The blonde man in shorts and a baseball cap, sporting a lopsided grin and a dangling backpack and parking a rusty bicycle, looked less like a captain of industry than a superannuated college student. Yet American Chuck Grafft, 50, is founder and CEO of Foreign Buyers Club, one of the largest importers of Western consumer goods to Japan.
In a coffee shop near his offices on Port Island, Kobe, Grafft spoke recently about how FBC has helped generations of Japan-based expatriates sate their cravings for cranberry sauce, Mexican refried beans and other delicacies from home.
Grafft was originally hired to teach English to Japanese businessmen preparing for positions overseas, and arrived in Osaka in 1985. He conceived the idea of creating a business simulation-based language program for his company, which he spun into a successful multibook series that took two years to produce.
Grafft and his wife, Kelly, eventually settled in a rambling old ijinkan (Victorian-style wooden home) in the old foreign residents’ district of Kitano-cho in Kobe, which soon became a hub for visitors. “We decided that we would make a community here: We’d make friends, we’d celebrate Easter and other familiar holidays and we’d have others join us,” he said. The Graffts hosted frequent barbecues and Sunday prayer meetings, even weddings, at home, and the remaining space filled up with the arrival of four daughters within an eight-year span. “We felt that we had created an oasis in the desert, emotionally, and people thanked us all the time,” he said of that period.
With funds earned from the language program, Grafft started the Foreign Buyers Club. The impetus was simply the desire to secure American food and household goods for themselves and their friends, including baby food, Barney videos for tots, and what would become the company’s cash cow — instant macaroni and cheese. Today FBC members can fax orders or place them online, selecting fresh food from the deli section, English-language educational and children’s goods from the learning center, and canned delicacies and household products from the general store.
The idea of importing Western goods for personal use was new in Japan in the mid-1980s. Grafft explained, “If you bring back goods to Japan for personal use valued under a certain amount, you don’t need to pay customs duties. If you ask your mom to ship you things, then everything needs to be documented, and theoretically duty is applied at the highest rate for any of the items. If you want to apply variable duty rates you have to separate it all. We said, ‘What if your mom, my mom and about 5,000 other moms prepared care packages and we just shipped them together in a single container, just like the post office?’ That was the crux of our idea.”
Gaining approval took a year of negotiations with customs officials, but fortunately for Grafft, trade friction between the U.S. and Japan was heating up at the time. “The Japanese government seemingly wanted to show that they weren’t intransigent, you know, ‘You [Americans] can have your peanut butter, we just don’t want your cars.’ So in 1987 they said they would permit us to operate if we could create a system that labels and identifies every item in the container by customer, applying appropriate duty to each.”
Grafft labored for months to develop a computer program in Japanese that would do just that, testing it with an initial order for 100 customers. “It took an entire week to prepare documents for just one shipment, but the order came through and customs was stunned because everything was done exactly right.”
FBC grew rapidly in the 1990s, increasing sales by roughly $1 million each year to peak at $8 million in 1998. “At that point we had three divisions and 80 employees, including a tech guy, a customs guy, a customer service manager. But it was a struggle. I never had a vision for how the company should look; I knew what I thought it should feel like. I wanted it to be a group of people who enjoyed working together, for us to be at the heart of the community and for people to be grateful that we were here, but I wasn’t focused on the bottom line at all. I was managing like an idealist, not a businessman.”
Also in 1998, Grafft was asked to introduce the U.S. ambassador at an event at an Osaka hotel, where he was celebrated as a model Western entrepreneur in Japan. He noted, “It was one of the darker weeks of my life: Here I was treated as a local hero and people were contacting me for business advice, while the company was actually losing a lot of money. I wanted to admit that I was screwing up, that I’m not who you think I am.”
Increasingly, Grafft turned to religion for sustenance, becoming an ordained minister of an interdenominational church, the Tahoe Faith Fellowship, in 1998.
Years before that, in 1991, he involved himself and his company in a campaign to deliver goods to towns in Siberia hard-pressed by the economic and political chaos accompanying the dissolution of the Soviet Union. Between 1991 and 1994, Grafft and his FBC staff shipped more than 100 automobiles crammed with donated clothing, toys and other goods from Kobe to Vladivostok and then to needy orphanages. He recalls, “It got to the point where our staff here would ask, ‘Are we a business, or a nonprofit organization?’ I’d say, ‘Yeah, we’re a nonprofit, but not intentionally. Sorry about that . . .’ “
Grafft also became part of a Christian business group’s effort to help Mongolians transition from a state-controlled economy to capitalism, visiting Mongolia six times from 1999 to 2002.
Discomfited by the prospect of paying international school tuition for four daughters, the Graffts resettled permanently in California in summer 2002. Home is now Los Angeles, near the FBC’s U.S. shipping office, but Grafft commutes to Kobe every two to three weeks, often accompanied by his wife and a vacationing daughter or two.
In its early years FBC had an exclusively foreign clientele, but in 1996 a popular Japanese magazine featured the company in a 10-page spread. Staff members were suddenly deluged with hundreds of faxed requests featuring the same English sentence, copied directly from the article (“May I obtain a catalog?”). “We called these customers ‘the obtainers,’ ” Grafft recalled, with a laugh. Since then new growth has come mainly from Japanese members, with today’s clientele roughly half Japanese, half foreign. The company now boasts membership of nearly 25,000, on sales of approximately $5 million.
Overall, the company’s performance has tracked the ebb and flow of the expatriate population in Japan. “After the burst of the bubble in the early 1990s many people left, but we had a big incursion of financial people buying up assets amidst corporate restructuring. Our foreign membership base keeps replacing itself in terms of numbers, although individual orders have decreased in recent years and sales have been off by 5 or 10 percent since the (March 11, 2011) tsunami. Also, it has always been expensive for foreign companies to send people here, and these days they can bring in several families from the Philippines or China for the same amount it would cost for one American family.”
But despite the twin impacts of the Fukushima nuclear catastrophe and the incursion of big-box Western retailers like Costco, Grafft remains sanguine about business prospects for FBC. “We offer personalized service and people trust us to get the authentic version of the goods they want,” he said. “When you say that you want something from Trader Joe’s or Jelly Belly jelly beans, we know what you mean.” Recent growth has come from orders from international schools throughout Asia and from the company’s reordering service, which obtains and ships individual requests from the U.S., from bedroom sets and special diets, to women’s clothing, exercise equipment and over-the-counter medical supplies.
Grafft has had a turbulent time in recent weeks. In late June he officiated at his oldest daughter’s wedding. A few days later his doctor informed him that he had prostate cancer, a fact that he matter-of-factly posted on his Facebook page, hoping that friends would help pray for his recovery. The following day his father died.
Grafft said of his cancer, “This has given me an introduction to a new community of cancer patients. Community and faith have been my bywords, and they will see me through. I feel as though I’m having another spiritual adventure.”