Kagome

Oct. 23, 2013
Japan-Netherlands Smart Agri Seminar
Making Vegetable Production a Growth Industry
1. Outline of Kagome’s fresh vegetables business
2. Achieving growth industry status through
vegetable farming complexes
3. Cooperative sales and Asia market development
Kagome Co., Ltd., Granpa Co., Ltd.
Japanese are among the world’s leading consumers of processed
tomatoes, while consumption of fresh tomatoes remains sluggish
World tomato production
Fresh 90 million t = 14 kg/person
and per-capita consumption Processed 40 million t = 6 kg/person
(6.5 billion people)
Total 130 million t = 20 kg/person
Russia
15.0
Italy
27.6
China
21.0
France
9.8
UK
8.3
US
9.2
S . Korea
8.5
Japan
4.8
India
7.7
World tomato production
(fresh + processed: 10,000 t/year)
Japan
China
Mexico
10.5
Brazil
8.5
Japan’s tomato shipments
S hipments
(10,000 t)
Crop are a
(Ha)
Leading 20
nations
Total
proce ssed
Total
proce ssed
1987
84
662
55,092
1990
14,200
1,060
65.9
7.6
1997
78
1,637
73,494
2000
13,600
910
70.9
6.5
2007
75
3,360
111,328
2010
12,300
380
61.2
2.7
Source: FAO data
Source: MAFF shipment statistics
Japan consumes 620,000 t (4.8 kg/person) of fresh tomatoes and 720,000 t (5.8 kg/person) of
processed tomatoes, including imports
Kagome Tomato Discoveries  Aiming to increase Japanese tomato consumption to 20 kg/person!
A Procurement Network Made Up of Large-Scale Vegetable Farms
and Fresh Produce Centers
Four largest producing regions in Japan
Chitose Farm
4.0 Ha
Nine large-scale vegetable farms
General contracted farms (30 farms)
Seven fresh produce centers
Nationwide tomato
production (2006)
Total land area 13,000 Ha
Greenhouse land area
8,000 Ha
Fertigation
500 Ha
Shipments
650,000 t
Azumino Vegetable Farm
5.0 Ha
Sera Vegetable Farm
8.5 Ha
Iwaki Onahama Vegetable Farm
10.2 Ha
Hibikinada Vegetable Farm
8.7 Ha
Minori Vegetable Farm
1.3 Ha
Kada Vegetable Farm
5.2 Ha
Shimanto Mihara Vegetable Farm
2.7 Ha
Yamada Midori Vegetable Farm
3.0 Ha
Positioning of Kagome’s Fresh Tomato Products
(1) Kokumi Tomato
(2) Variety Tomato
(3) Delica Tomato
High-lycopene
High priced
(high quality, high
sugar content)
JPY600
High-sugarcontent
tomatoes
Plum
S nack tomatoes
Round bunch
Medium bunch
Mini-tomatoes
Momotaro
S old in packs
Round
Vegetables
(Side dishes)
(Cooking)
Kids’ cherry
Medium
tomatoes
Sugar content 10
Sugar content 3
Cooking
tomatoes
Fruit
(dessert)
Three main characteristics of Kagome tomatoes
S mall boxes
Tasty type
Momotaro
S old loose
Firm type
JPY100
(1) Rich in lycopene
 Removes active oxygen
(2) Delicious base
 Rich in glutamic acid
(3) Firm texture
 Suitable for cooking
Regular priced
(Casual)
Local
packing
Farm
Establishing farm
Shipping
Delivery
inspection
Fresh produce
center
Sorting
FREST System
Monthly/weekly/
daily ordering
Delivery
Ordering
Field service
Field person
Production plans
Selecting
varieties
Selecting
varieties
Mass
merchandisers
Co-ops
Stores
Joint
purchasing
Me nu proposals
PO P support
Product display
planning
Proposing events
Crossme rchandising
52-week
Business plans
Purchase
of entire
volume
HR
development
Fruit and
vegetables center
Logistics
Consumers, union
members
Uniform Flow of Products, Prices, and Information from Farm to
Store
Merchandising
support
Store staff
Product
plans
Sales plans
Demand
forecasts
Salespersons
plans
HQ
Restaurant users
Venders
Requires human resources able to make judgments in response to weekly/daily volume fluctuations (in the company, at competitors,
and in the market). (Computer systems cannot resolve this.)
Typical Vegetable Production in Japan (2010)
Item
Crop area
Shipping unit
Shipping
volume
Unit
Ha
Kg/sq. m
t/yr.
Retail price
JPY/Kｇ
Wholesale
price
JPY100
million/yr.
Home
consumption
kg/yr.·
person
Household
consumption
t/yr.
Processing/
commercial
Leeks
Lettuce
Spinach
Tomatoes
Strawbe rries
Cucumber
12,000
6,000
11,700
23,100
20,800
21,800
5.2
2.8
4.3
1.6
2.5
1.0
624,000
168,000
503,000
370,000
510,000
218,000
350
1,000
280
310
200
430
2,180
1,680
1,380
1,140
1,020
950
3.7
1.0
2.6
1.7
1.9
1.2
480,000
130,000
338,000
221,000
247,000
156,000
23%
23%
33%
40%
52%
28%
Vegetable Farming Complex Plans to Accelerate
Industry Growth
Long-terrace
tomato cultivation
Dome vegetable plant
factory
Long-terrace bell
pepper production
Elevated bed
strawberry production
NFT leaf-vegetable
cultivation
Cucumber fertigation
Realizing year-round supply and stable management through concentration on five
growing facilities with advanced environmental controls nationwide.
Use of New Energy in Vegetable Growing Facilities
Overseas
Auxiliary LED lighting
between trees
(Japan)
Greenhouses fitted
with solar panels
(France)
Trigeneration using CHP
(Netherlands)
Rotating Cultivation of Leafy Vegetables in
an Airdome Space
70 domes in use or
under construction
across Japan
（2013）
Business/capital partners

Area inundated by tsunami in
Great East Japan earthquake
Affected Coastal Farmland in Three Tohoku
Prefectures Damaged by Tsunami
M ap sh o ws areas n o rth o f the
F u k u sh ima Daiich i Nu clear
P o wer P lan t.
Names o f mu n icip alities are n ot
u p to d ate.
Areas in u n d ated o n th e Pacific
sid e o f th e To h o ku regio n are
sh o wn o n
th e web site b elo w.
Extent of
inundation
S o u rce: Geo sp atial
In fo rmatio n Au th o rity of
Jap an
Large-scale farming
complex planned
in Hamadagawa
Rikuzentakata
Agri-Frontier project planned
in eastern Sendai
Sendai Plain
Se ndai
Natori
Iwanuma
Watari
Yamamoto
Damaged
Ha
Rice
fields
Vegetable
fields
Iwate Pref.
1,172
666
Miyagi Pref.
12,685
2,317
Fukushima
Pref.
5,588
335
Fukushima agricultural
recovery project planned
in Kashima and
Haramachi
Minamisoma
Michisaki, which has Provided Support for
Earthquake Recovery, Prepares to Begin Operation
Name
Address
Michisaki Co., Ltd.
63 Aza Hosogawa, Gamo, Miyagino-ku, Sendai, Miyagi Pref.
983-0002
Representative Mamoru Kikuchi, Representative Director
Founded
July 3, 2012
Capital
JPY17 million
Employees
20
Lines of business Production of agricultural produce using fertigation
Processing and sale of agricultural produce (cutting plant)
Main produce
Strawberries, tomatoes, spinach, leaf lettuce
Production area 27,000 sq. m
Total investment JPY1.3 billion
Recovery subsidies JPY900 million
Agriculture Involves Higher Risks than Other Industries’
(Particularly Regarding Sales and Supply/Demand)
• Business risks due to changes in international
conditions
Rapid increase in low-priced imported vegetables,
rising energy prices
• Operating risks of managing large-scale
facilities
Lower than expected yields, collapse of facilities,
outbreaks of agricultural pests
年実 al
績 p rice
2 0 0 606 actu
2 0 0 707 actu
年実 al
績 p rice
2 0 0 808 p年u調rch
達 ase
2 0 0 808 actu
年実 al
績 p rice
2 0 0 909 cu
mu上lativ e
年積
• Demand/Supply, and Competitive Risks in Sales
Home
家庭用全国（実箱/週）
us e nationwide (Actual box/week)
Supply < sales: Loss of sales opportunities, penalties
Supply > sales: Losses on disposal of products,
clearance sales
Price competition with farmers in producing areas,
entry of other firms and PB
Week 6 Week
1週
週
1 1Week
週
1 Week
6週
2Week
1週
1
6
11
16
21
2Week
6週
26
Week
3
1週
31
Week
3
6週
36
Week
4 1週
41
Week
4 6週
46
Week
5 1週
51
Responding to Changes and Growing Demand through
Nationwide Cooperation
4,000
3,500
2004
high
0 4高値
2005
high
0
5高値
2006
high
0 6高値
2007
high
0
7高値
2008
high
0 8高値
2009
high
0
9高値
Tokyo market
東京
市場高値
high
prices
3,000
2,500
2,000
1,500
1,000
500
0
１週
Week 1 ６週
Week 6 １１週
Week 11 １６週
Week 16 ２
Week
１週21 Week
２６週26 Week
３１ 週31 Week
３６週36 Week
４１週41 Week
４６週46 Week
５１ 週
51
A nationwide produce distribution group is forming!
EIGHT CO-OPERATIVE
BUYING CO.,LTD
M aruka-sapporoseika
Tokyo Tama Seika
Osaka Daika
Tokyo Seika
Yokohama M arunaka Seika
Fukuoka Dydo Seika
Tokyo Senju Seika
M eika
The goal is to cooperate to create demand for domestic vegetables by establishing promotion
councils for individual types of produce and aiming to industrialize vegetable farming
through means such as mutual assistance among producer corporations, logistics cooperation,
development of a “sixth industry” (primary * secondary * tertiary), and sales support.
Outline of Tomato Production by
Region and Varieties in China
Top five tomato producers
2006
Pink tomatoes are preferred in
the north, red in the south
Climate, culture, history, . . .?
10,000 t
Hebei Prov.
555
Henan Prov.
510
Shandong Prov.
508
Xinjiang
Uyghur AR
490
Jiangsu Prov.
177
Source: China Agriculture Yearbook 2008
Pink 40%
Red 50%
Tomatoes for
processing
Red 100%
Heated greenhouses,
sunlit greenhouses
Temperate
Plastic tunnel culture
Highland
outdoor
Red 100%
cultivation
Pink 90%
Red 10%
Subtropical
Lowland outdoor cultivation
Red 100%
Tropical
Taking on the Challenges of Fresh Tomato Production
and Sale to the Upper Classes in China
China’s fresh tomato production leads
the world at more than 30 million t/year!
Heilongjiang
Jilin
Xinjiang
Uygur
ZIzhiqu
Liaoning
Inner Mongolia Beijing
Tianjin
Ningxia
Hebei
Shanxi
Shandong
Qinghai
Gansu
Henan
Shaanxi
Tibet
Jiangsu
Anhui
Sichuan
Hubei
Shanghai
Zhejiang
Chongqing
Jiangxi
Guizhou
Yunnan
Hunan
Guangxi
Made by Japanese
Fujian
Guangdong
Hainan
Organic delivery services
(Shanghai, Beijing, etc.)
Sunlit greenhouse
(winter)
Multi-span greenhouse
(summer)