JULY 1996 Edition
AGRI-FOOD
Japan is already the largest net food importing country
in the world and the Canadian government believes Japan offers unprecedented
opportunities for Canadian producers, processors and exporters seeking foreign
markets and investment opportunities.
Farming is changing in
Japan due to the limitations of the agri-food sector such as: the small size of
farms, high land costs, a high proportion of part-time farmers and an aging
farm population. The Yen has appreciated 240 per cent in the last decade,
tariffs will decrease by a third by the year 2000 and there is an increasing
acceptance of "western style' foods. In 1992, agri-food, fish and beverage
imports were US$38 billion and rose to US$52 billion in 1995. Last year, Canada
ranked only sixth as a supplier to the Japanese market with imports of under
US$3 billion, accounting for only 5.3 per cent of Japan's food and beverage
imports. Japan has 125 million wealthy consumers waiting for reliable foreign
suppliers.
DOWN AND UP
In the first five months of 1996 at least 250,000 job
cuts were announced by big American companies, half as many again as in the
same period last year. However, something odd is happening. Some of the most
enthusiastic downsizers of the 1990s--among them IBM, AT&T, Xerox, Boeing,
Chase Manhattan, K-Mart and Sears--are hiring again. Together, these companies
plan to recruit well over 50,000 workers during 1996, close to a fifth of the
280,000 or so employees that have been let go during the past few years. Some
experts claim that this is because of the success of downsizing. Companies have
slimmed down, made themselves more efficient and refocussed on their "core
competences" and can now start growing again. Others claim this is a
result of the failure of downsizing.
VALUES
Prime Ministers or Chief Political Officers are paid: in
Canada $98,000, the UK $122,000, Germany $160,000 and the U.S. $200,000. In
Singapore, he earns $780,000.
COMPETITIVENESS REVISITED
Last month we reported that the Swiss-based International
Institute for Management Development had ranked the competitiveness of 46
countries in terms of the mechanisms that help create wealth. The United States
was first, followed by Singapore, Hong Kong and Japan. Canada was ranked 12th,
after New Zealand and before Chile.
Now, the World Economic Forum, also in Switzerland, has
published a similar survey, with radically different results. Singapore, Hong
Kong and New Zealand, with small open economies with relatively small
governments, take the top three spots, with the U.S. slipping to fourth. Canada
climbs to eighth and Germany which had ranked 10th drops to 22nd. The one thing
upon which both studies agreed was the fact that Russia was at the bottom of
both lists.
MUSTARD
Canadian producers supply more than 95 per cent of the
25,000 tonnes of seed used every year in French mustard production. In Dijon,
farmers are being encouraged to grow mustard again--currently, they can make
more money with other crops.
PIPELINE
A 17-member consortium is proposing a $3.4 billion
high-pressure natural gas pipeline running from eastern British Columbia to
Chicago which will force down transportation costs, cutting a disadvantage for
Western Canadian producers. The plan is to build a 914-millimetre pipeline
stretching 3,000 kilometres that will initially carry at least 30 million cubic
metres of natural gas daily, adding about 14 per cent to exported gas pipeline
capacity. The next step is to gain regulatory approval in Canada and the United
States.
TRUCKS
Canada's transportation minister has approved the idea of
a high speed NAFTA super-highway linking Canada, the U.S. and Mexico. There are
several trade highway proposals currently vying for attention, and money, from
the public and private sectors which could cut the driving time border to
border by as much as 12 hours. Trade between the three countries now amounts to
C$1 billion daily and growing. There will be no final decision on a route until
1997 when Congress votes on a sweeping highway authorization bill.
HONESTY
According to the anti-corruption group Transparency
International, Nigeria, Pakistan and Kenya are perceived by the international
business community as the most corrupt places to conduct business among the 54
countries surveyed. New Zealand had the best reputation for honesty, followed
closely by Denmark, Sweden, Finland, Canada and Norway.
MARKETING TRENDS
According to Northwestern University in Chicago, these
are the six major shifts in marketing today:
* Mass marketing to
micromarketing. Products are being pitched to segments and niches, instead of
broad markets.
* Customer acquisition to
customer retention.
* Market share to
customer share. The idea is to attract a lot of business from a smaller, more
select group of customers.
* Standardization to
customization.
* Intermediary marketing
to direct marketing. Sales people play less of a role in selling.
* Face-to-face marketing
to electronic marketing, using Internet and other new media.
WAL-MART
This giant U.S. retailer has all but ruled out bringing
its popular Supercenter concept to Canada claiming the grocery market here is
already crowded enough. While this may be good news for grocery chains, it
means Canadians will miss out on one of the hottest trends sweeping the
retailing industry. Supercentres--airplane hanger sized emporiums that contains
a discount store and supermarket under one roof--are the fastest-growing part
of the Wal-Mart business. However, some industry observers feel the move is
inevitable. By adding food, consumers could be visiting Wal-Mart 50 times a
year. As of January, 239 Supercentres were operating in the U.S., 13 in Mexico,
two in Brazil and one in Argentina. There are presently 134 Wal-Mart discount
stores in Canada.
SAND
Miami, known worldwide for its famous beaches is running
out of sand. Officials are considering hauling in truckloads of sand from
distant mines to rebuild the eroding shoreline and keep Miami's $8 billion
annual tourism industry afloat. In some places, waves have eroded up to 270
feet of beach in the last four years and some beaches have been rebuilt a dozen
times since 1970. Officials are even considering buying sand from Caribbean
islands or mining the ocean floor off the coast.
TRAVEL AGENTS
Canada's two largest airlines are capping travel-agent
commissions, a move that is expected to drive up ticket prices and push small
agencies out of business. Airlines will probably pay agents a maximum of $30
for a one-way ticket and $60 for a round trip. A result may be that independent
agencies could be forced to consolidate into chains and charge ticket buyers a
fee to make up for the lost commission. They were capped in the U.S. last year
and some U.S. agencies now charge $15 to $35 every time they sell a ticket. In
response, travel agents are threatening to book customers into cheaper seats
and onto competing U.S. air carriers if the airlines do not roll back the cap.
Canada has around 5,700 agencies and 28,000 travel agents. Canadian Airlines
expects to save $15 million annually and Air Canada about $25 million.
ECONOMIC POWER
A new U.S. study indicates the immense economic power
wielded by the 57 million Chinese living outside China. Overseas Chinese
control economic activity which ranks only behind the GDP of Japan and the U.S.
in size. They are the top investors in Southeast Asia and account for 80 per
cent of foreign investment in China. In Indonesia, the four per cent of the
population who are ethnic Chinese control 70 per cent of the economic activity.
In Thailand, the three per cent minority controls more than 60 per cent of the
economy and in the Philippines, the respective figures are four per cent and 70
per cent. There are one million ethnic Chinese in California and in Vancouver
they now account for close to 20 per cent of the population. Their success is
attributed to the fact that they are superb entrepreneurs.
USER PAYS
A hospital in Willimantic, Conn. allows patients to pay
off their medical bills with "sweat equity"---working in the cafeteria,
organizing X-ray files, answering the phones, wheeling patients to surgery and
so on.
PENNIES
For years the Canadian one-cent coin has cost more than a
penny to produce. Under the terms of the NAFTA, the Royal Canadian Mint was
required to offer the contract for a new coin not only to Canadian suppliers,
but also to those in the United States and Mexico.
Two U.S companies
submitted the lowest bids for the contract and when they go into production on
Canada Day they will reduce the cost of a penny from 1.4 cents to 0.9 cents. By
significantly reducing the copper content, the Mint expects to save $3.4
million a year without affecting the 20-year life of the coin.
RECYCLING
The U.S. Parks Service, which must sometimes remove
large, dead animals swiftly from locations such as recreational areas, has
determined that nine kilograms of explosives will disperse a carcass, while
obliteration takes 25 kilograms. The most important safety tip is to remove all
horseshoes beforehand.
CHARITY
Giving to U.S. charities rose more than 10 per cent to
nearly $144 billion in 1995 as American generosity surged, spurred by a stock
market rally, higher wages and talk in Washington of ending tax breaks which
prompted people to give more. The increases resulted in 17 per cent more in
donations to philanthropies that help society and the public, including
research institutes. There was a 12.5 per cent increase to environment and
wildlife groups, 9 per cent more to health groups and 8 per cent to educational
institutions. Personal giving rose 11 per cent while corporate contributions
rose about 7 per cent.
LOSSES
Bad cheques and shoplifting account for the bulk of the
U.S. retail industry's $26 billion in yearly losses. However, it is estimated
that "return fraud"--purchasing goods with the intention of temporary
use--accounts for $1 billion. USA Today reports that stores want to crack down
on such brazen "borrowing" tricks as returning electronic gear after
a vacation, expensive clothing after party season, air conditioners after a
heat wave and computers after term papers are written.
WORK
For Canadian workers, the average length of a new job was
3.8 years in the period 1981-85, 3.4 years in 1986-90 and 3.8 years again in
1991-94. However, in 14 years the average job length declined significantly for
workers over 45 and for workers in Atlantic Canada both of which had
exceptionally large declines in the proportion of jobs which lasted beyond one
year.
PSYCHOLOGY
According to the New York Times, supermarket shoppers
will buy more soup if the varieties are shelved out of alphabetical order. If
stacked alphabetically, sales drop 6 per cent.
CORDON BLEU
The U.S Army has developed a pound cake that is tough
enough to survive a fall from an airplane, can withstand temperatures from 50
to -50 Celsius and will last for years.
OLYMPICS
According to the Medical Post, competitors in ballroom
dancing, a new sport at the Olympic Games this month, have been warned that
they may have to give specimen samples for drug testing after their routines.
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