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Wednesday, March 12, 2003

MOM-AND-POP MARKETING CAMPAIGN

Shops go against the grain to sell U.S. rice


Staff writer

U.S. rice farmers have found an unlikely ally in their endeavor to penetrate Japan's heavily protected rice market -- owners of mom-and-pop rice shops who themselves are bearing the brunt of the nation's market-opening reforms.

Whether the alliance will last remains a question mark, as the two sides appear to have different perceptions of its future.

The USA Rice Federation, which represents more than 80 percent of all rice growers in the United States, recently launched an "American rice shop network" campaign, in which 44 shops in Tokyo and Kanagawa, Saitama and Kyoto prefectures have agreed to sell Akitakomachi and Koshihikari varieties grown in California specifically for the Japanese market.

Under existing trade rules, rice imported to Japan is limited to around 767,000 tons a year, or the equivalent of some 7.8 percent of the total domestic yield.

The federation's new marketing tactic won't change this, and the amount of rice to be sold through the rice shop network will be far too marginal to pose an immediate threat to domestic growers.

But in the long run, the campaign could help change consumers' perceptions of imported rice at a time when they are becoming more attentive to food safety, following the outbreak of bovine spongiform encephalopathy, or mad cow disease, in domestic cattle, and mislabeling frauds committed by the domestic food industry.

"We want to start small and grow big," Yasunori Satomi, director of the Japan field office of the USA Rice Federation, said at a recent news conference.

While the immediate attraction of U.S. rice might be its low price -- somewhere between 1,500 yen to around 1,900 yen per 5-kg bag, several hundred yen cheaper than average domestic brands -- federation officials are eager to stress its safety, saying their grain is tested three times for chemical residue.

They added that California, the only U.S. state that exports rice to Japan, has the toughest environmental regulations in America and the rice is 100 percent traceable, meaning consumers can track down the name of the farmers who grew it.

And what may be more psychologically important to consumers, the federation succeeded in persuading rice shop owners -- who, despite their declining status as distributors, are still viewed as experts in the nation's staple food -- to commit to sell U.S. rice all year round. Previously, the federation had sold its rice at supermarkets, but only on a spot basis.

Take Junichi Taguchi, 63, one shop owner in the network. The third-generation owner of a rice shop in Kawasaki, he can taste the subtle differences among various varieties, ranging from the top-of-the-line Koshihikari produced in the rice mecca of Niigata Prefecture's Uonuma district to the deliciously sticky Hitomebore from Miyagi Prefecture.

But despite his expertise, business is tough, as it is for many rice shops, which have lost customers to supermarkets and discount outlets after their monopoly on rice retailing was broken with market liberalization.

Until the 1994 revision of food laws that eased regulations on rice production and distribution, rice shops were by far the most predominant vendors.

According to a December 2002 survey by the Food Agency, however, 26 percent of 1,281 consumers surveyed replied that they purchased rice at supermarkets, followed by 24 percent who directly purchased from farmers and 19 percent who said family members sent them rice.

Only 10 percent of the respondents said they went to rice shops.

So when Taguchi's wholesaler suggested he join the network, with promotion costs entirely shouldered by the federation, he had little reason to resist.

However, Taguchi said he has mixed feelings about selling U.S. rice. He is concerned it could deal yet another blow to Japan's fragile agriculture industry.

"I don't want to destroy Japanese farmers, who are heavily in debt and struggling to break even," he said.

Taguchi added that he suspects any boost the campaign gives his business will not last long.

"I know they (the federation) will eventually expand their distribution channels to bigger retailers, and we will be trampled on again," he said. "But right now, I have nothing to lose."

The federation has provided shops with promotional materials, including stickers, flags and plastic rice bags bearing the Stars and Stripes. It has distributed promotional videos and even TV monitors to air consumer comments from organized rice-tasting parties.

"It tastes very good, and no different than the rice I eat every day," an elderly woman answers cheerfully in one of the videos when asked by an interviewer about the taste of U.S. rice.

The interviewer then asks her what kind of rice she usually eats. The woman's reply: "Uonuma Koshihikari!"

Federation officials refused to disclose how much money has been invested in the campaign, but said it is "one of the largest" among all efforts it conducts in 30 countries worldwide, and they hope to have 100 shops in the network by 2004.

Ultimately, consumers will be the judge of this alliance. Taguchi said that so far, he has sold six 5-kg bags of U.S. Akitakomachi, out of 135 kg he milled in February.



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