Conquest through quality
The key to Taiwan’s resurgence in the frozen edamame market in Japan is that frozen food factories in Taiwan upgraded their equipment and processing chain to lock in the freshness of the vegetables within the “golden four hours” window of opportunity. The resulting frozen edamame, with “Produced in Taiwan” and “Kaohsiung #9” printed prominently on the labels, offered Japanese consumers a freshness of taste that was unprecedented for imported frozen green soybeans. Indeed, one of Liu Kuei-ping’s clients, who has been doing business with him for over 30 years, has declared that frozen edamame from Taiwan “taste even fresher than just-picked edamame grown in Japan!”
No other imported vegetables have been as big a hit among Japanese consumers as Taiwan edamame. The model for success has been to link and coordinate R&D, production, processing, and marketing.
The success of edamame has not been a matter of luck. Japan is well known for the strict standards it has for managing imported agroproducts. The reason Taiwan edamame have been getting over the bar for 40 years is due to one thing: quality.
Of course “quality” is a rather abstract term. What has it meant in practice? Liu Kuei-ping’s answer is simple: “If the consumer market sets the standard at 100, we give them 101.”
Walking into Hou Zaobai’s office, you see a huge poster hanging on the whitewashed wall. On it are names of agrochemicals in Chinese, English, and Japanese. “The Japanese authorities use a ‘positive’ method of agrochemical management, which is to say they list the types and amounts that are allowed, rather than the types and amounts that are prohibited. If any chemicals at all other than those listed come up in a test, you’re done for,” says Liu. Taiwan edamame producers treat these standards as their “Ten Commandments.”
But that still isn’t enough. Liu says that after the incident involving mainland Chinese vegetables back in 2002, Young Sun coughed up big bucks to upgrade the agrochemical testing facilities in its factory, and anything they can’t handle themselves they commission out to the labs of the Council of Agriculture.
In other words, internal quality control is stricter than external standards—that’s what Liu means by a quality grade of “101 points.” And that commitment to quality remains steady no matter which market the exported edamame are headed to.
In fact, Taiwan edamame producers are now beginning to look beyond Japan and are eyeing the US as a possible second market. Since the US Food and Drug Administration issued a report in 1998 that edamame can help prevent cardiovascular disease, interest in this veggie has risen in the US. But right now Taiwan exports account for only about 2200 tons of the 40,000 tons of frozen edamame imported by the US each year, roughly 7% of total exports from Taiwan.
Liu Kuei-ping says the reason is that US consumers still have only a very elementary level of understanding about edamame quality, so cheaper edamame from mainland China and Thailand hold the upper hand in the marketplace. However, given that mainland Chinese growers are now facing problems of rising wages, price inflation, and difficulty recruiting labor, and their level of mechanization lags behind Taiwan, many Taiwanese firms have decided to come back home, and it is expected that many foreign buyers will shift their orders to Taiwan.
However that may be, the fact remains that for the present the edamame exporters have almost all their eggs in one basket: Japan. Isn’t that a little risky?
“I’m not really worried,” says Liu with confidence. “The condition of the economy only affects the food industry by about plus or minus 10%. No matter how bad things get, Japanese will still eat at least 50,000 tons of imported edamame per year.”
Moreover, edamame fetch a higher unit price in Japan than anywhere else. (They sell for about ¥398 for a 400-gram bag in supermarkets there; mainland edamame go for about ¥100 less.) Liu has even gone so far as to refuse orders from the US over the past couple of years to satisfy demand from the higher-profit Japanese market. “It’s too bad, but there just aren’t enough green soybeans to go around!”
But as soon as the reserve supplies of ammunition (soybeans) can be brought up to the troops, Taiwan’s edamame army will be ready to conquer new markets wherever they may be. Taiwan’s edamame exporters are still far from exhausting their ambitions!