agribusiness

Italy’s Valpolicella has no lack of young winemakers ready to continue its exports

We never know exactly where we will find the agriculture stories that can inspire new ways of looking at food chain challenges and common problems. Food value chains are both intensely local and also deeply entwined with global trends, meaning that insights from one country are very likely relevant to many others. We’ve seen fishery cooperatives in Tanzania struggling with the same data management problems we have seen in Japan’s green tea industry and exporters everywhere carefully watching global exchange rates.

This time the insights came from the green vineyards of Italy. Meros’ Ayako Kuroki recently visited Italy’s vibrant Valpolicella wine-producing region and found some interesting trends, and possibly lessons, for issues we see here in Japan.

Italy’s Valpolicella wines are produced mainly with Corvina, Rondinella and Morinara grapes.

Italy, with a population of 60 million, has half the population of Japan but faces similar demographics, with increasing urbanization and one of the lowest fertility rates in the world. In Japan’s case there is constant discussion about the aging population of farmers, the difficulty in attracting younger people into agriculture and the difficulty of developing value-added, export-oriented agricultural industries. And yet, Valpolicella has developed a wine industry that is 80% exports and boasts of no lack of younger farmers willing to succeed the regions’ numerous wineries.

Italy was the second largest wine exporter (by volume) after Spain in 2016. Veneto province, far in the north of the country, produces the largest volume of wine grapes and is the second largest wine-producing province in the country. Veneto is anchored by its capital Venice and also known for the historic city Verona, home of Romeo and Juliet. The Valpolicella region, north of Verona, is among the 24 DOC (Controlled Designation of Origin) wine-producing areas in Veneto; other DOC areas include Bardolino and Soave. The region is famous for its Amarone wine (DOCG), as well as Valpolicella and Valpolicella Ripasso wines (DOC).

While viticulture in the region dates back several thousand years, some of Valpolicella’s approximately 300, mostly family-owned, wineries are relatively new. This is because many grape farmers who used to sell grapes to wineries have gradually ventured into wine production, seeing that it is a more lucrative business. Wine making or agriculture/food processing in general is an attractive business in the area, with younger people entering the industry. This is partly driven by technological advancements which have made it easier and more attractive for younger people to take up agriculture as a career. As such, families in Valpolicella normally do not face the problem of finding a successor for their wine businesses.

Zanotti, one of the family-run wineries in the region, produces Valpolicella and, Valpolicella Ripasso wines (DOC) and Amarone (DOCG).

About 80% of the wine produced in the region is exported to Europe, Asia, and Latin America and some major brands reach the Japan market as well. However as one winery explained, “We are small wineries who don’t have the capacity for far away markets like Japan; we leave that to the big companies.” The wineries of Valpolicella have the advantage of neighboring the large wine-drinking market of the EU.

Valpolicella was a glimpse of a traditional industry that has been able to build sustainable exports to neighboring markets, integrate new technologies and continue to attract a new generation of winemakers. It will be interesting to compare this case to traditional growing areas on other developed countries who also aim to build exports and retain young farmers.

23 Jun

Meros shares green tea industry insights on NHK’s Biz Buzz Japan

Posted by Team Meros in News

Meros is back on this season’s Biz Buzz Japan on NHK World. This time Meros’ Global Markets director Lucia Vancura discusses the Japanese green tea industry and export marketing challenges with tea expert and certified tea instructor Oscar Brekell, and host Jon Kabira.

Green tea exports from Japan have doubled over the past decade to over 4000 MT, a bright spot for an industry whose domestic production has been falling. The domestic Japanese green tea industry faces an aging and shrinking population of tea farmers, as well as Japanese consumers who have endless choices of beverages

Exports of Japanese green tea were driven initially by the growth in sushi and Japanese restaurants overseas over the past decade. The healthy image of green tea with its high anti-oxidants also boosted its popularity. Top tea export markets for Japan are the US, Taiwan and the EU-tea processing hub, Germany. Not only green tea leaves and bottled tea, but matcha (green tea powder) also has become increasingly popular as a flavoring for desserts, from ice cream to cakes. Now fruit-flavored green tea beverages and green tea lattes can be seen in cafes and convenience stores across the world.

Green tea and black tea both come from the leaves of the same plant (camellia sinensis), but then undergo different processing. For Japanese green tea, the leaves are harvested three times a year, then quickly steamed, crushed and dried, retaining the green color and original fragrance. Many other countries, including China, Vietnam and Taiwan also produce green tea, but through a slightly different process that usually includes panfiring, rather than steaming the leaves. Due to the differences in processing, as well as the different climates and cultivars, tea leaves from different areas have distinctive flavors. Japanese green teas are often described as “grassy” and “mellow”.

Japanese green tea exporters face various challenges in international markets for various reasons, including low consumer familiarity with Japanese green tea, regulatory barriers related to agrochemical registration, as well as the high price and relatively low volumes available for export. In overseas markets, although green tea itself is increasingly common, there is often no reason for a bottled tea manufacturer or a lemon-flavored green tea product to use expensive Japanese green tea as a raw material. These manufacturers need large volumes of affordable green tea leaves. Cheaper tea leaves from China, South America or elsewhere are usually substituted.

The key for Japanese green tea producers, who are typically small family farms, is understanding the needs and interests of overseas consumers. What kind of packaging is attractive – dry leaves, bottles, or ready-to-drink tea bags? Do people buy tea at cafés or supermarkets? Inspiring people to become interested in the characteristic flavor of Japanese green tea, compared to other green teas, may be the best way to convince consumers to pay the higher prices that Japanese green tea requires.

This NHK BizBuzz episode discusses issues in the green tea industry and highlights some creative ventures in the domestic market to attract younger and new consumers. These include cold-brewed green tea packaged and served like high-end wine and flavored Japanese green tea.

The episode is broadcast on NHK World throughout June and is available online on demand until July 21^st. NHK World is available around the world on cable as well as streaming online.

16 Jun

Bees, Wines and Rice: Three Japanese Agtech Start-ups to Watch

Posted by Team Meros in Market Trends

At the recent Nikkei Ag/Sum Agritech Summit, Tokyo welcomed agtech and food tech start-ups from around the world to exhibit and present. However, some of the highlights were Japan’s own homegrown start-ups, who may have gotten less attention because less information was available in English.

In the global agtech universe, if you mention Japan, the immediate association is usually hydroponic vertical farming technology (called “plant factories” in Japanese) and robotics/drones. This is not surprising. Japan is a country where nearly 50% of the country lives in one of three densely packed metro areas (Tokyo-Yokahama, Osaka-Kobe-Kyoto and Nagoya). In rural areas, the number of farmers is dropping dramatically, farm land increasingly lies uncultivated and the average age of a Japanese farmer is 66. Japan’s food self-sufficiency rate is now less than 40%.

Japan’s tech, engineering, machinery and robotics industries have been increasingly active in agtech R&D, aiming for potential solutions to the hot button Japanese issues of decreasing farm production, aging farmers and food security. Hydroponic farming, led by names such as Spread and Mirai, and robotics and drones being developed by universities and research institutes as well as companies like Yamaha, Fujitsu or Panasonic, have received significant media attention.

But indoor farming and drones are far from the only agtech innovation in Japan. Below are three interesting Japanese start-ups that recently exhibited at Nikkei’s Ag/Sum Agritech Summit.

ad-dice Co., Ltd.’s Bee Sensing

Bee Sensing offers an IoT sensor device that allows bee keepers to remotely monitor bee health and activity. Through a smartphone app, beekeepers can check temperature, humidly and how active bees are as well as receive alerts and record memos. Bee hives are often placed in distant or remote areas, making it difficult for farmers to visit them every day. This IoT sensor system is expected to increase beekeeper productivity by freeing them from constant patrolling of distant beehives. It will also allow timely reactions to changes in bee health and decrease beekeeper worry about the health of their remote apiaries. It also creates honey production data records to share with customers who are increasingly interested in the differences in local honeys and their different tastes and colors.

Bee Sensing’s patented technology was a collaboration between Japanese IT company, ad-dice, founded by Daisuke Ito and featured as one of Toyo Keizai Magazine’s Top 100 Ventures That Will Change Japan in Feb 2017, and innovative beekeeper Hideki Matsubara from Hiroshima.

Bee sensing technology may be a niche industry within agtech but these emerging technologies can serve an extremely important industry. According to FAO statistics, honey production is around 1.2 million metric tons globally, mainly concentrated in China, North Eastern Europe and the US. It is a high value industry. For example, the US retail price of natural honey is around 5-7 US$/pound and bee by-products, like propolis, are even more expensive. In addition to those products, the bee industry itself is also creating extremely important economic value – pollination.

There are now number of bee hive remote monitoring technologies being developed around the world, from the UK, US and Bulgaria among others as interest in this high value agricultural industry increases.

Kisvin Science’s Sap Flow Sensor

Kisvin Science’s sap flow sensor was developed to support the grape-growing and wine making industry. Japan may be better known for its beer or sake, but Japan actually also has a significant wine industry, centered in Yamanashi prefecture. The sap flow sensors monitor grape stem heat and soil moisture.

Co-founder Kazuhiro Nishioka originally established a small sap flow sensor manufacturing company, Nissy Instruments, as a side-business when he was a PhD student. He then created Team Kisvin, an initiative with two wine grape farmers (Hitoshi Ikegawa of i-vines and Yasuhiro Ogihara founder of the Kisvin winery) to study and improve viticulture in Yamanashi. They have been using the with sap sensors to produce premium wine grapes now for 10 years ago.

With the increasing number of cooperative farms, they have released their own branded Kisvin wines. In 2015, Team Kisvin decided to found Kisvin Science in order to support other wine grape farmers and wineries around the world. Their first new market target is California.

There are several sap flow sensors in the market, but Kisvin Science feels its strength is its low cost achieved with cutting-edge printing technology, Nishioka and his team’s aggregate knowledge of plant physiology and its relationship to wine grape farming. His team is aiming to raise its next round of funding soon, and is considering whether to target Japanese or US funds.

Rice Technology Kawachi’s Rice Gel

Some of the best inventions are accidents. Dr. Junichi Sugiyama unintentionally developed a new food ingredient – a type of rice gel – when he was a senior researcher under the Ministry of Agriculture, Forestry and Fisheries. He found an innovative way to convert cooked rice into a gel-like paste which retains moisture well. Since retiring from the institute, Dr Sugiyama has dedicated his energy to commercializing this product, with the strong support from the local rice-growing community in Kawachi, Ibaraki, and leading agriculture machinery manufacturer Yanmar.

Dr Sugiyama’s rice gel is a smooth white paste, which can be produced in any level of solidity or density, depending on customer needs. The product is made only from rice and water, so it is free from major allergens.

This rice gel food technology addresses two major problems the food industry in Japan and overseas has found when using rice flour. First, rice flour has low absorption capacity for water, meaning most rice flour breads and cakes also have add wheat in order to improve moisture absorption. Second, rice flour usually is also more expensive than wheat or other flours, as rice production costs are high.

However the rice gel retains moisture, meaning bakers can eliminate wheat, which can be an allergen for some consumers. It has been particularly attractive to cake and confectionery bakers who aim for moist, fluffy creations.

In addition, Kawachi is able to produce for a competitive price, because they use rice which is high in amylose (a type of starch component that forms a solid gel at room temperature) which is a high yield type of rice. High amylose rice production for non-table rice can currently receive subsidies under the rice acreage reduction policy of the Japanese government which is helping Kawachi Rice Technology maintain lower costs than rice flour producers.

Full disclosure, Nikkei Ag/Sum event was not the first time Meros has encountered Kawachi rice gel. Last year Team Meros’ Lucia Vancura discussed the product as a panelist on NHK World’s Biz Buzz Japan when the gel was still in its R&D stage. This is why we were even more pleased to get an update from Dr Sugiyama and see his progress in commercializing this product. There is hope that this ingredient will have opportunities in the global baking industry, especially in the gluten free baking market, where rice flour is usually too expensive to use as the main substitute for wheat flour.