FamilyMart: A slice of Japan at your corner store
She is making onigiri — a Japanese snack made of rice, seafood filling and wrapped in seaweed — and her hands are moving so fast. One hand is holding a rectangular sheet of seaweed and the other is lifting a similarly shaped ball of rice, which she wraps at an incredible speed. The only thing you can see of her is her eyes because her head is covered with a white cap — not a strand of hair peeping out — and she is covered in white overalls and an apron.
She is one of 380 Filipinos working at the FamilyMart Central Kitchen in Yokohama, Japan, which employs 984 people, 500 of whom are non-Japanese. Family Mart has several Central Kitchens in Japan and this one in Yokohama, operating 24/7, is the biggest, supplying 391 stores in Tokyo and Kanagawa (a city south of Tokyo), which receive deliveries three times a day. This means the bento boxes and other prepared food customers get, whether for breakfast, lunch or dinner, are always fresh.
FamilyMart, which began operating in the Philippines in 2013 in partnership with SIAL CVS Retailers, a joint venture firm between Stores Specialists Inc. and Ayala Land Inc., offers a slice of Japan to local customers by offering prepared bento boxes and other food items, beverages, ice cream, and FamilyMart-branded snacks.
To get a glimpse of how the giant convenience store in Japan manages a seamless, well-oiled operations in its home country, we tour its three-floor Central Kitchen just outside Tokyo — but not before undergoing two strict hygiene controls and “body vacuum” (they literally vacuum your clothes to remove lint, dust and other dirt before you scrub your hands and put on overalls, masks, boots and caps, and then you are vacuumed again).
Japanese laws for hygiene and quality controls are very high and it is thanks to a culture of discipline and technology that everything runs smoothly — even with such massive operations.
In the Central Kitchen, there are 17 assembly lines with the biggest one having 15 people on both sides. It is perhaps the spaghetti section that has most workers, where one person puts the pasta on the container after weighing it, another person the sauce, the cheese, the pesto and the cover, before a machine takes over to shrink wrap the box. This assembly line, incidentally, is made up of chatty, cheerful Filipinas.
As much as everything is mechanized — rice, for instance is washed, measured and cooked in large vats running along a huge machinery — human hands (gloved ones of course) play an important role in the details.
The FamilyMart ham and lettuce sandwich, for instance, is one of the stations workers in the Central Kitchen are not very fond of because it is hard to do — the lettuce leaves have to be folded and arranged in an exact manner between slices of ham and loaves of bread. And we mean exact.
But why bother on such a trivial detail in a sandwich when there are literally 300 other food items delivered to FamilyMart stores every day? Because, as anyone who has ever seen Japanese packaging knows, that’s how they do things over there.
FamilyMart now has more than 50 stores in the Philippines and aims to increase its network to 100 by the end of the year, and 500 stores by 2018.
Masaaki Kosaka, managing director of the international business division of FamilyMart, says they will also be open to franchising by the end of 2014. In fact, since they opened last year their local partners have received more than 300 serious inquiries about franchising.
SIAL CVS Retailers president Anton Huang says, “FamilyMart is the right fit for talented entrepreneurs who want to break into the convenience store business since we offer lucrative opportunities that are backed by a family culture that places high value on support and growth.”
Established in 1970, FamilyMart is the first Japanese-owned convenience store in the world and is currently the second biggest globally with 20,000 stores including stores in the Philippines, Taiwan, Thailand, China, Indonesia, Vietnam and the US. It has 9,000 stores in Japan and make up 20 percent of the market and is a US$25 billion business worldwide.
FM Philippines general manager Ed Paredes says that its culture rings well with the Filipino market. “The name FamilyMart captures the idea that the customers, stores and its franchisees are bound by a familial relationship that encourages us to grow together. This is what we offer entrepreneurs who want to partner with us. The secret to our success is the fun in everything we offer. From the packaging to the presentation, and down to how we sell, we make sure our products give customers a rush so that they’re excited to select and purchase. Filipinos are big on fun and this is why we have consistently gained loyalty after just a year of operations. We want interested franchisees to be part of this store experience as they operate their own FamilyMart. ”
Masaaki Kosaka adds that it is a collaborative relationship between the headquarters in Japan and its local partners, and they have transplanted successful business model that have made it a success for more than 30 years in Japan.
Kosaka says that franchise support includes brand awareness and advertising support from the headquarters, regular visits from the Japanese supervisor from Tokyo and area manager from the Philippines for consultations on how to increase their sales, and IT infrastructure and service. “So the franchisee can concentrate on store operations and not have to worry about the back office. From our experience with local partners, on the average the ROI for franchises is between two and four years, depending of course on the country and the economic situation.”
The Philippines, says Kosaka, has all the right things going for it — a young population, a consistent GDP growth, offices like BPOs whose employees require 24/7 convenience stores — and two partners with expertise in retail (SSI) and mall/real estate development (Ayala Land).
While he admits that FamilyMart is a little late in entering the market (it is the third global convenience store chain and several more are coming), Kosaka says there is much room to grow. In Japan, with its thousands of convenience stores across the brands, the equation is something like 2,500 people per one store. If you apply the same formula to the Philippine population and existing convenience stores, it’s 42,000 people per one store. “There is still a huge space to grow. To become number one in a market we need at least 30 percent market share. That is our target.”
Kosaka adds, “We are operating in different countries and get best practices from each, such as nice comfortable eating space that you see in Taiwan and Indonesia, and the availability of a restroom for customer use like we have in Japan — that was one request we made to our local partners, that when space permits, for each FamilyMart store to have a restroom that customers can use. Thirty years ago, it was unheard of in Japan, but now almost a hundred percent of our stores have it.”
Thinking about the customers’ convenience is a core value of FamilyMart, he says. “That is what FamilyMart is all about.”
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For franchising inquiries, call 625-5701 local 301.
