9% of the savory snacks with alcoholic drinks, according to
brand share (Euromonitor, 2021). Euromonitor.

Threat Threat of
of new entrants
substitutes
+ Since the savory snack + There are a wide range
industry still enjoyed a of other types of products
steady growth in sales for consumers to choose
volumes despite the impact from other than savory
of COVID-19 snacks, such as
(Euromonitor, 2021), the confectioneries, beverages,
market is attractive to and packaged food.
new entrants.
+ Switching costs for
+ The savory snack buyers are low since snacks
industry in Japan is prices are usually
currently dominated by affordable for most
large and well-known consumers and retailers are
local companies such as heavily influenced by end
Calbee or Kameda Seika, consumer demand
which proves to be a (Marketline, 2020).
challenge for newcomers
=> Threat of substitutes is
to enter the market.
high.
=> Threat of new entrants
is moderate.
PORTER’s 5 forces
Bargaining power of
suppliers
+ Most firms in the market buy
perishable raw materials (fruits,
potatoes, etc.) directly from farmers,
which heavily rely on the industry
(Marketline, 2020). Therefore,
suppliers’ power is weakened.
+ Leading players must maintain
product quality to maintain their brand
equity in the long term (Marketline,
2020). Therefore, raw materials of
appropriate quality are a need for those
companies. Hence, suppliers’ power
increases.
+ Most players in the market do not
focus much on integrating backwards.
However, some farmers began to
integrate forward, particularly with
artisanal products which strengthens the
power of suppliers (Marketline, 2020).
=> Bargaining power of suppliers is
moderate.
Bargaining power of
buyers
+ The retails network in Japan
is well-developed with large
retails chains possessing
significant financial and
bargaining power over market
players, who must compete for
shelf placements in leading
retailers' stores (Marketline,
2020).
+ Savory snacks are just
another small segment of the
food categories in retail stores
so consumers can have a
variety of options to choose
from (Marketline, 2020), which
increases buyers’ power.
+ However, buyers can be
easily influenced by strong
branding (Marketline, 2020),
which decreases buyers’ power.
=> Bargaining power of buyers
is moderately high.
Industry
Competition
+ Large corporations like
Calbee or Kameda Seika
are the leading competitors
in the market, with both
accounting for more than
25% of the savory snacks
market share in 2021
(Euromonitor, 2021).
+ Due to the wide range of
options for savory snacks
and the similarity between
options, rivalry between
firms is pushed further with
each player looking to
differentiate itself from the
rest of the industry.
=> Industry competition is
high.
 Internal Analysis
About
Nature Delivered Ltd, or more widely known as
Graze, is a company specialized in plant-based
healthy snacks with its main headquarter in
Richmond, England, the UK. The company was
established in 2008 and is now a subsidiary under
Unilever since 2019 (Marketline, 2021).
Mission
Our mission is to deliver the healthiest and tastiest
snacks by using the best ingredients that nature has to
offer that caters for the preferences of our lovely
customers.
Company Information
Vision
Graze was founded with the wish to look after the people
and the planet that we are living on – the Earth. We aspire
to be a force of good in the world.
RESOURCES
1 CEO & 262 employees (Marketline, 2021)
Infrastructures: Custom-build warehouse in Hayes,
London; Headquarter at Kingston, London; Graze’s
website; Customer management tools; Manufacturing
planning; Logistics and production systems; Windfarm in
Scotland; Graze School of Farming (The Register, 2016;
Graze, 2021).
Technology: DARWIN algorithm; Unique snack recipes
(Wired, 2012; Rahul, 2017).
Raw materials (nuts, fruits, cereals, etc.) from local
farmers and commodity traders.
 Infrastructure
• Investing in building the website, customer management tools, manufacturing planning, logistics and production systems (The Register,
2016).
• Commissioning custom-made machines for sustainable packaging (The Register, 2016).
SUPPORT ACTIVITIES

Human Resource Management

• Training cashew farmers and processors in Vietnam on improving their social and environmental practices.

Ma
• Focusing on taking care of employees’ wellness such as offering free snacks, private health insurance, etc.

Technology

rg
• Developing the DARWIN (Decision Algorithm Rating What Ingredient's Next) algorithm to personalize subscribers’ snacking preferences (Wired, 2012).

in
• Creating unique recipes that guarantee no genetically engineered ingredients, artificial flavors or colors, high-fructose corn syrup or trans fats (Wired,
2012; Mentalfloss, 2015).

Procurement
• Maintaining close relationships with suppliers from the UK.
• Negotiating pricing and shipping logistics with local vendors (Mentalfloss, 2015).

Inbound OPERATION Outbound Logistics Marketing & sales After Sales Services
Logistics For subscription boxes
+ Using DARWIN algorithm to + Offering subscription + Accepting feedback
PRIMARY ACTIVITIES

+ Obtaining raw For subscription boxes service in which subscribers

analyze subscribers’ preferences from subscribers.
ingredients directly from inputted on Graze’s webpage
+ Shipping snack boxes to will receive a snack box that is
different local UK subscribers’ doors through personalized to their tastes and

in
(Wired, 2012).
growers, with some of the + Custom-made machines picking Royal Mail (Wired, preferences based on their

rg
materials being bought and sorting snacks based on 2012). data put on the website.
subscribers’ data (Wired, 2012; The For normal products + Launching ad campaigns,

from commodity traders
from other countries
(Vietnam, for example).
+ Transporting materials
to the custom-made
warehouse in Hayes,
London.
Register, 2016) .
+ Assembling chosen snacks into
boxes for packaging.
For normal products
+ Processing raw ingredients into
snacks.
+ Packaging snacks contents into
products.
+ Processing and
distributing online orders
from Graze’s website.
+ Distributing products to
associated retailers across
the UK.
Ma
sales promotions, etc. on
different social sites.
+ Launching debut TV
commercial campaign
(Oakes, 2021).
+ Operating Graze School of
Farming in Kabbubu village, Sources: Graze, 2022
Uganda.
 Firm Specific Advantages (FSA)
&
Country Specific Advantages (CSA)

FSA CSA
Knowledge-based + Windfarm in Scottland. => Untransferable. Japan’s climate
+ Integrating DARWIN algorithm. is not suitable for windfarms and the total area of land of the
=> Transferable. DARWIN is a proprietary algorithm country is not enough for windfarm.
developed by Graze for the sole purpose of choosing the best
snacks tailored to customers’ preferences.
+ Unique healthy snacks recipes.
=> Transferable. Training courses in Japan can be held to
transfer the know-hows of creating unique recipes.

Marketing-based
+ Brand image of a sustainable business (B Corp Certificate,
FSC certified packaging, etc.).
=> Transferable. The sustainable way of doing the snacks
business is the core value of the company.
+ Subsidiary of Unilever.
=> Transferable. Unilever is a multinational giant which is
now operating in over 190 countries, including Japan.
Therefore, entering the country’s market would be easier.
+ Snacks box subscription service.
=> Transferable. Japanese consumers’ preference of
personalized goods and services is currently a growing trend.
 FIT OF COUNTRY MARKET

Advantages and Opportunities Disadvantages and Challenges

+ Graze is a snacking business that strictly follows the sustainable path, which
+ Starting a business in Japan requires higher costs than average and the
falls in line with Japanese consumers’ growing tendency of choosing products
process is troublesome.
made from healthy ingredients and with sustainable packaging.
+ More than 95% of the sales distribution of savory snacks comes from retail
+ The subscription service is also an advantageous characteristic since the
stores while non-store retailing only accounts for 2.5% (Euromonitor, 2021).
majority of consumers, especially the millennials, are looking for products
Because Graze relies more on its online sales rather than that of retails, this
and services that are tailored to their needs and preferences.
could pose as a challenge for the company to enter the market.
+ Japanese consumers also love trying new and unconventional snacks which
+ Low brand awareness since Graze is a new entrant in the Japanese savory
are resulted from a cross-brand collaboration. Since Graze has done this
snacks market.
before with the collaboration with Marmite (Graze, 2021), the brand has
experience in this field.

After analyzing all aspects of the Japan savory snacks market and the company, Graze
should consider entering the market due to the high compatibility of the company’s mission
and Japan’s savory snacks market trend and customers’ preferences. However, due to
CONCLUSION culture differences and consumers’ buying habits between the UK and Japan, some changes
should be made to assist the penetration into the Japanese market, such as focusing more on
retail distributions.
REFERENCES
Calbee, 2021. Calbee Report 2021. Calbee Group Integrated Report [online]. Available at: https://www.calbee.co.jp/en/ir/pdf/2021/CalbeeReport2021_en.pdf
[Accessed 6 March 2022].

Clarke, G., 2016. When DIY is not enough: Web-snack firm Graze has an offline awakening [online]. The Register. Available at:
https://www.theregister.com/2016/06/16/online_graze_in_reverse/ [Accessed 8 March 2022].

Euromonitor, 2021. Consumer Lifestyles in Japan [online]. Available at: https://www.euromonitor.com/consumer-lifestyles-in-japan/report [Accessed 7 March
2022].

Euromonitor, 2021. Consumer Values and Behaviour in Japan [online]. Available at: https://www.euromonitor.com/consumer-values-and-behaviour-in-japan/
report [Accessed 5 March 2022].

Euromonitor, 2021. Consumer Values and Behaviour in Japan [online]. Available at: https://www.euromonitor.com/consumer-values-and-behaviour-in-japan/
report [Accessed 5 March 2022].

Euromonitor, 2021. PEST Analysis: Japan [online]. Available at: https://www.euromonitor.com/pest-analysis-japan/report [Accessed 5 March 2022].

Euromonitor, 2021. Savoury Snacks in Japan [online]. Available at: https://www.euromonitor.com/savoury-snacks-in-japan/report [Accessed 5 March 2022].

Graze. 2022. Exclusive Marmite Bundle [online]. Available at: https://uk.graze.com/collections/marmite/products/exclusive-marmite-bundle [Accessed 8 March
2022].

Graze. 2022. Graze - Caring for the environment [online]. Available at: https://www.graze.com/uk/about/sustainability [Accessed 3 March 2022].

Graze. 2022. Graze - How graze works [online]. Available at: https://www.graze.com/uk/about/how-graze-works [Accessed 8 March 2022].

Graze. 2022. Graze – Jobs [online]. Available at: https://www.graze.com/uk/jobs [Accessed 8 March 2022].
REFERENCES
Heritage. 2020. Japan Economy: Population, Facts, GDP, Business, Trade, Unemployment [online]. Available at: https://www.heritage.org/index/country/japan
[Accessed 5 March 2022].

Marketline, 2020. Savory Snacks in Japan [online]. [Accessed 7 March 2022].

Marketline, 2021. Japan In-depth PESTLE insights [online]. [Accessed 7 March 2022].

Marketline, 2021. Macroeconomic Outlook Report: Japan [online]. [Accessed 5 March 2022].

Marketline. 2021. Calbee Inc [online]. Available at: https://advantage-marketline-com/Company/Summary/calbee-foods-co-ltd [Accessed 7 March 2022].

Marketline. 2021. Kameda Seika Co Ltd [online]. Available at: https://advantage-marketline-com/Company/Summary/kameda_seika_co_ltd [Accessed 7 March
2022].

Marketline. 2021. Nature Delivered Ltd [online]. Available at: https://advantage-marketline-com/Company/Summary/nature-delivered-ltd [Accessed 7 March
2022].

McCarthy, E., 2015. The Snacks-by-Mail Company Graze Turns Snacking into a Science [online]. Mentalfloss. Available at:
https://www.mentalfloss.com/article/71233/snacks-mail-company-graze-turns-snacking-science [Accessed 8 March 2022].

Nast, C., 2012. Graze anatomy: the tech behind Graze.com's ultra-customised snacks [online]. WIRED. Available at: https://www.wired.co.uk/article/graze-
anatomy [Accessed 8 March 2022].

Oakes, O., 2021. Unilever brand Graze debuts on TV with talking squirrel 'CEO' [online]. Campaign. Available at:
https://www.campaignlive.co.uk/article/unilever-brand-graze-debuts-tv-talking-squirrel-ceo/1712386 [Accessed 8 March 2022].

World Bank Group, 2020. Doing Business 2020 [online]. Available at: https://documents1.worldbank.org/curated/en/688761571934946384/pdf/Doing-
Business-2020-Comparing-Business-Regulation-in-190-Economies.pdf [Accessed 4 March 2022].