Terrie's Take: Ramen, 2.5m Bowls a Day, Japanese Air Guitar Champion, Chinese Tourists, GDP, and Taxes!

Terrie's Take - AkihabaraNews.com

Terrie’s Take is a selection of Japan-centric news collected and collated 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 September 1, 2014

Feature:

  • Ramen, 2.5m Bowls a Day and Other Interesting Stats

Briefs:

  • Concern about ongoing GDP contraction
  • Japanese woman wins world Air Guitar contest
  • Chinese are the top spending tourists
  • Amazon duking it out with local publishers
  • Tax man chippeth away

Ramen, 2.5m Bowls a Day and Other Interesting Stats
There can be few more satisfying meals in Japan than a steaming (or chilled) bowl of ramen. Pork, miso, soy, salt, curry, or vinegar flavored. Thick or thin, al dente or soft. Vegetarian, chicken, seafood, or strictly Halal. Garnished with pickles, veges, kimuchi, or even cheese. Eaten straight with pepper, garlic paste, or sheets of nori. Served in a luxury hotel, a ramen specialty shop, a streetside yatai, or in a polystyrene cup at home or on the sidewalk outside a convenience store. All we can say is, "yum!" 

We won't go into whether ramen is actually a "food", in the sense that it nourishes and supports life. In truth there isn't much in a basic serving other than carbs, fat, and salt, but if you have nothing else, yes, it will keep you going for a while. For a normally healthy person, certainly a bowl a week isn't going to hurt, and indeed, there are people who have survived for years on ramen and nothing else. Take the case of 17-year old Georgi Readman, from the Isle of Wight, UK, who has been eating only ramen for the best part of the last 13 years. Apparently she has a selective eating disorder that makes ramen the only food she can eat. Doctors say that she is malnourished and has the body of an 80 year old, but looking at her interview and photos, we are amazed at how normal she looks. http://nydn.us/1vA4dvK.

Wholesome or not, much the same as manga and anime, ramen is one of those compelling aspects of Japanese culture that has successfully undergone the transplant overseas. Instant ramen for example is now consumed in far greater quantities abroad than it is in Japan, and there are probably 3-4 times more instant ramen producers abroad than there are here in Japan. Due to its ubiquity, we have often wondered how much ramen is consumed around the world. There are some reliable numbers on instant ramen, from its inventor Nisshin, but very little hard data on all the other forms. So we thought it would be fun to do some extrapolation of our own.

Non-instant ramen
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* No. of ramen restaurants in Japan: No one really knows, since ramen restaurants have a low hurdle to start up, and seemingly go out of business just as easily. But one reliable and relatively complete source of restaurant numbers is the nation's largest directory for restaurants, Gurunavi. According to their website (www.gnavi.co.jp), there were 49,346 listings Japan-wide as of today, of which 9,147 are in Tokyo (i.e., doesn't include Kanagawa, Saitama, or Chiba).

* No. of ramen restaurants in the world (outside Japan): Yeah, this is much harder and would have to be a wild guess. But based on "ramen" being the familiar Japanese form of noodles and so excluding all the local variants in China and SE Asia, then we would guess that there are somewhere between 30,000-50,000 restaurants around the world. We say this because Yelp tells us that most major cities in North America and Europe have 100-1,000 restaurants each, and we imagine ASEAN and North Asian countries (ex-China) would be similar. There are about 100 cities in these regions populated by more than 1m inhabitants, so that's roughly 200 restaurants x 100 cities = 20,000, then double that for all the smaller locations. Since Japan's top 5 ramen restaurants internationally only have around 1,500 outlets between them, we guess that most all the world's ramen shops are being run by small independent operators.

* Average ramen serving: Depends on where you eat, but on average the average serving in Tokyo is between 150-200gms. Some outlets serve ramen mountains up to 600gm, and many restaurants allow customers to reorder just the noodles only to have a second helping.

* Number of meals served a day in Japan: If you take the average ramen restaurant with 10-20 seats, they are probably serving between 50-100 customers a day. Obviously some do dramatically more while others less. But if we take 50 customers a day as a reasonable average, then Japan serves up about 2.5m bowls of ramen a day.

* Volume of ramen consumed annually in Japan. If you take 50,000 stores x 50 customers x 200gm x 365 days = 180,000 tons of ramen a year.

Instant ramen
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Then of course there is instant ramen, invented by Momofuku Ando, the founder of Nisshin Foods and today the world's largest producer of instant noodle products.

* According to the World Instant Noodles Association (don't laugh, there really is such an organization), the international instant noodle market in 2013 grew about 2.5%, to about 105.6bn servings.

* Of the main consuming countries, China was top in sheer volume, with 46.2bn meals, followed by Indonesia (14.9bn), Japan (5.52bn), Vietnam (5.2bn), India (4.98bn), USA (4.35bn), and South Korea (3.63bn).

* Perhaps surprisingly, although at 7th place in global consumption, South Korea had the highest per capita intake, at 69 meals annually. In comparison, the Japanese eat around 46 ramen servings annually.

You would think that Nissin Foods, as the inventor of instant ramen would have a stranglehold on the market. But in fact the company owns surprisingly little of the international market. Most likely this has been a function of its slow and cautious approach in setting up production and marketing units abroad, especially in emerging markets where demand for instant ramen has boomed because it is so cost-efficient. The company's annual report last year shows that only 13.4% of sales were to international markets, and in fact, this number dropped 0.6% over the previous year. Clearly Nisshin needs to try a bit harder.

Instead, its noodles in the international market are getting eaten by other Japanese firms (Sanyo's Sapporo Ichiban and Toyo Suisan's Maruchan), European firms such as Nestle's Maggi brand, Chinese players with local brands, and Korean firms. For example, in Mongolia, a market that is growing rapidly, 40% market share is held by Korea's Nongshim Co. The firm reckons that advertising, shop displays, and shopper tasting events have all been integral parts of their winning strategy.

Yup, hungry shoppers at the mall and plenty of fragrant steaming ramen tasting samples -- sounds like a winning marketing strategy to us.

Concern about ongoing GDP contraction
Although this news item from the Economist is a couple of weeks old, the commentary has been mentioned in so many follow-up stories by other media, that we thought we should run the original. Basically the Economist is asking whether the ongoing contraction in GDP jives with the optimism that the Abe government is still showing for its reflation strategy. Although economists expected the first quarter after the consumption tax increase to be bad, they were hopeful that things would have turned around by now. Instead, the economy is still in reverse, largely as a result of shrinking real wages. Analysts are now openly concerned that Abenomics may not be able to cause the trickle down that was hoped for, and instead of recirculating corporate profits, consumers in general will simply reduce spending. (Source: TT commentary from Economist.com, Aug 16, 2014) - http://econ.st/1pgy9EH

Japanese woman wins world Air Guitar contest
We've never really figured out what the attraction of air guitar performances is, let alone the incentive to hold and/or attend an international contest dedicated to pretending to play a guitar. But some people obviously like it enough that they will watch and thereby draw in the sponsors. The 19th Air Guitar World Championships in Oulu, Finland took place a couple of days ago and the winner was a 19-year old Japanese woman named Nanami Nagura. She apparently took the trophy for her stage athleticism and theatrics, which we think would have looked just as good if she'd had ice skates on. ***Ed: We have included a youtube.com clip that shows one of her performances -- a bit noisy for the office, so turn the sound down.** (Source: TT commentary from dw.de and youtube.com, Aug 30, 2014) - http://bit.ly/VZwIDk (news link) http://bit.ly/1uenA9O (Youtube link)

Chinese are the top spending tourists
The Japan Tourism Agency (JTA) has released a Q2 survey of 6,600 tourists. In the period April-June this year, the average Chinese visitor spent JPY130,293 over and above their travel costs, versus an average spend of JPY54,900 by all other nationalities. Thais were the next biggest spenders, at JPY59,279 per head, then Vietnamese at JPY58,726. In contrast Americans spent just JPY29,425 each. ***Ed: The reason, we believe, is because the average Chinese visitor is buying goodies for family and friends at home, and therefore is more likely to be buying high-end electronics, fashion goods, and health-care products in multiple unit quantities.** - http://bit.ly/1lpuPMt

Amazon duking it out with local publishers
Following similar controversy in the USA and Europe, Amazon is now the center of complaints by a group of Japanese publishers who claim that the company is strong-arming them over commissions and contract terms. At the center of the dispute is Amazon's new rules which rank publishers and the exposure they get, using a 4-point system. Abroad, Amazon has been accused of delaying book releases and boycotting authors managed by publishers in dispute with the firm. ***Ed: That kind of monopolist behavior will cause unholy hell here in Japan, where publishers really know how to curry public support. Amazon needs to be careful it doesn't get impaled by a law suit or consumer boycott over unfair business practices.** (Source: TT commentary from businessinsider.com, Aug 29, 2014) - http://read.bi/1lpuPfg

Tax man chippeth away
Now that we are entering a period of unprecedented fiscal risk-taking by the government, it is only natural that the Finance Ministry will find ways to claw back more tax. The latest scheme, which thankfully currently only targets large companies, is to reduce tax carry forwards from the current 80% to 60%. The government figures that tax carry forwards for all companies cost it about JPY2trn in lost income each year, so the new rate will yield somewhere around JPY300bn additional tax. As a sop, the government will at the same time extend the tax carry forward period beyond the current 9 years. (Source: TT commentary from asia.nikkei.com, Aug 30, 2014) - http://s.nikkei.com/1zYRqAF

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That was Terrie's Take.

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Terrie's Take - AkihabaraNews.com

Terrie’s Take is a selection of Japan-centric news collected and collated 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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