Lessons learned: Japan F&B companies prioritise manufacturing, R&D and safety amid second COVID-19 state of emergency
The Japan government first declared a state of emergency in capital Tokyo on January 8, as COVID-19 cases surge to 5,000 a day, the highest levels since the start of the pandemic. It was then extended to Kanagawa, Chiba and Saitama prefectures.
Under this emergency order, Japan's Prime Minister Yoshihide Suga has ordered companies to encourage their staff to work from home and reduce office populations by 70%.
In effect until February 7th, restaurants and other establishments that serve alcoholic beverages are asked to close early, and residents to refrain from going out for non-urgent reasons.
This is a relatively softer order compared to Japan’s first nationwide state of emergency from April to May 2020, where bars, clubs and non-essential businesses were asked to close.
The government is now considering adding Osaka, Kyoto, Hyogo, Aichi, Gifu, Tochigi and Fukuoka prefectures into the list.
Manufacturing full steam ahead
For Kirin Group, production and distribution operations are as usual as it seeks to supply food, beverage and pharmaceuticals.
Ataka Takashima from Kirin Holdings corporate communication department said: “The Kirin Group will continue to fulfill its manufacturing and supply responsibilities while complying with the local regulations and policies.”
At Nippn Corporation, manufacturing is showing no signs of slowing, as the firm continues to maintain a stable supply of staple foods.
Over at Hotei Foods Corporation, Takuma Mizuno, section chief of product planning said its raw material supply, manufacturing and delivery would not be affected under this order.
At Asahi, it has encouraged non-production staff to work from home since July 2020.
Based on government guidelines, Nippn and Kirin have also implemented flexible working arrangements including working from home and staggered commuting.
Takashima said: “Top priority will be given to the life and health of employees, their families and the stakeholders who support the daily business activities of the Kirin Group.”
Ajinomoto’s senior manager of global communications, Daisuke Nakamiya said last year’s lesson of shifting to flexible arrangements, made this year’s transition seamless.
“Most of the business negotiations with customers in the sales division are shifting to online, and it is becoming possible for sales to work from home now,” he added.
“In the production division, on-site employees are required to come to work, so thorough corona measures are taken at each factory.”
What we saw last year
We asked the companies what they witnessed this year during the first state of emergency and throughout the year.
The companies collectively agreed that on-trade or foodservice sales were hit hard during this period, but retail products witnessed some increases. They expect this trend to follow this year.
In 2020, Nippn observed higher demand for its retail products such as pasta (long shelf-life), frozen food (convenience), wheat flour and premixes (increase of at-home consumption), according to Naoyuki Tsuda, general manager of corporate communication at Nippn Corporation.
Mizuno of Hotei Foods said many products such as hygiene related products, masks, disinfectants, and food products like pancake powder were out of stock.
“As a result, consumers became more anxious, and some behaviours such as "stocking up" and "resale" were observed.
“As a food manufacturer, we believe that a stable supply without shortages is an important mission to prevent consumers from becoming anxious.”
Haruka Aoki, chief of corporate communication at Nissin Foods Holdings said December was typically its busiest month. “December is when our products are most in demand, so we have been working since October to increase production. We have plenty of inventory and will be able to meet production demands even in this state of emergency.”
In addition, Hotei Foods observed that while the frequency of supermarket visits were reduced, there was a higher tendency to buy in bulk.
Canned food sales soared in 2020, as "The capacity of home refrigerators are limited, so demand for products that can be stored for a long time at room temperature increased,” Mizuno said.
Like last year, Hotei Foods expects demand for long-life products such as canned foods continue to grow.
Nakamiya from Ajinomoto said demand for its household seasonings, processed foods, frozen foods, and beverages such as coffee increased significantly last year.
“In the market, the demand for household products increased at a stretch and a supply shortage occurred, so we stopped discount sales and shifted production to our main items to secure supply.”
With consumers also becoming more health-conscious, Kirin observed growing interest in products with added health functions such as its zero sugar beer (KIRIN ICHIBAN Zero Sugar), and immunity-focused functional food brand (iMUSE).
The iMUSE brand contains Kirin’s proprietary Lactococcus lactis strain Plasma. In November 2020, sales of iMUSE beverages increased about eight times compared to November 2019.
Asahi’s low-carb beer also performed well last year, according to Kristin Chiu from corporate communications.
With these changing consumer demands, many companies are focused on R&D as they look to develop products to cater to different needs.
Asahi remains committed to strengthening its main brand, Asahi SuperDry to cater to home consumption. It will launch a new extension product - Asahi SuperDry NAMAJOKKIKAN which is expected to taste like draft beers served at restaurants.
The company is also intending to launch a low-alcoholic beer line in March called BEERY.
“It is beer-taste drink with Abv 0.5%. Our target is sober-curious consumers who don’t drink much,” Chiu said.
This year, Kirin will continue to focus on health needs and products that promote the sensible intake of sugar and calories.
Nippn is continuing its R&D efforts to develop nutritious and tasty food as well as functional ingredients.
Elsewhere in Asia, Malaysia has also declared a partial lockdown on several states to curb the spread of COVID-19 as daily infections surpass 3,000. Residents can only travel within a 10km radius to buy food and necessities, food stores allowed to operate take-aways only, and all non-essential businesses will be closed.