LYNN NEARY, host:
I have here on my desk a pile of Kit Kats. Now you know them as those yummy classic chocolate wafer candies. But these are different. These Kit Kats come in brightly covered packages and they're covered with Japanese characters. That's because you can only get these Kit Kats in Japan. And the amazing thing about them is they come in all kinds of flavors. Not tame run-of-the-mill flavors. These are weird flavors like wasabi or soy sauce. In fact, I think I'm going to try one of those weird flavors. Let's see, cantaloupe with melon. And here's ginger ale. I wonder if that fizzes. I'm going to open that up. Hold on a sec. Ginger ale.
(Soundbite of candy wrapper)
(Soundbite of crunching)
NEARY: Ooh. Now that you can taste the ginger in. It's actually pretty good.
Now you have to wonder why a company would churn out all of these flavors. So to help us figure this out, we called Lucy Craft. She's based in Tokyo.
Good morning, Lucy.
Ms. LUCY CRAFT (Journalist): Good morning.
NEARY: We were wondering, is there a sushi flavored Kit Kat by any chance?
Ms. CRAFT: It could be on the way. I haven't heard of one yet. But Kit Kats have been sold in Japan since the 1970s, but it wasn't until about a decade ago when they started to come out with these unusual flavors and they're up to about 200 by now.
NEARY: And what made Kit Kats introduce these different kinds of flavors in Japan? I don't think they do it in any other country, do they?
Ms. CRAFT: No. apparently Japan is sort of the center of strange flavors. The story of Kit Kat in Japan has less to do with chocolate than with the peculiar Japanese retail system.
NEARY: And how is that retail system different in Japan?
Ms. CRAFT: Yes. As you know, the convenience store is an American creation but the Japanese have taken it to a whole different level. They're about 40,000 convenience stores in Japan so that there's so many that rival shops often are located right across the street from one another and that's why the Japanese convenience stores has become probably the world's most Darwinian marketplace.
The shops are tiny. The sales of every item are monitored with scientific precision. And to win just a few inches of shelf space, every single item has to sell within a few weeks or it's history.
I spoke with an American marketing expert named David Marks and here's what he had to say about convenience stores in Japan.
Mr. DAVID MARKS (Marketing Expert): So it's almost like a war zone. Makers have to destroy their competition by creating a product that appeals to the people who are making the decisions at the convenience store of what to put on the shelves.
NEARY: So does that mean that it's not just Kit Kats that come up with these sorts of strange flavors or marketing packages?
Ms. CRAFT: Yes, that's true. This is prevalent throughout the Japanese food industry. But the toughest gladiator arena for flavors you might say, is in the beverage industry, something like 1,000 new flavors are unveiled every year giving us wonders like, oxygen-enhanced water or cucumber-flavored Pepsi.
Here's David Marks again.
Mr. MARKS: Very strange cycle of makers having to pump out all these flavors that they know will be impermanent, and I think a lot of people will say well, you know, Japanese culture loves impermanence, but with these products, it's probably a huge financial strain on the makers that have to come up with these short-term, crazy things that they know will not create a lasting market.
NEARY: Well, how true is that that the Japanese culture like impermanence? Is the Japanese consumer really that different from other consumers, from American consumers?
Ms. CRAFT: Well, the manufacturers, you know, perhaps to be politic, they'll say that they're catering to the Japanese cultural idiosyncrasy. Some people say less charitably that Japanese consumers are just suckers for limited edition products.
Here's David Marks again.
Mr. MARKS: You know, the root of it is the demand. That has nothing to do with consumers at all, but convenience stores forcing companies to basically make crazy products in order to win shelf space. So again, the goal is to appease the gods of the convenience stores rather than to appease the consumers.
NEARY: So Lucy, I have heard that these multi-flavored Kit Kats are really popular with kids, they're kind of trendy with kids. Is that right?
Ms. CRAFT: Yeah. I mean these candies, they're very inexpensive. They're about a buck a piece and kids are the ones who kind of spend a lot of their free time hanging around in convenience stores. Also, Nestle Japan, which markets Kit Kats in this country, has been very clever about marketing at kids who are cramming for exams, which could be kids anywhere from elementary school to high school students cramming for college exams. And as any kid grinding for school knows, you get this terrible oral fixation and you have to be munching on some kind of a snack. So Kit Kat is essentially the snack of exam crammers.
NEARY: And very smart marketing.
Ms. CRAFT: Yes.
NEARY: So is the competition among retailers there now even more intense, given the sluggish economy?
Ms. CRAFT: I think in some ways the competition has peaked in the flavor realm. Competition has been shifting more towards price cuts. Also, since Japan is already oversaturated with convenience stores, and the number of consumers here is declining, we're seeing convenience stores focus more on aggressive growth in the rest of Asia.
NEARY: All right. Well, thanks so much for talking with us, Lucy.
Ms. CRAFT: Thank you.
NEARY: Lucy Craft is a reporter based in Tokyo.
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