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| Shinji Yamasaki, chairman and CEO of Senior Communication Co., is pictured in his recently relocated office in Tokyo's Minato Ward. |
Yamasaki explains that they are characterized by a tendency to prioritize quality over price, try to live life over again after they retire and move from the vertical hierarchy of a company to expanding their circle of friends through hobbies, as well as give top priority to their financial and physical health.
In short, "Japanese seniors tend to be more independent of their children, when they pass away they do so quietly or without bothering others," he says.
Japan has one of the fastest aging populations in the world. In 2025, the number of Japanese aged 50 or over is estimated to account for about 50 percent of the population, according to Tokyo's National Institute of Population and Social Security Research. What's more, from next year, about 7 million baby boomers, born between 1947 and 1949, will begin making their way toward retirement. The generation aged 50 and over holds about 75 percent of Japan's 1.4 quadrillion yen financial assets.
With time and money on their hands, many sectors of the Japanese food, entertainment and travel industries are scrambling to benefit from these wealthy seniors.
But they are not an easy catch.
The consultancy head observes that many companies fail to win over those affluent customers, adding that seniors tend to avoid products labeled for "seniors." "Recent seniors do not think of themselves as seniors at all," Yamasaki explains.
Senior citizens have always been regarded as generations who need nursing care. Thus, "our senior business model was not initially understood by others," Yamasaki recalls of the time when he set up the company in 2000. "But my startup company pioneered this senior market and the market is expanding," he says.
Senior Communication, which is listed on the Mothers Market for startup firms, has conducted more than 1,800 surveys on senior citizens since it was established six years ago. More than 1,300 companies in different industries and municipalities use the data to develop products and services. The Tokyo-based consultancy is developing its brand products such as vodkalike distilled alcohol, or "shochu." Furthermore, the company is operating "Anti- Aging Restaurant Azabu 10 Ban," an "antiaging restaurant" that it claims about 2,000 people visit each month.
Yamasaki talks enthusiastically about an organization called "MASTER" with some 10,000 members, as well as senior community Web sites, including "STAGE," that people under 50 years old cannot join. In "MASTER," some seniors join group interviews for product and services development, some work as models for advertisements and join various circles. Members get points that can be exchanged for gift tokens when they answer questions in surveys, but "those seniors are happy to join just because they can use their abilities and experiences, which provide vital information when developing goods and services. As a result, they feel they play more active roles in their market. They also feel they are contributing to society gaining some self-achievement," Yamasaki observes.
"They are intellectual producers who help companies produce goods that may catch on in the market, using their rich life experiences and knowledge, and they are refined consumers who are seeking genuine products. Now they are leading society," he adds.
Consider Kiyoshi Yada who is 65.
The former engineer makes it a habit to exercise every day at a gym, including push-ups and sit-ups, for 30 minutes to keep fit. He recently started going to cooking classes so that he can prepare meals for his wife. Yada says that he wants to pay her back for making meals every single day when he devoted his time and energy to his company. On weekends, he travels by bus to take part in a haiku hobby circle with other seniors.
"I feel I still have many things to achieve," says Yada, wiping perspiration from his forehead at a Tokyo gym. "There are so many young people with lifeless expressions, but seniors look as though they are full of life. It may be that seniors are the driving force behind Japanese society."
For Yada, age is not a consideration if he wants to start something new; what matters is that he has the spirit.
About half of the respondents to a July 2001 Senior Communication survey said that they felt six to 15 years younger than their age.
Like Yada, seniors take a more positive attitude toward time after they retire. Japanese life expectancy is on average 82 years and so after retirement they still have 20 or more fruitful years. Yamasaki points out that more and more seniors tend to start something new such as enrolling at a culture school.
Seniors are refined consumers. Yamasaki explains that they don't usually believe advertisements; instead, they tend to listen to what a celebrity or friend says. Namely, word-of-mouth is the key to marketing for seniors, he says.
Furthermore, they have a desire to belong to a community or be connected with others after they reach retirement age. This is especially true of men because they belonged to their company as if it was a family, Yamasaki says. Obviously, the Internet helps them to be connected. In fact, Japanese seniors have become more Internet-literate and enthusiastic technology adopters, catching up with their juniors, Yamasaki explains.
The 36-year-old entrepreneur's sincere support and admiration for the elderly is probably rooted in his childhood. Yamasaki says that he was raised by his grandparents, adding that he wants to repay them for bringing him up by working in this field.
"The key to becoming an entrepreneur is to do what you really want to do. Otherwise, you may lose sight of your goal as business progresses. I have seen many young businesspeople like that," Yamasaki says.
The former consultant at Bain & Company, a global management consulting firm, says that he has been thinking about Japanese uniqueness and in what ways other countries respect Japan as he had been working with non-Japanese.
Developing a project at the consulting firm, he found few experts in this senior business despite Japan's aging society, and he thought he could become a pioneer in the field. When deciding to set up his company, he had three criteria: First, his business should contribute to making society better, namely, his business should make someone happy; second, no one else should be involved in this type of business; and third, the business must be profitable. His business model is based on what he has learned from seniors. Yamasaki says that listening is the most important factor if you want a true understanding of needs, wants and trends. "Go around town. Watch seniors. Rather than sitting and thinking at a desk, go out and do something. Then, listen attentively to what they say," he advises.
Japanese government and business leaders have stressed that Japan needs to cultivate more entrepreneurs as a way to boost the economic recovery. Young businesspeople are responding and dreaming of making their fortunes, but many of them lack a clear goal, he observes.
"Being an entrepreneur is not as cool as people think," he says. "Every day is full of failures, but I don't give up because I have a clear goal: to make Japan a better society by helping seniors live a better life," Yamazaki says in an Osaka accent.
With 37 employees at his company, "a leader needs to show a clear goal. Let your team members know each other's visions and what each member can gain when they overcome these difficulties and why we need to achieve this," he says.
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| Yukio Nagai, president of Oenon Holdings, Inc., displays the company's flagship product, Tantakatan (The Legend of the Tantaka). The framed painting depicts the legend in which the flatfish, or "tantaka" in the Ainu language, traveled to the highlands in a time of crisis to find a healing herb to help his fellow fish. This herb was "shiso," or beefsteak plant, one of the ingredients in Oenon's Tantakatan. |
What's more, Nagai says, "consumers have become more attuned to enjoying life and are learning to balance their work and leisure time." This has, naturally, been helped in part by the increase in disposable income.
Oenon Holdings is comprised of 12 subsidiaries and operates businesses dealing with not only alcohol, but enzymes and pharmaceuticals, food and real estate. Its alcoholic beverage business includes sake, wine, and its pillar product, "shochu," a vodka-like distilled alcohol.
Though the shochu market may actually be stalled, Nagai's company is zoning in on the new breed of connoisseur and targeting them with new products to match their needs.
There was a time when Japanese employees were labeled "corporate soldiers." For them, work was "something to live for," Nagai explains. But, he finds, "these days, more and more Japanese seem to be feeling that work is just one way to get enjoyment out of life."
And one of the other ways to enjoy life is to enjoy a higher quality of life. This can, and apparently does, take the form of enjoying higher-quality drinks. It also takes the form of finding a favorite brand and sticking to it, a way of exercising one's power of choice in a small, but enjoyable and easily doable way. "It may represent the so-called gap-widening society in the beverage market," Nagai says. "Some regular drinkers look for cheap alcoholic beverages such as third-category beers (beer-like drinks that have lower-than-usual levels of malt or may not even use certain ingredients such as barley or hops) and other drinkers seek high-quality, high-priced beverages or brands."
Nagai has observed at a Tokyo restaurant operated by Oenon "consumers snapping up bottles of shochu or fine wines without looking at prices." He believes they do such because they want to savor a particular flavor or aroma only to be had with a particular product.
Tadashi Saito, a 26 year-old banker, agrees. "I used to only drink beer to start with after work on Fridays, but one sip of 'Tantakatan' (one of Oenon's products) changed my drinking style. Now, this is all I drink on Friday nights," Saito claims.
Nagai says this is the kind of customer his company is wooing now. "Our focus is not so much on the quantity of sales or its market size," he claims. "It's all about giving our customers what they want -- high-grade shochu -- and about whether that will produce profits."
Japanese are becoming quite the connoisseurs of shochu and other alcoholic beverages, Nagai observes. More and more lovers of shochu want to know the source ingredient or other special ingredients of the shochu and from which region of Japan the water comes. Nagai believes it is attention to such ingredients that captures its most loyal customers.
The source ingredient of shochu, which usually contains 25 percent alcohol, can be sweet potatoes, rice or barley. "Honkaku," genuine shochu, or "otsurui" shochu is distilled only once. This process retains the aroma of the source ingredients as opposed to "korui," or multiple-distilled varieties.
Oenon's flagship "Tantakatan" is flavored with "shiso," or beefsteak plant, from Shiranuka on the northern island of Hokkaido. It is made with water from Mt. Taisetsu. In another of its key shochu, "Katsumi, Gyokuro Shochu," a particular type of high-quality green tea is used. "The consumer is seeking these specific products," Nagai says. "If we use other sources of the ingredients, we cannot produce the same taste, aroma or flavor."
Oddly, these two products were not immediate hits, Nagai says. Rather, sales are even now experiencing "gradual" and "steady" growth over a long period of time. In his opinion, these are the truly popular products, not the ones that are only temporarily popular.
The general shochu market does indeed look stalled. According to the Japan Sake Brewers Association, the shipping volume of otsurui shochu rose only a mere 0.3 percent in fiscal year 2005 compared with the year previous. It had earlier enjoyed two-digit growth.
In fact, Oenon cut unprofitable products in the alcoholic beverages division that had been generating about 90 percent of its sales. With a slimmer portfolio, the company increased its operating profits three percent over the previous year to 1.9 billion yen in fiscal year 2005 ended last December.
"The move, focusing on earnings not sales, should help the company maintain brand strength in an extremely competitive beverage environment and declining alcoholic beverage markets," Nagai says.
Still, consumers' tastes may change from product to product. Thus, Oenon is updating its products and offering different versions or different quality levels of products, Nagai explains. "Many consumers often have one brand they stick to and they want to have a variety of products from this one brand. That's something we're aiming to provide."
Oenon aims to post a 3.6 billion yen operating profit on sales of 80 billion yen in fiscal year 2006 ending in December. This is supported by its alcoholic beverages and another emerging business enzymes and pharmaceuticals. Nagai says the company is producing lactose-splitting enzymes, which make dairy products digestible for people who are lactose intolerant. He says this business firmly supports its earnings, adding that its growth is being driven by more international acceptance of the enzymes. He also says this sector's operating profit margin is in excess of 20 percent as opposed to about 3 percent in the alcoholic beverage division in the fiscal year 2005 ended last December.
The better balance that Nagai sees the average Japanese consumer enjoying between work and leisure is something reflected in his own business life. He finds the key to enjoyment is being able to switch on and switch off between work and leisure, more easily done, admittedly, by those, like himself, in control of the buttons.
The 61-year-old president likes to play the piano, paint and watch soccer. "I believe a person is capable of concentrating well for 90 minutes. I work for 90 minutes and then kick back and paint or read sheet music," he says.
Working toward achievements, he believes, is also vital to enjoying a higher quality of life. He incorporates this belief in the way he runs his company and in the way he treats his employees as well. "In the end, it's achievements that will lead you to your happiness."
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