Doing Business : Breakfast in Japan: Will It Be Seaweed or Cereal? : The answer is still basically ‘seaweed,’ but American-style breakfast foods are finally starting to catch on. Their acceptance says a lot about the changing Japanese lifestyle.


When breakfast cereals were put on the market in Japan 27 years ago, Japanese preferred to start the day with seaweed, raw eggs, rice, fish and vegetables.

The few customers who bought the products of the two pioneers--Kellogg and a Japanese company called Cisco--thought cereals were best suited as snacks for children. So did grocery stores, which displayed cereal in the candy and snack section.

Worse yet, older people mistook it for bird food.

In poorly heated homes, Japanese shivered at the idea of eating cereal with cold milk in the winter. And with most mothers sticking to the role of housewife in those days, breakfast remained a robust, family meal.


“We thought demand would emerge within five years,” recalled Koichi Nakano, director of Cisco’s corporate planning. “That was a mistake. We struggled for 25 years as a result.”

But now, at last, the increase of working mothers too busy to fix a traditional meal, husbands facing long commutes to the office who want to sleep in until the last minute and children rising at different hours to go to school have meant the end of breakfast as a meal that the family eats together. And with a spur from a rising interest in health foods, breakfast cereals are establishing a beachhead in Japan.

Market sales in retail value nearly quadrupled in three years to 24 billion yen ($176.5 million) last year and are expected to reach $265 million this year, said Shoji Ito, products director for Nestle. He predicted a 100-billion-yen ($740-million) market by 1993.

Nowadays, “fathers eat rice from an instant rice cooker. Mothers eat bread. And the children eat cereal. And each prepare their own breakfast,” Ito said.

“Mornings are getting busier and busier for Japanese families,” he added.

Kellogg, the king of the market with at least the three top-selling cereals, now finds competitors emerging by the droves. In the last three years, 10 new companies started manufacturing cereal. But it was the entry into the market in 1987 of Nestle, the giant Swiss firm, that awakened the long-slumbering market and began moving cereal out of the snack category and onto the breakfast table.

Cereal advertising on television doubled in 1987, the year Nestle came out with its Japanese-sounding “ asa gohan series,” Ito said. Asa gohan literally means “morning rice,” a traditional expression used alternately with the more modern word choshoku (breakfast). Nestle’s initial ads, nonetheless, were unabashedly Western: They featured rap music.


“Although the product had been available for nearly 30 years, the public finally came to understand what it is,” Ito said. Market surveys, he said, show that consumption of cereal as a breakfast food rose from 39% to 68% since the Nestle-Kellogg advertising battle began.

Ito noted that bread was not widely introduced into Japan until after the end of World War II, when small mom-and-pop stores began stocking it and explaining how it was eaten. In that way, it gradually won a place on the Japanese breakfast table. But, he pointed out, cereals were introduced through impersonal supermarkets, and many customers never learned what they were until the advertising campaigns came along.

Breakfast cereals also got a boost from rising health concerns, Nakano said. As Japanese grew richer, they also grew more prone to indulge in poorly balanced diets with “too much cholesterol--like Westerners,” he said.

A boom in international tourism also helped introduce cereal as a breakfast food to Japanese, Nakano said.

Nestle’s entry not only expanded overall sales but also dealt a snap, crackle and pop to Kellogg’s share of the market, reducing it by about 20%, down to 61%, according to Chain Store Age News. Kellogg officials refused requests for interviews.

Until 1987, Kellogg, with Cisco its only competitor, held an 80% share of the market.

Nestle, which has shied away from challenging Kellogg in the United States, decided to start selling cereal here when it found that coffee, one of its leading products, had surpassed the 50% mark in beverages consumed by the Japanese at breakfast.


“We decided to piggyback on coffee,” Ito said.

Sales can only go up, manufacturers say. Per-capita consumption still amounts to only 142 grams--the equivalent of about three bowls a year. “That’s less than a baby eats,” Ito said. In the United States, annual consumption averages 4,500 grams a person, he said.

Nakano estimated that Japan’s market amounts to only 3% of U.S. sales. Prices, however, are far higher in Japan, with the best-selling products costing from $2.41 to $2.71 a package. Most packages contain only a little over 6 ounces. In the United States, by comparison, most cereal boxes contain between 13 and 16 ounces.

Surveys show that Japanese want a food for breakfast that they can eat quickly, that offers a balance in nutrients, is easy to prepare, easy to digest, feels light and contains fiber, Ito said.

So why haven’t cereals sold better? It has something to do with what Ito calls “Japanese taste preferences.” And cereal makers are having a hard time ferreting out those preferences. Despite its small size, the market is flooded with about 120 varieties of cereal--”so many it’s difficult to get them displayed on store shelves,” according to Cisco’s Nakano.

“This year, we got into convenience stores by making our breakfast cereal packages two-thirds of the normal size,” Ito said. Nestle also breaks its cartons of 15 cereal boxes down into blocks, so that wholesalers don’t have to sell all 15 to a single store.

Nestle even tried out seaweed, a staple of the Japanese diet, as a feature of one of its cereals--but failed. “Japanese are more particular about the taste of seaweed than we thought,” Ito admitted.


Cisco--a biscuit, snack and cereal company that got its name because its founder liked San Francisco--found success in five kinds of bite-size wheat-based cereals that resemble Kellogg’s Wheat Chex and that contain fruits, vegetables and marine products, Nakano said.

Nestle’s leading products are gen-mai (whole kernel rice) flakes--it tastes like Rice Krispies--and vegetable flakes, a cereal that combines carrots, pumpkins and spinach, the three most popular vegetables in Japan, in both wheat and rice flakes, Ito said. The company’s No. 3 best-seller is coco-paya-- coconut-papaya flakes. Another of its cereals incorporates soybeans and traditional Japanese red beans.

General Mills, which has a tie-up with Calbee Foods Co., a 1988 market entrant in Japan, exports cereal in bulk and packages to Japan but has changed additives, reduced sweetness and bakes its products longer to meet Japanese tastes.

Despite the lack of any unique Japanese taste, however, corn flakes are far and away the best seller. Ito said Nestle’s has no plan to challenge its American rival’s stranglehold on corn-flake sales here.

“Kellogg is a synonym for corn flakes,” he acknowledged.

Breakfasts these days in Japan have become a mixed bag.

Baseball players from Tenri High School in Nara partook of rice, miso (bean paste) soup, fried eggs and banana juice the morning they won the annual national summer baseball tournament in Osaka.

A typical “Western” breakfast here consists of juice, fried eggs, ham or bacon and toast--topped off by a vegetable salad with vinegar oil. If served at an inn, the eggs and bacon inevitably arrive cold.


For about 20% of Japanese, breakfasts consist of nothing at all: They skip the meal en route to work or school.