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Japan a promising market for North American watermelon

by Tad Thompson | April 13, 2009
Watermelon consumption is at its highest level in 50 years, watermelon prices are higher than ever, and the trade has nothing but good things to say about the effectiveness of the staff of the Orlando, FL-based National Watermelon Promotion Board.

But the benefits of hiring experienced representatives will become further evidenced this summer, as a volume of watermelons will very likely be exported for the first time to Japan.

Gordon Hunt, NWPB's director of marketing, spent the last full week of March in Japan with NWPB shipper-members Brent Harrison and Dan Van Groningen. The trio was working to open the Japanese market for North American watermelons. Mr. Van Groningen is the vice president of Van Groningen & Sons Inc., based in Manteca, CA. Mr. Harrison is president of Al Harrison Produce Co. Distributors Inc., based in Nogales, AZ.

Mr. Hunt told The Produce News April 2 that the first refrigerated containers of watermelons may leave a California port for Japan as soon as this June.

Working to the trio's advantage was Mr. Hunt's education and previous experience. At Princeton, Mr. Hunt learned to speak Japanese. Later, for the Lakeland-based Florida Department of Citrus, he introduced Florida grapefruit to Japan. Mr. Hunt previously indicated that, today, "There are 100 million Japanese eating more Florida grapefruit than 300 million Americans, and the Japanese are paying twice the price."

About 5 percent of the U.S. watermelon crop is exported to Canada, which is essentially the only foreign market.

The NWPB has used federal export development funds to build the Canadian market, but Mr. Hunt noted that those funds are meant to build, not simply sustain markets.

Mr. Hunt said that watermelons have a 21-day shelf life. So, when plotting a strategy to build watermelon exports, he drew lines to include markets that have a two-week transportation route. He allotted a week to distribute within a foreign market and consume the melons while they were still in good condition. The United Kingdom, Japan and Mexico emerged as likely good markets.

Last year, U.S.-grown watermelons were exported to Mexico for the first time. There is a "counterintuitive" irony because Mexico provides more watermelons for the U.S. market than any one individual state, he said. "We didn't realize there is a time they have no production, and watermelon is an integral part of their diets." Mr. Hunt met with Mexican retailers, who agreed to start a watermelon import program in the summer months of 2008.

Because of shelf-life concerns, fruit destined for trans-Atlantic or trans- Pacific markets must be grown relatively near those respective coasts to minimize transportation time. "If you are exporting to Japan, there is a tremendous reefer container service" to the United States with economical backhaul rates -- of $3,000 per container -- to take products to Japan from the U.S. Pacific coast. "It hadn't been done because no one had focused on that market." At least not for watermelons.

Mr. Hunt added, "The yen is very strong, so it looks even better from our standpoint."

He noted that Mr. Van Groningen had indirect exports to Japan several years ago. He sold product to a Japanese broker with buying offices in California. "So the broker found Dan and bought several loads years ago. He had never been there himself."

In Japan, Mr. Hunt showed his travel party "Japanese wholesale markets, and we had very good meetings" with retailers. "We made a presentation to the people at Seiyu," which is a Japanese retail company that sold its controlling interest to Walmart last year. "Dan is a Walmart vendor," which contributed to the success of the call, Mr. Hunt noted.

For the North American watermelon industry, "I think there is room for quite a good market there. At the Japanese wholesale markets, you have to look at the way fruit is packed and the quality." Boxes of watermelons are packed so all the melon stripes go in one direction. "They look exactly the same and are the same size and are a great shape. The apples and cherries -- everything is done that way. That is the way you have to do it if you sell there, especially with competition, which there is. But this is stuff we can do."

Mr. Harrison, who sources in the winter months in Mexico, is interested in shipping to Japan via Nogales and a California seaport, Mr. Grant said. The NWPB receives an assessment on imported product as well as domestic watermelons. Thus, he said that watermelons grown in Central America or Mexico but sold through the United States can use NWPB promotion funds to help cultivate offshore markets.

During the March tour, "The Japanese buyers and folks we talked to were very impressed with the health research we've done. The Japanese are very interested in good scientific data and in the health aspects of food."

Of particular interest was the good health information regarding watermelons' lycopene and citrulline content. The Japanese tend to be more aware of citrulline, which is an amino acid, than Americans are. Thus, the Japanese have a citrulline chewing gum and a popular amino acid drink. He said that many Japanese were unaware that watermelon is the only natural supply of amino acid. "No one had researched that in Japan," he said. "I think it could be very big."

When blueberry and cocoa health benefits were publicized in Japan, sales of those products "skyrocketed," according to Mr. Hunt.

Another positive favoring watermelon exports is that "the Japanese have known about watermelon forever." When Mr. Hunt started developing grapefruit exports for the Florida Department of Citrus, "they hadn't seen grapefruit. Watermelon they grow locally. There is a summer production, but there is a shortage of all kinds of productive land. The average field is probably a couple hectares. With an aging population, the farmers get older and older, so Japan imports a phenomenal amount of food."

Mr. Hunt noted that Americans have always eaten watermelon because it tastes good, but NWPB research has recently shown that eating watermelon is a very good tool for staying slender. He said, "Of all people who don't have to worry about losing weight, it's the Japanese. But the Japanese women are as concerned about losing weight as anyone in the world."

Meanwhile, the watermelon industry "has a very good story to tell. We will try to run our first promotions in June or July."

A high Brix level is very important to Japanese consumers, and "I said we could give that product," Mr. Hunt noted. To sell to Japan, suppliers "have got to grade it hard. Brix is the main factor."

Mr. Hunt noted that the United States has a slogan: "The customer is king." But the Japanese parallel expression is: "'Okyaku-sama wa Kami-sama desu', which means literally, 'The customer is a God,'" Mr. Hunt said. "That's taking it to the next level, I'll tell you. If you appreciate that going in, you're going to be prepared to deal with it."

He noted the common expression: "Everyone says they want the best quality at the cheapest price." The trite phrase has a new meaning in Japan. "If you go into the stores, a dozen different shop keepers say 'Welcome' and a dozen of the staff bow."

A very polite culture can also work to the sellers' advantage.

"If you have in-store sampling and the demo girls are bowing and holding out a piece of fruit, you're duty-bound to try it. You bow back and say, 'Thank you for giving this to me.' If you like it, you're almost duty bound to buy one. I will definitely be doing product sampling" of watermelon in Japan.

Mr. Hunt concluded, "It is fun to get back into that milieu. They are real serious produce people. You can go into any store and it's the best-looking stuff I have ever seen. The presentation of the product is always good."

(For more on watermelons, see the April 13 issue of The Produce News.)