Bio-Ral: a natural-food format built to avoid the price war (2016)

Shelves that don’t compete on price — fenced in all the way upstream

The core of this new business was that it stepped one lane sideways, off the field where the fight is over price. In food supermarkets, where location and loss-leader specials tend to line every rival up side by side, President Takaharu Iwasaki did not wade deeper into the discounting war but instead took a different demand — organic and natural foods — into the company as a format of its own. Life, which as a food supermarket had already kept its scale deliberately narrow in an era when general-merchandise stores competed on cheapness and breadth of assortment, this time carved out a still more distinctive category within food itself — a continuation of the disposition it has held since its founding: to choose an axis other than price.

A latecomer though it was, Life locked this format down vertically across three layers — store, private brand, and procurement. Making the goods on its shelves its own brand, and taking even the firms that gather their raw materials in under its capital, was done for no other reason than to build a supply chain that rivals find hard to copy. That said, for a retailer to hold the collection and wholesaling of organic produce and fresh food is also an investment premised on demand continuing to grow. How far can it turn the growth of the organic market into a durable gap over price-driven competitors? The target of $267.3M (¥40bn) by fiscal 2030 is, for now, its answer to that question.