△2018 China (Luohe) Food Marketing Innovation Summit & 3rd Leisure Food Manufacturers Precision Matchmaking Conference Free registration is in full swing, scan the code for details. For FMCG professionals, whether you are a newcomer with 1-2 years of experience, a mid-level player with 3-4 years, or a veteran with 5-10 years or more, which companies come to mind when asked to list long-established FMCG enterprises? We have lamented that 132-year-old Coca-Cola is aging, that Procter & Gamble, once at its peak, is falling from grace, and that Unilever is constantly merging or restructuring... Some have said: In this world, there are no eternally successful companies, only companies of their era. Even Jack Ma, with his eighteen-core brain, only dares to say that Alibaba's goal is to live 102 years, not forever. The world changes rapidly; no one can stand at the pinnacle of the times forever. Today's protagonist is an exception that breaks the mold. It is exceptionally low-key, yet it has smoothly navigated the changes of the times, standing strong for 306 years. Its growth footprint also bears witness to the history of Japan's food distribution industry. Today, I will take you into this Japanese food marketing company—Kokubu Group, which constantly pursues "deliciousness." Kokubu Group, with a long history, was founded in 1712 by Kokubu Kanbei in Edo Nihonbashi. Over 300 years of development, Kokubu Group's business has undergone several changes, covering food wholesale, logistics, retail, import/export trade, and other business segments. In 2010, Kokubu Group entered China, establishing a joint venture, Santong Kokubu Trading (Qingdao) Co., Ltd., to carry out logistics and wholesale operations, thereby starting its overseas expansion. As of now, Kokubu Group has established 28 overseas subsidiaries globally. Public data shows that Kokubu Group's consolidated sales for the fiscal year ending December 2017 were 1.8797 trillion yen (approximately RMB 109.7 billion), serving over 35,000 customers, including supermarkets, convenience stores, department stores, drugstores, liquor specialty stores, restaurants, food service providers, and online retailers. Kokubu Group currently has 279 logistics centers, forming a logistics network covering all of Japan and radiating to China and the entire Southeast Asian region. Kokubu Group's grand history and data are only part of what amazes us. In my view, there is much more worth exploring and studying. Its "uniqueness" also lies in its self-positioning as a "food marketing company." What is a food marketing company? What can we learn from a food marketing company like Kokubu Group, which integrates wholesaler, manufacturer, and retailer roles while providing professional marketing solutions to clients across the food industry chain? Next, I will take you to explore the uniqueness of this long-established company. Perhaps we can glean some secrets to its 300-year longevity. Taking the Distributor Role to the Extreme Think what customers think, worry about what customers worry about. Sales Agency Level: Undoubtedly, Kokubu Group's scale as a distributor is enormous. It has 10,000 domestic suppliers and offers over 600,000 products, covering all foods essential to daily life, including processed foods, alcoholic beverages, and snacks. Retail Support Level: With changes in the social environment and lifestyle, people's dietary preferences have become more diverse, and the products consumers need have become more complex. Kokubu's requirement for itself is to respond to these new consumer needs. Leveraging its years of accumulated "wholesaler discernment," Kokubu Group can provide customers with carefully selected products from across Japan and the world. As a wholesaler, they are not just "middlemen"; Kokubu proposes "best-selling products" and "how to market them," helping customers "select products" and "sell products." Wholesalers are the nodes connecting food manufacturing and sales, bearing the functions of "what to sell, how to sell, and how to attract customers." From safety and security at the manufacturing site and product development support to ensuring consumers can happily purchase products at retail stores, Kokubu, as a wholesaler, can interpret the needs of all food distribution customers, create and provide products, logistics, and services, and move forward together with customers. "Providing what is needed to those who need it" is precisely the starting point of Kokubu's role as a wholesaler. Logistics Level: Logistics is an indispensable foundation. To support the efficient operation of the entire product distribution, Kokubu Group has established comprehensive logistics bases capable of handling dry, low-temperature, frozen, and fresh food, and by organically combining with transportation and delivery networks, it fully leverages its intermediate logistics functions rooted in all regions of the country. Product Management Level: As a distribution company, the quality management it should implement is to strive to ensure product quality until it reaches the customer. As a wholesaler, Kokubu Group has signed capital and business contracts with QSAI Analysis Institute, a registered inspection agency of the Ministry of Health, Labour and Welfare, building a system to support the safety and security of products distributed by Kokubu Group from the inspection and analysis perspective. Information System Level: Effective and waste-free distribution hinges on information. Kokubu Group has built its information systems based on the concepts of "openness," "centralization," and "functional dispersion and integration," meticulously responding to various changes in distribution and handling the enormous transaction volume expanding nationwide. These information system functions are applied to "expanding business and rapidly responding to changes in the business environment," "improving profitability," and "developing new businesses," serving as the safe and secure business foundation of Kokubu Group, operating 24/7, 365 days a year. Taking the Manufacturer Role to the Extreme Not producing just because it "sells well," continuously developing new products. Nihonbashi Kafu Co., Ltd. product development. Production Level: With the deepening of Japan's declining birthrate and aging population (China is also beginning to follow suit), single-person and two-person households now account for more than half of all households, and consumption patterns are changing rapidly. Looking to the future, what measures should be taken to respond to the trends and needs of the times? "Just because it sells well" is no longer enough to capture consumers' hearts. Kokubu Group, centered on Nihonbashi Kafu Co., Ltd., conducts unique product development that emphasizes consumer perspectives and safety and security. By jointly developing products with food and beverage manufacturers and long-established Nihonbashi companies, Kokubu Group is actively engaged in diverse manufacturing, having developed and produced over 10,000 products to date. Retail Support Level: Listen to consumers' "now," interpret "TK" (= "trends" and "omens") in marketing. Kokubu Group is committed to developing new products, product assortments that gain customer support, easy-to-find store displays, pricing strategies, etc. By continuously researching consumers and thinking about "product assortment," "shelf display," "promotion," "price," "service," and "originality" that satisfy customers, it depicts the ideal image of a "warm and attentive store" and makes proposals. On the internet, Kokubu Group operates 11 websites for communicating with consumers, including "Guruppa" and "Sakana no Tsukami Club," thereby systematically grasping consumers' lifestyles and preferences for marketing, providing more effective product development and store promotion plans. Listening to more consumers' true voices, "predicting the future and interpreting omens" is precisely the starting point of Kokubu's role as a manufacturer. Logistics Level: Building a "3OD+PLUS" concept that integrates SCM logistics functions. Kokubu Group possesses various logistics functions. The core "wholesale logistics function" uses logistics facilities called general centers, handling multiple temperature zones (ambient, low-temperature, and frozen) to serve multiple customers in the region. Next is the "retail-specific logistics function," which is expanding through the "one-order-one-delivery" (3OD logistics concept) with functions tailored for retail. Additionally, Kokubu Group is also engaged in "manufacturer logistics functions," handling various operations from ambient to low-temperature and frozen products, from inventory to transportation. Kokubu Group will integrate these logistics functions to promote the new logistics concept of "3OD+PLUS," which is more effective and functional. It achieves the integration of multiple temperature zone products with manufacturing, delivery, and sales logistics functions. To implement "3OD+PLUS," it is building "comprehensive centers" with three temperature zone functions in core cities across Japan. Quality Management Level: Based on the manufacturer's perspective, implement strict manufacturing quality management. In manufacturing quality management, Kokubu Group follows the "three realities" principle of "actual product, actual site, and actual situation," conducting hygiene management at production plants, confirming compliance with manufacturing rules to prevent product accidents, and responding to customer inquiries "quickly, fairly, and humbly." Through quality management on all fronts, it builds trust with customers. To prevent product accidents and transaction disputes, Kokubu Group conducts quality management-related employee education, striving to cultivate employees' "eyes" to proactively observe factories and products. Employees with such discernment strive to provide customers with "safety and security" while conveying accurate information and resolving issues early. Information System Level: Kokubu Group's information systems are divided into three systems: the business management system KMS centered on financial accounting, the logistics and ordering system KLS, and the information analysis system KIS for handling sales information. Each system is independent yet organically cooperates to flexibly respond to Kokubu Group's ever-expanding business. Additionally, communication satellites are used for real-time backup of information processed by these systems, as well as disaster countermeasures, ensuring that Kokubu Group's information infrastructure can continue to operate at any time. Despite 300 Years of Glorious History Kokubu Group Still Moves Forward Steadily 10th Long-Term Management Plan In the 10th long-term management plan starting in 2016, Kokubu Group's goal is to "as a 'food marketing company,' actively respond to the real business needs of customers (all enterprises dealing in food) and become the No.1 company in customer satisfaction." "Food marketing company" means: "Define 'all enterprises dealing in food' as customers, create value that customers seek, and build stable relationships with customers."
- Setting the goal of "closely cooperating with local communities and nationwide wholesale": Companies in each region are rooted in their local areas, becoming major operators in the regional food economy while strengthening inter-regional cooperation to establish a value system unique to nationwide wholesale. Rather than taking a uniform approach nationwide, they conduct regional management rooted in local food culture, meeting the true needs of all customers while leveraging the functions of nationwide wholesale beyond previous levels, so that people associate "closely cooperating with local communities and nationwide wholesale" with "Kokubu."
- Making overseas business a "mainstay" business: As a strategy to counter the shrinking domestic market, Kokubu Group has established overseas business as another "mainstay." Based on "enhancing import/export business," "further expanding China operations," and "developing and deepening the ASEAN region," these three pillars serve as the axis to increase Kokubu Group's presence in overseas operations.
- To promote the long-term management plan, strengthen "development of comprehensive marketing talent": To realize the vision of the 10th long-term management plan, Kokubu Group is committed to developing each employee into a "comprehensive marketing professional" with high expertise who can implement PDCA independently, maximizing individual capabilities. Summary From Kokubu Group's development trajectory, it is not difficult to see that Kokubu is not just a food distribution company, but a full supply chain company covering production, distribution, and retail. It is precisely because it covers the entire industry chain from production to consumption that Kokubu Group can quickly adjust its strategic direction and respond rapidly to market changes. Kokubu Group's strength also lies in its extreme grasp of customer needs. Thinking what customers think, worrying about what customers worry about, it produces, manages, and sells products from the perspective of customer needs, and through continuous iteration and restructuring, it gradually enriches its business modules, optimizing internal operational efficiency to the extreme. This makes it easy to understand why Kokubu Group has maintained strong vitality for 306 years, always meeting customer value—something that most food distribution companies in China currently lack. I hope that through this interpretation of Kokubu Group, we can bring some reference and reflection to China's distribution industry companies and distributors. If you have any thoughts, feel free to leave a message for interaction below. -END-