Inside Angel Farm Fukui (photos via Nikkei)

Imagine going to the latest Ginza flagship store of an up-and-coming brand flagged as the “new Uniqlo”. You have to wait, as there’s a line of consumers around the block, hungry to get a piece of the latest trend. Inside, it’s a minimalist space, with light techno music. Produce is stacked up to the ceilings in cool white units. Literally cool, that is – these units are refrigerated. And what they’re chilling isn’t clothes but the latest must-have item: designer lettuce.

A taste of what may be the future already exists in Chiba Prefecture, east of Tokyo, at an award-winning produce store called Green Flavor. It sells vegetables grown in a “plant factory” located upstairs in the same nondescript apartment building. The plant factory is operated by Mirai Co. Ltd. and its 37-year-old founder, Shigeharu Shimamura. He calls his firm an “agricultural software company”.

Plant factories are slowly spreading in Japan, with support from the government. Vegetables are produced indoors and under controlled conditions. Lighting, temperature, humidity, carbon dioxide and water are all measured constantly to ensure stable production. For example, lettuce can be cropped twenty times a year.

Because the produce is grown in a clean room, it can be eaten without washing. That’s potentially attractive to consumers who want safe foods and restaurants that need to guarantee quality. The factories eliminate the need for physical labor in the countryside, so may create new jobs for young people in cities, according to the government.

Ozu Corp., a maker of traditional Japanese paper known as washi, turned its unused Tokyo warehouses into plant factories in 2008 in response to consumer concerns about unsafe food. The brand is called Nihonbashi Vegetables, after the central-Tokyo location of the company’s headquarters, where it plans to open another plant factory.

Another manufacturer, Fairy Angel Inc., has its main plant factory in Fukui Prefecture and others in Kyoto and Chiba. The Fukui factory’s temperature is controlled to +25°C by day and +18°C by night and is capable of producing three million plants a year, according to the Nikkei. Many factories are starting to use LEDs instead of fluorescent lighting to lower costs.

"Green room" veggies can go direct to the shelves

Mirai, which consulted on the Ozu project, says it receives 100 inquiries a month about the “green room” concept, including many from the Middle East and Africa. The government provided financial support for plant factories as part of its New Economic Growth Strategy in September 2008, and has pledged more as part of the so-called “Green New Deal”. However, concerns remain.

Plant factories consumer high levels of artificial energy compared with natural farming methods, raising the price of the produce, as well as questions about the net cost to the environment. When grown naturally, vegetables are a vital element of the food chain. The implications of their widespread removal from the natural environment are also yet to be measured.

This article was compiled using information supplied by the Japan Foreign Press Center.

For more of Five by Fifty’s consumer insights on “Part Time Greens”, contact us.

“What’s different this time is that consumers aren’t simply looking only for low prices, they’re being more selective and hunting for higher quality and more fashionable products,” according to economist Teruhiko Mano. And analysis of Internet search data bears this out.

A review of keywords that experienced a surge on Yahoo! Japan in May leads to several sites that allow people to save on normally high-price items. (Of course, flu fears and the usual celebrity and sports news also featured heavily.)

Searches soared for “5.5 million yen house,” a keyword used by real estate agency Aqura Home for a new service offering made-to-order houses for 5.5 million yen, around US$55,000.

In mid-May, there was a huge volume of searches for sisyokukai.jp a new service that promotes new restaurants. Users receive discounts of 50-80% for meals in exchange for providing feedback to the restaurants, who are trying to perfect their service.

This week, there has been a large number of searches for “kane no tamago service,” which introduces consumers to apprentice nail artists and hairdressers, who provide manicures and cuts for large discounts or even free.

One luxury item that did enjoy increased search interest was the Segway, as the transport device is rumored to soon become legal on the streets of Yokohama.

Students at the ABC Cooking School in Marunouchi.

As we previously reported, the fact that men are behaving more like women makes them an increasingly attractive target for product developers and marketers, and some multinational corporations are responding accordingly. This shift is happening around the world, but especially in Japan, as well as South Korea and Greater China.

Here are some more examples of the shift in action in Japan, offering inspiration for other markets:

ABC Cooking Schools, with locations around Japan, is training an army of amateur chefs. Until two years ago, they only accepted female students. As the Baby Boomer generation began retiring, the competition began offering men-only classes for retirees. ABC took the step of starting co-ed classes at locations with a high density of corporate workers, such as Ginza and Marunouchi. The number of male students has quickly risen to around 600 at the schools.

Another service associated with women that has begun to patronized by men can be found at the 48 nail salons throughout Japan operated by Nail Quick. The number of male customers has risen to the level that the salons now offer a “men’s course” costing 2,940 JPY, and including disinfecting the hands, removing cuticles, and applying clear or colored polish.

One of more surprising hit products comes from underwear maker Wishroom, which has unveiled a men’s bra, which quickly became a top seller on the online shopping site Rakuten. The Wishroom store on the site claims the bra can give men a “calm, relaxed feeling”.

Click here for more insights on shifts in male behavior or ask for a sample report.

Time to reward yourself with that new 24-inch iMac?

Recession fatigue is starting to show in the United States, where consumers are rewarding themselves by “trading up” items that play an important role in their daily lives, according to Boston Consulting Group (reported by WWD). In fact, marketers interested in this trend need only look to Japan to see how an extended downturn can actually boost sales of high-quality daily necessities.

The top ten list of “trade-up” items for the U.S. is dominated by what most people would consider 21st Century home necessities. No. 1 is the personal computer, and household electronics like home entertainment (5), kitchen appliances (8) and washers and dryers (9) also feature. At No. 2 is fresh fruits and vegetables, reflecting wellness trends as well as the basic importance of food, with other entries being meat (4), sit-down restaurants (7) and fish and seafood (10). The other entries are bedding (3) and automobiles (6). With the exception of restaurants, the list clearly shows the items consumers will start spending on first will be things that improve their daily lives and personal space.

A prolongued period of low growth in Japan bred innovation in small-ticket items, as consumers recalibrated their spending patterns

The changes in spending by Japanese a decade ago reflected their different priorities, with more emphasis on fashion (which doesn’t make Boston’s U.S. Top 10) and personal computers (mobile phones were always more useful here). However, the shifts in demand were similarly focused on improving consumers’ daily lives and, in the process, contributed to world-leading innovation in everything from functional home electronics and B2C mobile commerce to beverage flavors and cigarette packaging.

Contact us for details of ethnographic research and innovation programs to help your business anticipate consumers’ changing priorities.

Products such as this home grill kit are currently selling well in Japan.

At a time when retail sales in many sectors are falling, one area in which sales are actually rising is items that can be used for do-it-yourself activities at home. It seems that Japanese consumers are increasingly opting not to go out, but rather stay at home to practice self-enriching hobbies such as cooking with the family, making clothing, or growing food.

This home shiitake mushroom growing kit has become a surprise hit product.

Consumers are saving money by eating out less, but are also investing in near professional-grade kitchen tools, such as rice milling machines, high-tech rice cookers, fondue sets, and pressure cookers.  Kitchen appliance manufacturer Iwatani reports that sales in the last quarter of 2008 increased by 43% in the niche of home grills to make fried octopus and skewered chicken, foods which are usually available at outdoor food stands. Another hit product is a kit that allows users to grow shiitake mushrooms at home, suggesting that consumers want to have fun in the kitchen.

Other products that have been doing well, such as electric hair clippers, hair irons, and hair dyes seem to indicate consumers are giving up trips to the hair salon in favor of doing the job themselves at home. There is also a strong sense of self-improvement with this brand of at-home consumerism. One of the hit products of late 2008-early 2009 is the “Core Rhythms” series of exercise DVDs, which incorporate moves from Latin dancing into at-home work outs.

A recent campaign by Suntory matches six malt whiskies with six specially made chocolates.

“The French use the word mariage to mean pairing,” explains chef and author Clotilde Dusoulier. “It is used in the case of food and wine (mariages mets et vins), and also between two ingredients (le chocolat se marie bien avec les fruits rouges – “chocolate goes well with red berries)”. In the past two years mariage has appeared in the Japanese lexicon, refering to alcohol match with a complementary sweet, most often chocolate.

Corona beer is now comes with a gift piece of chocolate.

For its current “Malt and Chocolate” campaign, whiskey maker Suntory collaborated with famed chocolatiers in Tokyo to pair six malt whiskeys with six chocolates. Glenfiddich, which Suntory imports to Japan, has been matched with a citrus chocolate, and Suntory’s own 12-year Hakushu is paired with green tea chocolate. The chocolates are not sold with the whiskeys, and are only available at the chocolatiers that produce them, so mariage fans would have to travel to six different locations to sample the full range.

Continuing the mariage trend, Nippon Beer, which imports Corona beer to Japan, is now attaching a piece of bitter, 79% cacao chocolate to Corona bottles available at convenience stores and liquor stores.

In the video game Like a Dragon 3, characters eat ramen to gain strength.

Instant noodle manufacturer Ace Cook is promoting its new product through as tie up with the popular Sega video game “Like a Dragon 3″ (sold in North America as “Yakuza 3″). In the video game, players eat ramen noodles to gain strength before battling opponents.  Ace Cook’s new product is named after a fictitious ramen restaurant that appears in the game. Although the shop does not actually exist, a special section on the Ace Cook website features a map, menu, and reviews.

McDonald's Premium Roast Coffee sells for less than half the price of Starbucks.

McDonald’s Japan is experiencing brisk sales of its “Premium Roast Coffee.” The coffee is made from South American beans, and packaged in a sleekly designed cup with a black lid.

The launch was prompted by research showed that while coffee had mainly been ordered as a side item for meals at McDonald’s, in recent years more customers have been coming to McDonald’s only for coffee. To launch the product, new standardized coffee machines were installed in all locations, to insure that consumers had the same taste experience at all shops.

Premium Roast Coffee went on sale in February 2008, for 100 yen, and the price was raised to 120 yen in August of that year. A short size coffee at Starbucks, by comparison, costs 290 yen. 160 million cups of McDonald’s Premium Roast Coffee were sold by the end of 2008.

Perfect Plus, a new line of high protein diet goods from Meiji.

Meiji Seika and has released “Perfect Plus,” a line of high-protein diet goods, including shakes, drinkable jelly, bars, and biscuits. The products are presented as “a diet that won’t leave you feeling hungry,” and contain extra amounts of nutrients that people usually don’t get enough of while dieting.

The line includes “Breakfast at Your Desk” bars, in cheese and honey-on-toast flavors. For lunch or dinner, there are five shakes to choose from, which contain 10 to 11 grams of protein and around 80 calories each. And for between-meal snacks, there are three flavors of drinkable jelly, which are high in amino acids and minerals, as well as diet biscuits.

A package of 15 Pefect Plus shake mixes retails for 3,333 yen ($36). Packages of 30 and 60 shake mixes are available through Meiji Seika’s website.

Integrated diet product lines have long been available in Japan via mail order catalogs and online shops. The Perfect Plus diet items are the first to be sold at supermarkets and some conveniences stores and therefore alongside regular food and beverage products. With consumers’ interest in nutrition and dieting set to continue to grow, more specialist products might be making this leap from niche to mainstream retail outlets in the future.

Learn more:
Other Meji Products
Meiji Official Site (Japanese)
Protein Plus Site (Japanese)

Snack maker Kabaya has released Orangette, chocolates featuring orange peel soaked in orange liquor and French brandy and then dipped in bitter chocolate.

Learn more:
Other Kabaya Products
KabayaOfficial Site (Japanese)