Females are generally more price-conscious than males and tend to prefer healthy foods with more variety in their diet - significantly different segment.
Trend is towards smaller packages and portions in snack items for women who want to carry them in their purse, and do not want to be seen eating a full-sized portion (strong growth in snack cup items, mini-size portions).
Japanese young people want smaller, more portable on-the-go items and are no longer restrained by their parents' taboo of eating while walking.
Products, like "Mujirushi" candies, are targeted only where no national brand producer exists - a successful niche marketing strategy suitable for Alberta producers.
Product development takes time, especially for imported goods, but trends and tastes change very quickly.
Low-volume, low-interest products add little to profits = low incentive.
High distribution costs mean high volumes are necessary.
Uncertain new product success means supplier volumes must be very flexible and adaptable in meeting upsurges in demand almost overnight.
From a cost standpoint, high volumes are important to Canadian producers, yet the volatility of this market certainly makes no promises.
Profit margins in 'services' are lower, but are critical in attracting customers - who will also buy higher margin food products. Consider that the number one sales growth rate is in utility payment services, and the convenience store movement towards one-stop shopping appears inevitable. The increased use of Internet could change convenience store services offered, yet there is an opportunity to serve as delivery outlets for online shopping and still achieve the goal of the customer entering the store facility. (Convenience stores have the advantage of being close to home and open 24 hours, so customers will not have to wait at home for deliveries).
Note that while overall retail sales in Japan fell by 4.4% in 1998 to Yen 23.24 trillion, Internet-based sales doubled to Yen 1.35 billion in fiscal 1998 and four times as many households (11%) are now hooked up to the Internet versus 1997. A major book wholesaler has already teamed up with a national convenience store chain to sell books on-line and deliver them through neighborhood convenience stores across Japan.
This trend could lead to an opportunity for specialized Alberta products to find a potential fit in this shift towards a convenience store catalogue, and online shopping with delivery (i.e. gift sets for items such as Alberta-brewed spirits, beef jerky, or other items not suitable/available for mass market export and consumption).
Conclusion
Overall, the convenience industry does not appear promising for Alberta agri-food processed products. The fast pace and constant change of the market would make it quite difficult and expensive for an Alberta product to achieve lasting market success. This is not to say it is impossible, as noted by several product successes, but simply rare and not easy to attain. Rather, success in the market appears to lie in areas of intermediary product supplies. This includes items such as potato and pork sausages for bento products. However, even the life span of a bento pork sausage averages 3 weeks before some change or improvement must be found. Even suppliers of intermediary products must be innovative and work to creatively develop unique products in categories where simplicity is the North American norm. As the convenience industry in Japan moves more and more towards trendy and fashionable market approaches, Alberta producers too must find new ways to get their products noticed - not by the importers but by the ever-fickle end consumer.
This information is maintained by: Gail Atkinson
Last Revised/Reviewed September 22, 1999
