Proc. Fla. State Hort. Soc. 92:241-245. 1979.

MA,RKETING OF FLORIDA GRAPEFRUIT IN JAPAN! H. KITAGAWA Florida in the last season, 1978-79. Grapefruit is imported Kagawa University, Faculty of Agriculture, into Japan from California, Arizona, Texas, Israel, Mexico, Miki-cho, Kagawa-ken~761-07 JAPAN South Africa, Swaziland, Cuba, etc., as well as from Florida which is the major exporter. During 1976, 1977 and 1978, K. KAWADA University of Florida, IFAS, AREC, imports from Florida to Japan represented 67%, 65% and P.O. Box 1088, Lake Alfred, FL 33850 54% of total fresh grapefruit imports, respectively (Table 1). California has the second biggest share which, when combined with Arizona, was 23%, 26e:to and 35~o. in 1976, Additional index words. Citrus paradisi, export, statistics. 77, and 78, respectively. Imports from California and Ari­ zona tend to increase. Israel, who exports 6 to 12 thousand Abstract. The present situation on grapefruit trade and MT p'er year, Texas and the others do not s·eem to marketing in Japan are described. Competition, problems materially increase their grapefruit exports to Japan. for Florida grapefruit exports into Japan, as well as ways to increase exports to Japan are discussed. The Japanese Table 1. Japanese imports of fresh grapefruit from various countries, consume as much as 700,000 metric tons (36.3 million 4/5 1976-79.z bu. Fla. cartons) of fresh citrus fruits in December alone, which is the peak o·f the Unshu-mikan (Satsuma) season. The Calendar year Jan-July delicate taste of Florida grapefruit suits the Japanese. Ac­ Country 1976 1977 1978 1979 cordingly, if high quality grapefruit can be supplied constantly, exports of Florida grapefruit can be greatly in­ ...... 1,000 cartons . creased. The total quality control would be one of the key­ U.S.A. 8,292 9,273 7,850 7,583 points for the successful future of grapefruit trade to Japan. Florida 6,072 6,580 4,626 5,791 California 1,700 2,449 2,420 1,583 Arizona 404 216 598 178 Current Grapefruit Imports into Japan Texas 116 28 206 30 ~a~fruit Israel 352 513 367 323 Seasonal (August through July) changes in Swaziland & imports into Japan for this decade are ~hown I~ FIg. 1. S. Africa 286 352 265 262 After the trade liberalization in July 1971, Imports Incr~a~ed Mexico 115 30 81 rapidly, exceeding 150,000 metric tons (MT) (7.8 mIllIon Cuba 3 Total 9,045 10,168 8,566 8,168 cartons) in the 1973-74 season after only 3 seasons. Importa­ tion from Florida was suspended from June 1974 to March zSource: Japan Fresh Fruits and Vegetables Imports Managerial Associa­ tion, Tokyo, Japan.

~ Monthly imports from Florida, California plus Arizona, en 15 ....l 8 :z o and the others are shown in Fig. 2. Because these data are t­ o o:: based on reports from importers, some of the actual im- t- ~., i~"s·~:··:>\·'········"",,,,,"// c::t o ; ,", \ I ~6 0 I I " \ I a:: I u. :i " ,, " \\ II - FLORIDA I- 10 1 0 w ..,/ 2: .... I" FLORIDA \/ en 15 ----- CA a AZ .... I ~ ...... OTHERS :.' I 4 o i I :J Cf') : I .-J 2 o : I o o 5 : I ~ t­ o .: I er ! I 2 ~IO IBERALIZATION FRUIT JAN /77 L FLY FREEZE

1 ol-.Jl~~==f:--:"-+---+---1~~-+---r----t--+---'O! 1 ! 68 70 72 74 76 78 -69 -71 -73 -75 -77 -79 Fig. 1. Seasonal changes in Japanese imports of fresh grapefruit from Florida, all U.S.A. and total. Season: August thro?qh JUly. Im­ ports from Florida before the 1974-75 season are unoffICIal .estImates by Dr. L. H. Myers, Economic Research Dept., Fla. Dept. of CItrus. 1975 due to the. Caribbean fruit fly. Freeze-damaged grape­ fruit imported from Florida in 1977 weakened the ~arket. Due to this "frozen fruit shock," imports from FlorIda de­ creased by 48,700 MT, 2.5 million cartons in the next Fig. 2. Monthly import notification of fresh grapefruit arrivals in Japan from Florida, California plus Arizona, and other sources, 1976-79. season, 1977-78. Nevertheless tiley again increased to a record 168,000 MT in total and 7,06 million cartons from portation might have been a month later. A significant amount of Florida grapefruit was imported in November l.The authol:s al:e indebted to Dr. W. Grierson, University of Florida, but the most was imported between February and l\;fay. for his advice editing the manuscript, and to the Japan Fresh Fruits and Vegetables Imports Managerial Association for their cooperation Thereafter, California and Arizona grapefruit was imported providing useful information. with a peak in July. Proc. Fla. State Hart. Soc. 92: 1979. 241 Distribution System of Grapefruit in Japan There are 3 types of grapefruit importers: I-Produce de­ partments of trading enterprises; 2-Trading companies specializing in fresh fruits and vegetables; 3-Trading de­ partments of Seika-Co (wholesalers in the central produce markets). Unloading ports for grapefruit are Tokyo, Yoko­ hama, Osaka, and Kobe, thence fruit are shipped to the whole country by truck. Grapefruit unloads are highest in Tokyo which has taken about llalf of the total imports Zo OL...... -L...--....L._---L.._--J-_....1-_..L.-_L...--...1_-..L._----1..-_---L--_~ during these 3 years...... JAN F M A M JUNE/78 A SON DEC The distribution system for imported grapefruit is very 0:: ~ 1\• complicated, but is summarized in Fig. 3. Some fruit are I\ °4 WHOLESALE PRICE , \ sold directly from importers to chain-stores and super­ ...... z " \ markets, most of all is sold through the wholesale markets fll'fII'---4IIlt " \\ ~3 ,,-fII' 4IIlt .... , in the main cities. Significant amounts of grapefruit are o ------~ \, sold through Nakagai (middlemen or jobbers in the produce g,2 " , IMPORTER FRUIT DEPT of TRADING CO Fig. 4. Monthly imports, wholesale sales, wholesale and ClF prices FRUIT TRADING COIo--_....l.- of grapefruit in Japan, 1978. B ~200 z AMANATSU A w >- WS PRICE '/' " - , " w o (r Q.. 150 LL o ,,-fII", /., GRAPEFRUIT ..... \ I I CIF PRICE . d5 ',-~, ,/ ,..-----."!'!'!.,. W " /',,, / " ' " -J Fig. 3. Main distribution system of imported citrus fruits within " ' " , ". = ~'OO •... '/ " " ,' \ Japan. (Seika-Co wholesalers in the central produce markets. Naka­ lIJ ...• ',,-fII' . gai = middlemen or jobbers.) ..J .....•. '."---- UNSHU o ...... WS PRICE %: -,...... markets) in the Tokyo market to Seika-Co in other cities, ~ ...... then resold through Nakagai there. Wholesale markets are 1 I I I established under local public entities, which include Seika­ o '70 71 72 73 74 75 76 77 78. Co and Nakagai (Fig. 3). Seika-Co sell domestic produce to Fig. 5. Yearly average wholesale (WS) and elF prices in the To.kyo Nakagai by auction. Seika-Co charge shippers a sales com­ market, 1970-78. mission of 7.0% for fruits and 8.5% for vegetables. Nakagai sell produce to retailers by negotiation. Imported fruits are price of grapefruit is much higher tIlan Unshiu-mikan, the not sold at auction, their prices being negotiated between most popular citrus fruit in Japan, but recently has been Seika-Co and Nakagai. There are no data, but it is certain a. little ch~aper than Ama-natsu, the second most popular that a major portion of imported fruits are sold through CItrus. As we mention below, Ama-natsu looks similar to 'wholesale markets as is customary for domestic produce, grapefruit and having the same marketing season they com­ 90% of which is sold through wholesale markets. Fig. 4 pete with each other. Unshiu-mikan has serious over­ contains monthly total imports, total sales through all whole­ production problems and has been unprofitable for the sale markets in Japan, together with average wholesale and farmers, but the price is rising again. CIF prices. There is a time lag between importation and Fig. 6 shows monthly ClF, wholesale and retail prices in sales, and grapefruit are sold throughout the year with a the Tokyo market since January, 1976. A reason for the peak in May due to the biggest shipment from Florida. stable CIF price from 1976 to 1978 is the rapid change in Total sales in Fig. 4, however, might be more than the exchange rate between Japanese yen and U.S. dollar. The actual amounts, for the same fruit could be sold through wholesale price was even lower than the CIF price during more than one wholesale market as shown in Fig. 3, such July to September, 1977, mainly due to much freeze-damaged fruit would then be reported more than once. grapefruit imported from Florida. The fluctuations around October, 1978 were also caused by poor fruit quality. Sig­ Price nificant amounts of poor quality grapefruit were imported in November after a shortage in September and October. Fig. 5 shows yearly changes in average CIF and whole­ These facts indicate that grapefruit price in Japan is very sale prices of grapefruit, Unshiu-mikan (Satsuma, Citrus sensitive, not only to the demand-supply relationship, but unshiu) and Ama-natsll (low-acid Natsudaidai, C. natsudai­ also to fruit quality. Wholesale prices in the Tokyo market dai) in the Tokyo market. Both CIF and wllolesale prices were rather stable compared to domestic citrus fruits, the decreased after the trade liberalization in 1971 but have prices of which vary greatly depending on the demand­ tended to increase recently. Imported grapefruit are supply situation. subjected to an ad valorem custom duty of 20% in June to Because the Japanese consider fresh fruit a luxury, high­ November and 40% in December to May. TIle wholesale quality fruits are sold at extraordinarily high prices. Re- 242 Proc. Fla. State Hort. Soc. 92: 1979. 5 400 I~ Uj (.!)4 RETAIL PRICE I\ z -, ...... I\ 0 J ~ \ I '" , I t- 300 UNSHU lSATSUMA) ...... \1\,/1\, -..,~\ 1\ ',' IJ u -\j \ /\, \ I ~ z 3 t- LLJ \,,,.' - \ J W >- I ~ ,- AMANATSU, 0 20 0 2 0 0 0 'HASSAKU 0 10 ...... IYO, •...... •

75 76 77 78 79 OL..--.....L.L-.l....L..L..J....I-L,.L..L..L..I.....L-L..L.L.-L....L..&...&...L...L.IL...L-L..L.L.L...... ~~~~~~ JAN JULY JAN JJLY JAN JULY JAN JULY Fig. 7. Production of citrus fruits in Japan, 1971-78. -1976- -1977- -1978- -1979- problem of the grapefruit trade to Japan was a great deal Fig. 6. Monthly elF, wholesale and retail prices of fresh grapefruit of loss ~ue to decay (I). At times it was said that most of in the Tokyo market, 1976-79. the rubbish in May to iJuly at the wholesale market in tailers grade grapefruit within a carton and sell good ones Tokyo was Florida grapefruit. There are no data on the and deformed or blemished ones for very different prices. amounts of decay~d grapefruit, however the amount of A grapefruit sells for 1000 yen ($5.00) to 100 yen (50¢) de­ fruit abandoned by the order of the Plant Quarantine (PQ) pending on its quality (3, 4). Therefore, it is very difficult to mostly due to decay, is shown in Fig. 8. Plant Quarantine survey actual retail prices of grapefruit, however, it may be orders dealers to sort out and abandon decayed fruit when said that both the retail and wholesale prices of grapefruit they find more than 3% decay in a shipping load. The are much more stable than those for domestic citrus fruits. 10 Competition ABANDONED GRAPEFRUIT California and Arizona grap,efruit. As we show above, YEAR CARTONS % imports from these states increased recently (Table I), 8 1976 143,714 1.59 affecting Florida grapefruit sales. This is mainly due to the 1977 90,705 0.91 "frozen-fruit-shock" in 1977 which, for the Japanese, left en 1978 38,327 0.47 z an image of Florida grapefruit as poor quality fruit. How­ 0 ..... 6 ever, since the major imports from these states are after 0:: 2), orange fruit trade. O'-fA'~+-+-t-+-J'~~~~-H-~~~~--+-+~""""~~~t-+--t---.J If this is opened for February to May, the main season for JAN JLLY JAN JULY JAN JLl..Y JAN JULY Florida grapefruit, competition between Florida grapefruit -1976- -1977- -1978- -1979- and California navels would be very sharp. Fig. 8. Monthly grapefruit abandonment by the Plant Quarantine in Domestic late-season citrus fruit in Jap'an. 'Unshiu­ Japan, 1976-79. mikan' was a very profitable crop before about 1965. Plant­ ing acreage and production increased greatly, reaching greatest amounts are abandoned in June and July. For 173,100 ha and 3.4 million MT. The price fell so drastically example, 100,755 cartons (8.9% of the total imports) in as to make sales unprofitable (1). On the other hand, Japan­ June 1976, 355,906 cartons (5.7% of imports) in July 1977 ese late-season citrus such as 'Ama-natsu', 'Hassaku', 'Iyo-kan' were abandoned. Fortunately, it was only 2,988 cartons in sell at good prices in February to June, the same season as May and 5,734 cartons in July 1979, mainly because SOPP for Florida grapefruit. Thus, Japanese growers have been (sodium O-phenylphenate) and TBZ (thiabendazole) were resetting or grafting these late season ci trus cultivars onto approved in April 1977 and August 1978, respectively.2 Unshiu-mikan. Therefore, production of these late-season Nevertheless, since these data are based on the PQ orders citrus is increasing rapidly as shown in Fig. 7. This trend to abandon decayed fruit exceeding 3% at inspection, the will continue and will compete with Florida grapefruit. actual amounts of decay must be much more. Furthermore, decay from unloading until retail sale would be much more Problems for Florida Grapefruit Exports to Japan 2The efforts of Dr. W. Grierson, University of Florida, in compiling Decay. Initially diphenyl (biphenyl) was the only fungi­ and editing the submission to the Japanese government requesting TBZ cide approved for grapefruit in Japan (2), and the biggest use on Florida grapefruit were significant. Proc. Fla. State Hort. Soc. 92: 1979. 243 than in transport to Japan. Smoot and Hale (5), based on Retail price. There are 2 types of fruit retailing in Japan. their 1976-77 study, reported that decay doubled in a week The first features very higl1 quality, excellent tasting fruits and tripled in 2 weeks after unloading in Tokyo. Signifi­ whicll are purchased as gifts, tokens of esteem ratller than cant amounts of decay ,vere observed during marketing just food. Fruits that quality for such use command very periods in th.e 1978-79 season, .even though TBZ was high prices, quite disproportionate by comparison with applied. Not only the postharvest fungicide, but also pre­ other fruit purchased for household food use. The second harvest and postharvest handling for export fruit should be retailing channel handles quality fruit with fairly good ap­ improved to a great extent. Careful handling could he one pearance and flavor for use as a food (3). Because July and of the most important factors in maintaining and increasing December are the gift seasons in Japan, more p·remium exports of Florida grapefruit into Japan. grade grapefruit can be exported if it can be supplied in EDB burn. Florida grapefruit for the Japanese market these months. However amounts sold this way are limited; have to be fumigated with etllylene dibromide (EDB) to the latter is the way that can absorb great amounts of kill the Caribbean fruit fly larvae. EDB fumigation, how­ Florida grapefruit in Japan for the future. Many I'etailers ever, sometimes causes rind injury, so called "EDB burn." agree that if they can sell a grapefruit for 100 yen (50¢) it There are no certain trends on EDB burn. Sometimes it is easily sold out. Importers generally agree that for this happens on a small scale scattered among the shipments retail price, the wholesale price should be 3000 yen ($15) but occasionally appears concentrated in a particular load. per carton for which FOB packinghouse can be about $4.00. For example, 7.9% of a certain brand unloaded on Feb. 22, The main reason for the increasing retail price is freight. 1979 from a chartered boat in Tokyo was unsalable due to Freigl~t rates are continuously increasing due to the oil EDB burn, and 10.7% of another brand shipment unloaded shortage. The next reason is the excllange rate. The Japan­ on March 7, 1979. Research on this problem, which proceeds ese yen was most expensive against the U.S. dollar in No­ at the University of Florida at Lake Alfred and U.S. Dept. vember 1978, $1.00 = 184.4 yen, tllereafter it has been of Agriculture in Orlando and Miami, merits more en­ getting cheaper (Fig. 9). Reduction of custom duties is couragement from the state and the industry. strongly requested by U.S. As a result of the Tokyo Round Fruit deformation. It takes 3 to 4 weeks to travel about in March 1979, they will b·e decreased from 40% to 25% 14,000 km from Florida through the Panama Canal to Japan by boat. Much of the grapefruit loaded in the bottom layers are badly deformed during shipping. As mentioned above and below, since the Japanese consider quality fruit a luxury, deformed fruit are graded out for bargain sales and thus pull down the total price. Further study to minimize fruit deformation is necessary. Freeze-damaged fruit. Florida grapefruit damaged by the Z January 1977 freeze led to the collapse of the Japanese LaJ market. As shown in Fig. 6, wholesale prices were lower than >- elF prices and importers lost much money. Some even went o bankrupt. Dried-up fruit gave Florida grapefruit an image °2 as the poorest quality fruit reaching the Japanese consum­ ers. This serious experience provides a lesson for the next freeze. Methods to separate frozen grapefruit accurately, and postharvest physiology of frozen grapefruit should be studied 1 11111,1. 111 1111'1.11111.1111,,1'11111111,,1,, J more. JAN JULY JAN JULY JAN JLLY JAN JJLY Other problems. Besides these problems, weigllt loss, - 1976 - -1977- -1978- -1979- chilling injury, senescence and seed germination are im­ portant limiting factors in grapefruit quality and shelf-life, Fig. 9. Monthly exchange rate of yen per U.S. dollar, 1976-79. and hence in setting the price. in December to lV1ay and from 20% to 12% in June to November within 8 years, starting in April 1980. Since Factors to Increase Exports of Florida Grapefruit to Japan duties are ad valorre'm, i.e. applied to the elF price which Quality. The most important factor is quality. Not only includes the freight, this decrease in the tariff will sig­ to resolve the problems described above, but it is also nificantly affect this trade. necessary to make efforts to supply excellent quality grape­ Way to eat grapefruit. Grapefruit are still unfamiliar to fruit with much less variability witllin a shipment, within most Japanese. The only way advertised is to eat halves a season and among seasons. Establishment of a grade for with spoons, and many Japanese still think this is the best export grapefruit is recommended. The Japanese may be way. However, some Jap·anese are getting used to eating the most fresh citrus fruit consuming people in the segments sep·arately, peeling off locular (segment) mem­ world. They eat as much as 700,000 MT in December alone, branes. A few Japanese who eat grapefruit almost everyday the biggest season for Unshiu-mikan. This is equivalent to eat them this way. Actually, this is the most popular way the total fresh grapefruit shipments from Florida, including to eat Japanese citrus fruits, and it is not regarded as diffi­ domestic and export. If Florida could export excellent cult. Therefore, if people get familiar with this way of eat­ quality grapefruit constantly, there is a good possibility that ing grapefruit, the total consumption of grapefruit would \ exports would increase tremendously, even in a short export increase significantly. WIlen eaten like this, grapefruit with period. Extending the marketing season could increase ex­ somewhat thicker segment membranes would be acceptable ports to Japan. The marketing of Florida grapefruit in to the Japanese. Japan starts in November. Because tl~ese fruit, however, are Advertising. Actual data on the amounts of grapefruit picked in October and so taste very poor, even a small consumed in each district in Japan are not known. It is, amount of excess import breaks the price..Florida grapefruit however, certain that the main consumption is in big cities, imported in June is poor due to over maturity and and local people are not familiar witll grapefruit yet. Many senescence. Growing practices to delay maturity, and studies Japanese also do not know the difference in taste between on storage and SIlipping methods and physiology are needed. grapefruit from Florida and from the others. Further ad- 244 Proc. Fla. State Hort. Soc. 92: 1979. vertising on these points would be important. The authors 2. ------. 1976. Food additive laws in Japan. Citrus Industry are planning to conduct a survey on grapefruit retailing in May:29-30. 3. ------. 1977. Fruit retailing in Japan. Proc. Int. Soc. Citri­ Japan, and hope to present the results to this Society in culture 3:1142-1143. the near fllture. 4. Nakamura, A. 1977. Japanese retailing and the transition of its merchandising. Proc. Int. Soc. Citriculture 2:347-350. 5. Smoot, J. J. and P. W. Hale, 1977. Evaluation of decay control Literature Cited treatments and shipping containers for export of grapefruit to Japan. Proc. Fla. State Hort. Soc. 90: 152-154. 1. Kitagawa, H. 1976. Japan as a market for Florida citrus fruit. Fla. Dept. of Cit'rus Mimeo Report. May.

Proc. Fla .. State Hart. Soc.. 92: 1979. 245