Case study: Making sense of Japanese market

The success of Five Senses Coffee, according to its founder and master roaster Dean Gallagher, lies as much in the philosophy of the company as it does in the quality of the product.

Mr Gallagher said his products were not just coffee beans or machines, but a coffee program; a service tailored to suit the needs of each client.

“The beans are only a small part of it, ironically, because the beans actually amount to nothing unless they translate well into the cup. And that’s what we focus on,” Mr Gallagher told WA Business News.

“We talk about the equipment that they’re going to be using to put the coffee through…the style of coffee they like, the style of coffee we think the demographic will like.”

From its beginnings as a one-man operation in 2000, the 15-strong team at Five Senses Coffee now supplies coffee beans and commercial equipment to cafes across Western Australia, as well as in Sydney and Melbourne.

The company is also enjoying the taste of export success, shipping its packaged product to Hong Kong and Japan.

In late 2002, an Australian business-woman based in Japan approached Mr Gallagher with her interest in importing Five Senses Coffee.

After initially selling handfuls of product to that country, the company identified that cracking the Japanese ‘gourmet’ market was going to be a challenge.

“The Japanese are a very fussy market. I can’t afford for one bag to go out which is not 100 per cent perfect,” Mr Gallagher said.

“They have been scrutinising our product for years. It has to be good every single time.”

The assistance of their experienced expatriate partner in Japan was pivotal in identifying, and targeting, the consumer behaviours of the market.

“Our partner in Japan had a really good understanding of the psyche of the Japanese market,” Mr Gallagher said. “She implored us to be patient. We’ve responded to everything she said we needed to do.”

The company recognised the need to engage with Japanese consumer more directly, and so produced a series of promotional brochures explaining the product in detail – describing the coffee in terms of its level of acidity, body, flavour and aroma.

It also employed a Japanese graphic design team to manipulate parts of the packaging, including the text and graphics according to the country’s compliance rules, while still retaining the integrity of the original design.

“The design brief didn’t change, because that’s the reason they bought it. But there are compliance issues in every country that you go to,” Mr Gallagher said.

The company also overcame the logistical challenges associated with exporting by quoting all product ex-roastery and letting the buyer handle all internal regional requirements in Japan.

“Because there are so many local rules – as we have when we import product – it’s far better to price your article to allow [the buyer] to do that side of it,” Mr Gallagher said.

In the past two months, Five Senses Coffee has been accepted for inclusion in the Qantas in-flight catalogue on flights to Japan, and the Japan Post’s gourmet brochure, produced every Christmas and sent to millions of Japanese households.

Both campaigns are long-term, running for a minimum of two years each.

With export sales to Japan on the rise, Mr Gallagher said the time and money put into that Japan market was worth it.

“It’s a tough market, but they’re very loyal. They don’t change brands very easily.”

“But the great thing is you do all the work, and you get in, it’s unlikely that they’re going to change to another coffee brand that easily.”