What is the new value-added business centered on high-quality fruit that Kannonyama Fruit Garden is developing by anticipating the times?

Kannonyama Fruit Garden, which has a history of over 100 years in Wakayama Prefecture, known as a fruit kingdom, does not stop at producing and selling high-quality fruits and processed products, but continues to take on challenges in many directions, such as operating harvest experiences for tourists and fruit parlors.
We spoke with Fumio Kodama, Chairman of Kannonyama Fruit Garden, about the future vision aimed at by their unique new business, which has achieved rapid growth that did not succumb to the COVID-19 pandemic, starting with the opening of their first directly managed fruit parlor in 2018.

1. What was the aim behind strengthening the sales side while building a history of over 100 years as a farm?

Kannonyama Fruit Garden is a farm that opened in 1911, but in the era of my grandfather, the second generation, we had already started exporting mandarin oranges to Manchuria and Korea, so we may have had the DNA of having a businessman's perspective while being producers from the beginning, and that may still be alive today.

Producers must never forget the position of the customers who buy and eat their products. And I believe that the strong desire that new methods beyond just production are necessary to secure customers throughout the year has driven our business development over the past 30 years, such as harvest experiences for tourists, in-house online sales, and parlor operations, toward a shift from B to B to B to C, and from the primary industry to the sixth-sector industry.

2. What was the biggest trigger for embodying such thoughts?

That is definitely the internet.

With this groundbreaking innovation, the various initiatives we had accumulated up to that point took shape all at once.

In the early Heisei era, the internet was not yet very common as a business, but I had an intuition that 'information and internationalization will be the biggest keys from now on,' so in 1989, I started using a computer myself and decided to launch our company website on the internet, which was still in its infancy.

In the beginning, sales through the website were very small, about 100,000 yen per year, but after more than 30 years, it has grown and expanded to 600-700 million yen in annual sales, and now we have a system where almost 100% of our fresh fruit is sold on the site.

Recalling the time before the internet appeared, the producer's work was finished the moment they handed the product to the seller.However, since we started selling fruit directly on our own website, we have realized two-way communication where we, the creators, can talk directly with customers, hear their impressions, and see their smiles.'We are directly connected to our customers.' That sense of reality and response is a great motivation for us, not only in sales but also in production.

3. You opened the first fruit parlor in April 2018, and in just 5 years since then, you have opened a total of 8 stores, including 2 in Tokyo.

The fruit parlor was something we pushed forward with the idea of whether we could deepen our relationship with customers and create a business where we could not only hear their voices and reactions but also see their happy faces directly.Wakayama is known as a fruit kingdom, but it was limited to production, and there were few environments where people could taste the proud fruits on the spot, so the beginning was the idea of newly providing that 'place'.

We wanted to embody the stance of producers stepping closer to the customer side. Fortunately, the first store (main store) we launched with such thoughts received great attention and favorable reviews, and we received many voices from regions other than Wakayama saying, 'Can't you let us do it too?', which led to the development of franchise stores other than directly managed stores.

4. It was just during the COVID-19 pandemic, but what was the impact on business promotion?

Exterior of the Ginza store

Interior of the Ginza store

Also, we must not forget that after opening in Ginza, the impactful topic that 'a fruit parlor directly managed by a farmer was born in Ginza' was a great help because many media outlets covered it.Since this opening, we have often been evaluated by people in various industries as being innovative as a fruit farmer's initiative, but this business is something that any farmer can realize.

As we are able to develop such businesses supported by many people, we are striving to make it widely known to people nationwide as a new business model that opens up the future of farmers, such as by actively participating in seminars in various places.

5. How are franchise stores currently being developed and operated?

Currently, the composition is 3 directly managed stores and 5 franchise stores, but it is also a point worth noting that many of the offers for franchise stores came from fruit production areas.Wakayama, our base, is a region blessed not only with the quality of fruit but also with the variety of fruits, and we can obtain almost all fresh fruits throughout the year locally, starting with mandarin oranges and lemons, but the situation is different in other fruit kingdoms.In particular, in many regions, there is a shortage of winter fruits such as citrus, so the reality is that it is difficult to sell fruit throughout the year. In short, each region has a season it is not good at, and that becomes a hole in the business throughout the year.

Since Kannonyama Fruit Parlor's selling point is its ability to provide high-quality citrus, for example, stores in Hiroshima and Okayama use local high-quality fruit while we supply fruit as needed during seasons when local produce is scarce. We have established a cooperative system that allows us to 'maintain stable operations with a sense of camaraderie' while leveraging regional characteristics.

However, we are extremely particular about brand value, and although the fruit provided at direct-managed stores and franchise stores may differ, we share the underlying philosophy of 'differentiating ourselves from others through the quality of the ingredients themselves.'

We basically provide operational know-how from our end, and a culture has taken root where if a new method is discovered at any store, it is shared with all stores.
While building such good relationships, could it not be said that we are developing our business with an emphasis on what you might call a 'solid brand and a flexible franchise'?

<Composition of a total of 8 fruit parlors developed through direct management and franchises>

Main Store, Nanki Tanabe Store, Ginza Store, Wakayama Store, Kobe Store, Okayama Store, Onomichi Store, Minami-Aoyama Store

6. Could you tell us about your future initiatives and business prospects?

Currently, about 70% of our parlor customers are from outside Wakayama Prefecture.
Under these circumstances, we are putting particular effort into our Ginza store.

The influence of having a store in a prime location in Tokyo is particularly significant, and various possibilities are already beginning to expand, such as collaborations with major companies like Matsuya Ginza and JAL, new product development in cooperation with the Ginza Honey Bee Project, and joint development with the local theme park Adventure World.

We also have a strong desire to further improve the recognition of 'Wakayama' by holding events and campaigns centered on fruit at the Wakayama antenna shop in Yurakucho, and we are currently planning new businesses involving London buses.

Furthermore, in terms of profitability, the Ginza store allows for high-unit-price sales that cannot be compared to our local Wakayama stores due to its location and customer base, so we expect it to make a major contribution to the performance growth of the parlors as a whole.

Of course, this is backed by the high quality of our parfaits and the support of a wide range of customers, so as an immediate task, we would like to aim for further improvement in brand value with the Ginza store as our flagship, while valuing the delivery and promotion of 'the real thing' that makes full use of the producers' know-how.

If we can solidify the brand by keeping our feet on the ground little by little in this way, and then re-import those results back to our home in Wakayama, wouldn't that be ideal for a franchise expansion?

Wakayama Prefecture Kannonyama Fruit Garden

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