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Good morning Market Shakers!

Today marks our final post of the edible insect product cycle! Thank you for sticking with us as we explored the beehive of activity within the edible insect market today. We hope you’ve found it as ‘edi-flying’ as we have.

The last post features the voices of MUJI and MOG BUG, two companies taking different but equally interesting approaches to selling edible insect products in Japan. MUJI’s story shows how large retailers can successfully launch insect-based products. MOG BUG, on the other hand, offers a case study into how smaller players can build an edible insect business in the land of the rising sun. We also invited Mr. Takashi Fukushima, a GourmetPro consultant and sales specialist who is knowledgable about the edible insect market in Japan, to summarize the post.

Let’s burrow into how these two insect-based product pioneers are making big business from bugs in Japan.

MUJI

MUJI’s product launch bring insects to the mass market in Japan

In 2020, global retail company MUJI broke headlines in Japan when they released a cricket cracker on their online store. You’ll remember from our third post - it sold out in a matter of minutes, prompting MUJI to stock it in physical stores, and launch a follow up cricket chocolate bar one year later.

To hear the full story of MUJI’s successful insect-based product launches, we spoke with the public relations officer from MUJI’s PR & ESG Division.

N.B. MUJI’s public relations team have requested to remain anonymous.

Sustainability and tradition are at the heart of MUJI’s decision to launch edible insect based products.

The inspiration for MUJI to sell edible insect based products was the unlikely result of a new store opening in Finland in 2019.

We opened a new store in Finland in 2019. The staff who attended the opening brought back some cookies made from crickets. While insects have formed a part of the traditional Japanese diet in rural Japan, our team was unaware they were eaten in Europe at that time. We were curious about the similarities in food culture between Japan and Finland. As we researched, however, we realized Finland was making great progress in advancing insect-based foods due to their potential as a sustainable future food. We felt that there was an opportunity in Japan to develop a more sustainable food system, so we came up with the idea to launch our own cricket cracker to support this.

MUJI’s explanation offers an interesting insight into what influences Japanese consumers. Japanese cuisine is steeped in tradition, and consumers in Japan are generally intrigued by the history of their food. The fact that insects have been eaten in some parts of Japan in the past means consumers are likely curious about edible insects.

MUJI's cricket crackers | COURTESY OF MUJI

On the other hand, as we’ve seen during our consumer interviews, sustainability is not as strong a driver for consumers in Japan compared to overseas. So, MUJI used their product launch as an opportunity to raise awareness among Japanese consumers about edible insects and their sustainable benefits. They designed a dedicated page on their website featuring infographics explaining the ecological and health benefits of eating insects compared to livestock, in addition to information about what insects tend to taste like (“like shrimp”).

With awareness of the UN Sustainable Development Goals (SDGs) and ESG Management (Environment, Sustainability, Governance) rising in Japan, especially amongst younger people, it’s worthwhile for companies to invest in educating consumers about the sustainability of their products. According to MUJI, it’s younger consumers who their cricket products are most popular with so far.

MUJI aims to price their insect products in line with their food products

MUJI’s PR officer explained their pricing strategy when it came to insect based products was simple.

We aim to price insect based products inline with our other products. Our cricket chocolate bar is priced the same as our other chocolate bars, at a price of ¥190.

As we saw in our fourth post of the cycle, ensuring edible insect products are competitively priced is key for Japanese consumers to consider trying them. MUJI has shown that products incorporating insects can be just that.

MUJI's high protein cricket chocolate bar | COURTESY OF MUJI

One key aspect of keeping prices low is the cost of raw materials. MUJI developed their product in partnership with Gryllus, a Japanese cricket farming startup from Tokushima University. Many other producers in Japan, however, currently import cricket powders from South East Asia, which brings higher costs due to import fees. Fortunately, demand for insect-based raw materials such as cricket flours means the number of domestic producers like Gryllus is increasing in Japan. Gryllus reported that demand for their product outstrips supply tenfold. This is a sign that the edible insect market in Japan is growing, and with that, the price of raw materials is likely to fall as demand increases.

In the past, there have been those who didn’t take our business seriously, but large brands and corporations entering the market helps remove the stigma and improve the image of crickets.
Takahito Watanabe, CEO of Gryllus

MUJI focussed on flavor over fear when producing edible insect products

When we asked MUJI about consumer aversion to insect based foods, their response was pragmatic.

At MUJI we focus on developing products that taste great. It’s hard to argue with a product that tastes good, and we believe the same goes for insect based products.

Our Consumer Sound-bites post confirmed as much. For the consumers we interviewed, taste was a top priority for trying edible insect products. The ongoing popularity for MUJI’s insect products shows that their strategy works, especially since Japanese consumers have high expectations when it comes to quality; focussing on developing a great tasting product is an important first step.

MUJI are focussing on sustainable foods for the future

Our final question for MUJI’s PR Officer was about MUJI’s plans for bringing more edible insect products to the market.

We have no firm plans just yet, but we are interested in bringing a range of sustainable products to the market and will continue to research and develop accordingly.

MUJI’s story is a fascinating look into how to successfully bring insect-based products to the mass market in Japan. In summary, competitive pricing and leveraging the sustainable benefits of eating insects helped MUJI reach the broad range of consumers who flock to their stores and website, day in and day out. But, how can companies without a mass-market consumer base take on the challenge of selling edible insects in Japan?

Our next company offers an interesting case study to answer that very question.

MOG BUG

Why did you start selling edible insect based products?

Taking a different approach to MUJI, our next company, MOG BUG, sells insect based products via vending machines in Tokyo. The novel sales channel has earned attention from traditional and online media in Japan, enabling them to reach a wide range of consumers. We sat down with Sei Miyashita, MOG BUG’s branding director, to talk about their innovative approach to edible insect retail.

Though their channel is different, MOG BUG were inspired by the sustainable potential of edible insects, just like MUJI.

Our main business is operating a chain of restaurants called Kome to Circus. We opened our first restaurant 10 years ago which specialized in selling unique and rare menu items, like game meat. Because it fit with our image, we decided to try a chocolate coated inago tsukudane (grasshoppers simmered in soy sauce) for Valentines Day in 2015. The product was a big hit with our customers so we began offering different edible insect dishes in our restaurant.
Our motivation to invest in edible insects was really boosted in 2016 when we read the 2013 UN report on the potential of insects as a future protein source. It was a new take for us on a food type associated with tradition in Japan, which we suddenly saw as futuristic.
The popularity of edible insects with our customers and awareness of their sustainable benefits motivated us to start selling the products via vending machines.

Vending Machines make insect-based products more accessible

Japan is home to the largest number of vending machines in the world ― almost one for every 23 people, and anyone who has visited the country will have doubtless seen them dutifully standing by on almost every street.

For MOG BUG, the decision to sell their products via vending machines had several drivers, Sei tells us. Firstly, vending machines enabled MOG BUG to make their products accessible to customers even when their restaurant was closed. They currently operate two machines in Tokyo, one being in front of their restaurant in Shinjuku, a busy shopping area, and another being in Akihabara, a bustling commuter hub (though it is better known as a center for otaku culture).

MOG BUG develop a strong brand around their vending machines (Value Press)

In addition to being easily accessible to pedestrians, vending machines presented an interesting outlet to expand their customer base for edible insects at the time.

Our vending machines have a very cute design, featuring cartoon insects and colorful infographics. We chose this design to appeal specifically to young female consumers in their 20s because they are active on social media and would share their experience of our edible insect products with their networks.

Tying together MOG BUG’s strategy of targeting social media users is an active instagram account where they introduce their products. Employing creative sales channels and social media marketing has enabled MOG BUG to build a strong brand that is unique compared to other players in the edible insect space.

MOG BUG offers variety to appeal to a range of consumers

We have several suppliers for the products we sell in our vending machines. Firstly, we import products from overseas because customers in Japan are interested in trying new and exotic products.
We also source products from wholesalers in Japan. One example is TAKEO, whose cider drink we sell in our vending machines. At the moment, the number of edible insect makers in Japan is still low, so we need to source new products from overseas. We are always on the lookout for commercially viable products from abroad that will be popular with our customers.

Variety is the spice of vending machines for MOG BUG

We asked Sae to tell us about the best selling products in the vending machines.

We have 15 products in our vending machines. Our two most popular products are TAKEO’s cricket cidre and then whole roasted scorpions. The cidre is accessible to people who are trying insect-based products for the first time. The scorpions are novel and appeal to adventurous customers.
Interestingly, these two products fall on either end of the price spectrum. Ideally we try to price products in our vending machines so they can be bought with just one coin, ¥500. The cost of imported products means we need to sell some products like the scorpions at around ¥1500, however. So we predict more expensive products are being purchased by fans of insect based food who have tried it in our restaurants already.

MOG BUG’s case illustrates there is certainly demand in Japan for whole insects. When it comes to how to encourage first timers and people who are adverse to edible insects, Sae believes incorporating insects in products is the way forward.

In the case of our restaurant, our customers like items shaped like insects, but I think to reduce the feeling of unease, we need to sell incorporated products like pancake mix, cookies etc.
From a purely branding aspect, in Japan you see companies Englishizing products to make them ‘cool’ and more appealing to customers. For example, I’ve seen products that use the English word “cricket” instead of the Japanese, kōrogi.

MOG BUG are optimistic about the future of edible insect products in Japan.

When we started we never imagined insect-based products would be so popular. Now the market in Japan is expanding a lot. 100 yen stores are even selling edible insect goods these days. I think the market will grow more and insects may become a popular type of snack.

Due to the popularity of insect based products, MOG BUG are considering increasing the number of vending machines they operate in Tokyo according to Sae. They also want to leverage their restaurant business and start selling their own products via vending machines, in addition to the ones they import and buy from wholesalers.

Our restaurant business has been growing. Two years ago we opened a branch in a trendy department store in Shibuya, PARCO. The location has given us the chance to share edible insect dishes with the diverse range of customers who are visiting the department store. Our insect-based desserts have proven very popular with customers.

It’s certainly an exciting time for MOG BUG to be in the business of edible insects! They have built a successful insect-based business by using novel sales channels and strategic media channels to promote their brand and products.

Insight’s from GourmetPro’s Takashi Fukushima

Our two retailers offering edible insect products to the Japanese market have distinctive businesses and approaches, though they are united by a common motivation ― to promote sustainable proteins.

To help us digest the interviews, we sat down with Gourmet Pro consultant, Takashi Fukushima.

Introducing Takashi Fukushima

Takashi is a sales specialist who connects foreign clients with Japanese sogo shosha distributors. He is knowledgable about all things related to condiments and food additives, ranging from their situation in the Japanese market to their price and origin. As a sales specialist, Takashi is also an expert in social media marketing for brand and product awareness. He has had great success in importing things such as frozen vegetables and food additives from countries that had no prior experience in exporting their products to Japan, including China and Vietnam. Takashi is knowledgable about edible insect products thanks to his storied career in Japan’s F&B industry and a vast network of contacts.

Promoting health and sustainability benefits of edible insects are key for entering the Japan market

To put things in perspective - the edible insect market is definitely growing in popularity in Japan, but the market is still lagging to that of Europe’s and the U.S.’s by about five years.
For the time being, edible insect producers in Japan need to focus on promoting the health benefits of edible insects, such as their high protein content, as well as their sustainable potential.

Both MUJI and MOG BUG do just this with their physical and digital promotional materials. While edible insects are still finding a place in the market, the importance of educating consumers cannot be overstated. The rise of insect-based products is strongly linked to the need for healthier, more sustainable alternatives to livestock based produce. Helping Japanese consumers to understand this is the first step in getting them to try the products, and it is a timely approach because the pandemic has made consumers more health conscious.

Like MUJI did with their cricket chocolate bar, there’s a great opportunity to hook Japanese consumers by focussing on insects as a high protein food. In this way, I think two of the highest potential demographics to become consumers of insect-based products are the young and the elderly. These two groups need a lot of nutritious foods, and edible insects are just that.

Like we discussed in our previous interviews with FUTURENAUT and Ynsect, the high protein content of insects presents an opportunity in the Japanese market as well. There is growing awareness in Japan about the importance of protein for a healthy diet, so consumers can likely get onboard with eating insect-based food from that perspective.

Given Takashi’s experience working with Japanese sogo-shousha trading houses, and his expertise in marketing, we asked what he would recommend for companies looking for partnership and investment to bring their insect-based products to the Japan market.

Japanese trading houses and large Japanese companies are always looking for new partnerships and investments. Much like MOG BUG do, strong, visually appealing online branding is essential to catch their eye. Companies should make their vision clear through good product visuals. Trading companies are also focussing heavily on sustainable investments at the moment because these create a positive image for their own investors.

That’s a wrap!

And on that note, our edible insect cycle comes to a close. We’d like to say a huge thank you to MUJI and MOG BUG for taking the time to interview with us and for sharing their insights about the edible insect market in Japan.

While we’ll miss writing about the world of insect-based foods, we already have butterflies in our stomachs for the next exciting cycle of Market Shake!

Don’t forget, next week we will take a break from our regular publishing schedule. Instead we have a light bite of an issue for you, so keep your antenna tuned in to your inboxes. We’ll see you next Tuesday.

*These interviews have been translated from Japanese and summarized for the sake of clarity.

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