Terrie's Take: The Japanese want Smoothies, Inose, Annuities, Sony & Stem Cells, Japan & China Babyfight, and Rising IPOs

Terrie's Take - AkihabaraNews.com

Terrie’s Take is a selection of Japanese-centric news collected and collated at J@pan Inc by long-time resident and media business professional Terrie Lloyd. AkihabaraNews is pleased to present Terrie’s learned perspective; we all could use another take on the news - here’s Terrie’s:

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Terrie’s Take on November 25, 2013

Feature:

  • Raw Food Smoothies Change Wellness Sector

Briefs:

  • Inose mired ever deeper in payment scandal
  • Annuity insurance policies redeemed in record numbers
  • Sony cameras track iPS cells
  • Japan and China on collision course over Senkakus
  • 2013 haul of IPOs continues


Raw Food Smoothies Change Wellness Sector 
It's no news that the Japanese have a long life expectancy. The World Health Organization (WHO) published in May this year figures showing that in 2011 (their most recent data) the average life span of Japanese women was 86, while for men it was 79. The men's figure actually fell from the year before, most likely because of the high death rate of lifetime smokers. Now around 34% of men still smoke, but back in the 1960's the number was as high as 85%.

However, a long life is not much use if you have to spend the last 20% of it incapacitated by illness and disease, so it is interesting that not only are lives lengthening, but for most women and many men as well, the quality of that extra lifespan is also improving. We reported a few weeks ago in TT-730 that the sports ministry (MEXT) found in a recent survey a full 44% of women aged 70-74 belong to a sports club or similar facility, while for men, the number was 40% for those 75 years or older.

The survey also found that due to better fitness awareness by older people, they were improving their strength and endurance as well. In fact, when compared to a survey done back in 2000, MEXT found from six physical tests that the average man or woman aged 70-74 today performs at least as well as a person aged five years younger 12 years ago. This is a remarkable improvement, and will no doubt have a big effect on life spans once the cohort of heavy smokers from the 1960's moves on.

It isn't just staying fit that is contributing to good health of our seniors. Diet is also a large contributor, and the trends here are also interesting. People are going "raw" and moving away from heavy fat and preservative-laden diets. A good measure of just how many people are doing this can be found from the sales of juicers and blenders in the market. According to research company GfK Marketing, about one million food processors (includes juicers and blenders) will be sold this year, which is about 70% up on 2011.

While this number may be near the peak of sales for such devices, the segmentation of these products as people become more knowledgeable (e.g., such as buying slow juicers instead of high-speed models) will mean that sales by value are likely to continue increasing steadily for the next few years.

Perhaps one of the most iconic brands in the food processor business is Vitamix, a family company based in Ohio, USA, which has seen sales of their heavy duty blenders rise rapidly in Asia since they set up a comprehensive consumer products distribution network about 10 years ago. The company makes machines which sit at the ultra high end of the market, retailing for JPY60,000-JPY80,000. The company sells its consumer models through a Shinjuku-based home products chain called Entrex -- in what has become a very successful collaboration.

Given that the average blender on Rakuten sells for around JPY5,000, you would think that that Vitamix would be struggling to sell something 20-40 times more expensive, not to mention being a lot larger and noisier. But in fact, Vitamix and Entrex have done a great job in convincing raw foods health fans that their two horsepower motor and fast cutting blades can literally "blast" the nutrients out of the raw food cell walls, thus producing concentrations of vitamins and minerals that you wouldn't get with low-end blenders.

Vitamix has created the high end of the blender/juicer market in Japan and is only just now being challenged by the likes of Blendtec for blenders and Hurom and others for juicers. Vitamix doesn't publish sales figures, but Entrex indicated to us a year or so ago that they had lifted sales over 50 times what the brand was doing here five years ago. This leads us to guess that if blenders account for about 70% of the food processor market (our guess), then by volume Vitamix, Blendtec, and other emerging high-end makers probably account for about 2% by volume and about 40% by value of the market. Not bad, and a good indication that people, old and middle aged, are voting with their wallets the equipment they choose to use to stay well.

An interesting contrasting trend is that as people spend more on raw foods and equipment to process that food, they are reducing their spending on supplements. According to the Japan Direct Marketing Association (JDMA), sales of mail-order health foods fell 2% in September over the same period last year, to JPY15.7bn. Currently the overall health food market in Japan is worth somewhere around JPY1.876trn.

The reason for the fall off in the consumption of vitamins and other supplements is supposedly to be found in the morning smoothies all those blender owners are making. Raw food is considered more holistic and safer than relying on dried powders and pills. Possibly from an overall wellness point of view, this is the right thing to do, although supplement makers would argue that aged people in particular need additional intakes of certain vitamins and minerals to maintain optimum health. Elevated levels of Calcium and Vitamin C would be one good example.

Although we don't have numbers, we imagine that one supplement heavily impacted by the raw foods movement is that of "powdered Green Juice" or "aojiru" -- those little sachets of green powder that used to be so popular a few years ago. Now, with the emergence of machines that can produce the same "smoothie" effect from totally fresh veges, it's only natural that powder becomes less attractive. The awareness of raw food veggie smoothies is increasing and in a recent Gain Report (No. JA 3506, published 7/22/2013), the USDA quotes a survey by the Takii seeds company that consumers are really taking to veggie smoothies as a morning starter. The results among the respondents, mostly aged 20-40 years old, were:

* 64.8% of the respondents answered that they had heard of veggie smoothies 
* 86% haven't had one yet, but of those, 55% said they'd like to try one
* 85% thought veggie smoothies would improve health
* 78% through veggie smoothies would improve skin condition
* Of those who were drinking veggie smoothies, 64% said they felt body changes, such as relief of constipation and better skin

Inose mired ever deeper in payment scandal
What makes the JPY50m loan scandal that Tokyo Governor Naoki Inose is currently mired in even more embarrassing is that he was elected as "Mr. Clean" after the rather tarnished preceding governor. Inose was caught out when prosecutors raided the head office of hospital chain operator Toshukai in September over election fraud charges against the son of the founder of that firm. While there, the prosecutors found the JPY50m in cash in an envelope and were informed that the money came from Inose as a loan repayment. ***Ed: Oops. Inose protests it was merely a loan and nothing sinister, but unfortunately for him, having waited nine months to repay it and only making the repayment after it seemed that Toshukai was going to be investigated, makes it look really fishy. We'd be surprised if he is not forced to resign in the coming week.**
(Source: TT commentary from mainichi.jp, Nov 22, 2013)

Annuity insurance policies redeemed in record numbers
The last six months have not been good ones for the sellers of annuity insurance policies, as the robust stock market has caused many policy holders to cancel their contracts so as to lock in profits from the rally. Mitsui Sumitomo Primary Life Insurance said that it has seen a 1000% increase in policy cancellations, while Dai-ichi Life has reported levels of between 160%-450%. ***Ed: Interesting quote from the chief economist at Daiwa Institute of Research, who said to the Nikkei that he reckons if Abenomics is successful in inducing inflation, then private holders of about JPY200trn of bank deposits will shift that money into stocks within "several" years. We bet the entire financial industry is hoping the same thing.**
(Source: TT commentary from nikkei.com, Nov 23, 2013)

Sony cameras track iPS cells
Interesting to see the offshoots of applications and technology relating to iPS stem cells, now that research regulations have been significantly loosened. Sony has announced special high-speed micro-imaging cameras which can track the movements of iPS cells as they are subjected to various test additives and physical conditions in labs. The cameras include software that allows researchers to graph cell reactions and survival rates. Sony's first customers include the Center for iPS Cell Research and Application at Kyoto University.
(Source: TT commentary from nikkei.com, Nov 22, 2013)

Japan and China on collision course over Senkakus
China has just ratcheted up the pressure on Japan over the disputed Senkaku Islands, by unilaterally declaring that the airspace above the islands will become part of its "East China Sea Air Defense Identification Zone". This means that aircraft which don't identify themselves to Chinese air control could be subject to defensive emergency measures by Chinese fighter aircraft. Given that Japan already has a similar ID system operating over the islands, this sets up both countries for air confrontation if either decides to overfly the islands. As a result of the Chinese announcement, both the U.S. and Japan have protested, with the U.S. calling the move a "destabilizing attempt to alter the status quo in the region". ***Ed: Clearly Japan needs to build a base on the Senkakus lickety split or risk losing them. It should do what the Philippines did in the Spratlys, and simply float over and sink in shallow waters some old ships and barges.
(Source: TT commentary from reuters.com, Nov 24, 2013)

2013 haul of IPOs continues
The rising stock market is helping boost the IPO market for companies newly listing on the nation's bourses. To date more than 60 companies have either gone public or have announced they will do so by the end of the year. This is the highest number of IPOs since there were 121 new listings in 2007. About 80% of companies that listed since December, 2012, are still trading above their offering price, and based on this robust performance another 80 companies have already indicated an intention to go public next year. ***Ed: The start of another bubble, we suppose. Question is: how long will it last?**
(Source: TT commentary from bloomberg.net, Nov 19, 2013)

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Images: Terrie’s Take; AkihabaraNews.com

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