At the Irvine office of Fancl International Inc., workers spend about half their time fielding calls from Japanese expatriates familiar with the Tokyo-based company’s line of natural cosmetics.
While President Gen Inomata welcomes the business, his goal is to expand sales beyond local Japanese already familiar with the company.
“We are struggling against the market where nobody knows our brand name,” Inomata said.
But Fancl has hit upon an unlikely inroad with U.S. consumers. The com-pany’s fastest-selling product here isn’t its additive-free make-up, cleansers or lotions. It’s green tea, the Asian staple long touted for its potential health benefits.
Fancl, which counts annual U.S. revenue of $1.2 million, saw green tea sales more than double in the first quarter vs. the last three months of 1999. Inomata attributes the increase to the launch of the company’s Web site and new interest in green tea among Americans.
About 95% of Fancl’s green tea customers now are non-Japanese, Inomata said. Many of them have invented their own original recipes using green tea, he said.
“Unlike the Japanese who enjoy the flavor of the tea, Americans blend our green tea into milk, yogurt and tomato juice,” Inomata said.
But Inomata hopes to make Fancl known for more than just green tea here. He sees green tea sales helping to establish the Fancl brand. From there, he’s looking to sell Americans on Fancl cosmetics.
In Japan, Fancl has $500 million in annual sales. While that trails Japanese cosmetics leader Shiseido Co. with $5 billion in yearly revenue, Fancl has carved out a niche with Japanese consumers concerned about what’s in the products they’re using.
In Japan, Fancl sells its products via mail-order catalogs. About 85% of Japanese women are aware of the company’s brand, Inomata said. Fancl also makes health food, with 70 different products on the market.
Fancl has been selling its skin-care line from Irvine for the past three years. Wives of Japanese expatriates working for companies such as Toshiba Corp. in Irvine or Mitsubishi Electric Corp. in Cypress account for much of the office’s cosmetic sales. Some sales come by way of Japanese students attending Orange County universities.
Fancl introduced its green tea here last year. It’s available via mail or on line, where buyers can shop in English and Japanese. A box of 30 green tea packages goes for $12. Fancl markets the tea as a once-a-day “39 cents (per drink) health method.”
Fancl’s Green Tea, which is sold in powdered form, is made from Japanese tea leaves and buds processed at low temperatures, which preserves the ingredients, Inomata said.
Green tea is catching the attention of health-conscious Americans because of its touted benefits. The tea is said to have ingredients that fight cancer, and lower blood sugar, blood pressure and cholesterol levels, though none of the attributes are scientifically proven.
Fancl chose Southern California for its U.S. headquarters because of the large Japanese community here. The parent company started in 1981 as a cosmetics company. Fancl founder Kenji Ikemori first developed the additive- and preservatives-free skin-care lines for women with sensitive skin.
In 1994, Fancl expanded its product line to include natural food products. Today, the company employs nearly 600 people in Japan.
Fancl develops and makes its own products at research centers and factories in Japan. The products are delivered directly to customers or retail chains, cutting distribution costs, Inomata said. Products sold here are flown from warehouses in Japan.
For now, Inomata said Fancl has no plans to try and break into U.S. department stores, supermarkets or boutiques. But down the road, Fancl may consider opening its own U.S. retail shops, he said. n
