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Wednesday, Aug. 14, 2002
Food makers find an escape route
Cobranded instant noodles point to a way out of deflation
Not long ago, instant ramen from a prestigious noodle shop would have been an odd combination.
But some major food manufacturers have been adding famous names -- and value -- to their instant foods in an effort to glean profits as prices fall in the continuing economic downturn.
Tying up with famous ramen shops or curry restaurants, these ready-to-eat foods -- available at convenience stores -- imitate the flavor and characteristics of the original dishes.
Some have even been successful in getting consumers sufficiently curious to pay higher prices amid the recession.
And this is apparently creating a golden cycle: Alliances with food makers make the ramen shops more famous, which in turn boosts sales of the copied instant ramen.
The trend began in April 2000 when Nissin Food Products Co., the nation's top maker of instant ramen, and leading convenience chain Seven-Eleven Japan Co. began marketing two instant ramen products, one based on meals served at Ippudo, in the Hakata district of Fukuoka city, and the other based on those served at Sumire, in Sapporo.
A bowl of ramen at Ippudo costs about 650 yen, while the price at Sumire is around 750 yen, but the instant versions were both priced at 250 yen.
A cup of instant ramen usually sells for under 200 yen.
Nissin Food sold 17 million units of Ippudo and Sumire cups of ramen in the first 14 months after their launch, according to company spokesman Shinichi Kuwata.
While the firm declined to reveal its original sales target, Kuwata said the response was far stronger than initially projected.
Since then, Nissin Food has launched 14 more products, including variations of the Ippudo and Sumire brands.
Although the firm usually packages new products in eye-catching designs and wages massive advertising campaigns, it did not do so for the Ippudo and Sumire versions. Since the two shops were already well-known, mainly through magazines and gourmet TV programs, most consumers were able to imagine what they would taste like when they saw the names on the packages, Kuwata said.
Kanebo Foods Ltd. and other competitors have also launched similar products featuring ramen shops that are so popular that customers line up and wait -- sometimes for an hour -- before they can get a seat.
Earlier this month, Kanebo Foods released a 250 yen cup of ramen based on the fare at Hananoki, in Utsunomiya, Tochigi Prefecture. It was the firm's 20th such product.
Behind the trend is manufacturers' and retailers' desire to escape the nation's price wars. The demand for instant, frozen and other ready-to-eat foods has peaked, and price competition is becoming increasingly tough, according to Tsutomu Matsuno, a food industry analyst at Daiwa Institute of Research Ltd.
"Retailers are worn out by deflation, so they are looking for manufacturers to come up with products that sell at a premium because of added value," he said. "Makers also need products that differentiate themselves from their competitors."
One factor that enables manufacturers to try out these products is the advanced technology that has been developed to replicate instant noodles and soup, said Mitsuaki Yamamasu, a spokesman for the Japan Convenience Foods Industry Association.
Ramen shop celebrities, on the other hand, see their own merits.
Hiroshi Kawahara, who runs the Nandenkanden ramen shop in Tokyo's Setagaya Ward, had a second instant ramen produced by Sanyo Foods Co. released in May. A TV celebrity, Kawahara said he enjoys taking part in the instant ramen project.
While admitting technological progress has improved the taste of most instant versions, Kawahara believes it is impossible to exactly reproduce his original ramen, especially the noodles. But the instant ramen he produced enables his fans across Japan to get a taste of what the ramen in his shop is like.
"And whether people think the instant ramen tastes good or bad, the experience of eating it seems to encourage people to consider actually coming to my shop and trying the original," he said.
The trend has also spread to other ready-made foods, including curry.
In the market for pouches of curry, which is just as competitive as the ramen market, MCC Foods Products Co. of Kobe sells four types of special curry sauce, produced by famous chefs. Packages containing 200 grams are priced above 350 yen, while the firm's ordinary products, as well as those of its competitors, are priced below 300 yen.
The firm has become more selective in the ingredients it uses, as well as spending more time on development, compared with its regular products, resulting in the higher prices, MCC Foods spokesman Takao Fushiki said.
S&B Foods Inc. has been marketing a series of pasta sauces produced by Tsutomu Ochiai, the chef at the La Bettola Italian restaurant in Tokyo's Ginza district. The restaurant is often described in the media as having among the best Italian dishes in Tokyo and securing a reservation is difficult.
In the year to March 31, S&B sold more than 700 million yen worth of the series -- each retailing for 250 yen -- and has set a sales target of over 1 billion yen for this business year after adding new variations, a company spokeswoman said.
The firm also markets curry produced by the chef of popular curry and rice restaurant Pakumori in Tokyo's Shinjuku Ward and potato chips with the taste of the "okonomiyaki" pancakes served at the Yamamoto eatery in Osaka.
Nichirei Corp., a major maker of frozen food, in March began marketing four products replicating dishes from famous restaurants in Tokyo, Kyoto and Kobe, priced at around 500 yen.
"With frozen products being discounted by between 30 percent to 40 percent these days, we were determined to provide something very special that had value and couldn't be marketed at a bargain price," Nichirei spokesman Yoshinori Okada said.
Some food manufacturers are cautious about whether the trend will last, however.
"In the end, it all depends on how the consumers feel about these products," Kuwata of Nissin Foods said. "It's really only the truly tasty products that will survive the competition."