In Search of Lost Luster
Japan’s once mighty pearl industry is diversifying
to maintain its global role.
Catherine Pawasarat reports.
SINCE TIME IMMEMORIAL,
the lustrous shine of pearls has captured the imagination and admiration of the human psyche: pearls were once believed to be solidified raindrops, and have also been known as “moondrops” and “mermaid’s tears.” It was more than a century ago that Mikimoto Kokichi pioneered the production of cultured pearls, a technological innovation that revolutionized the world of gems and jewelry. As a result, for most of the twentieth century, when people thought of pearls, they thought of Japan. In fact, until about 25 years ago, Japanese akoya pearls constituted about 90 percent of the world pearl market. But from the 1970s, a series of tectonic shifts began shaking up the global pearl industry.
Japanese technicians that had worked under secretive conditions at pearl farms in places like Australia gradually “went native,” sharing their expertise more openly and reducing overseas farms’ dependence on Japan. As Japan’s economy moved into the overdrive of the 1980s bubble, domestic labor got expensive, making akoyas pricier on the international market. Japanese pearl producers themselves started looking abroad for less costly production sites, and eventually Japanese-owned pearl farms were launched in countries like Indonesia and Vietnam.
With the wealth of Japan’s bubble economy, Japanese also developed a strong interest in non-akoya pearls. Japanese producers, wholesalers, and retailers became particularly involved in South Sea pearls, which are traditionally much larger than akoya and also include black, or Tahitian pearls.
“Japan came into the South Sea pearl trade because, during the bubble economy in the late 1980s, Japan had three things,” explains international pearl expert Andy Muller, the former president of jeweler Golay Buchel Japan. “It was by far the biggest end-consumer nation in the world, consuming over 50 percent of global seawater cultured pearls; Japan had the manufacturing know-how necessary; and Japanese wholesalers had money from the banks to go to production centers in Australia, Tahiti and Indonesia to buy the raw goods.”
Sizes 5 to 7 mm have always been the mainstay of the pearl market, since these are often a woman’s first pearls, and are common graduation or wedding presents. This used to be hallowed ground for the Japanese akoya, but naturally, this large slice of the pearl market has been too great a temptation for other pearl producers to ignore. South Sea pearl producers have worked to develop smaller pearls, closer in size to the larger akoyas. Meanwhile, China has developed its production of freshwater pearls. Though early on these pearls were inferior in color and shape, over time the best Chinese freshwaters came to rival Japanese akoyas.
“Japan’s role in the pearl world is becoming smaller, basically,” says Gary Tarna, president of brand retailer Pearls of Nippon. “From 6.5 mm and down, the Chinese pearls have pretty much replaced the Japanese akoya pearls, because the Chinese make round pearls that size, and the price is considerably cheaper. Not many Japanese akoyas are being produced over 9 mm, and at that size you have Australian pearls, which are at this point almost a better quality.”
“So the Japanese akoyas are getting squeezed out of the business,” concludes Tarna.
Could the situation get any worse? Unfortunately, yes. In the late 1990s, with Japan’s post-bubble economy slowing, Japanese akoya oyster mortality suddenly jumped, causing Japanese pearl production to plummet by at least 60 percent. Though a mysterious virus and the vicissitudes of nature are most commonly blamed for the outbreak, some concede that human activity was the spark.
“Lots of bad conditions accumulated, all man-made: pollution, chemicals, global warming. High oyster density also definitely affected the oysters’ health,” asserted Ibuki Michio, executive director of the Kobe-based Japan Pearl Exporters Association (JPEA).
Countermeasures have varied according to the producer and production region. Some have crossbred Japanese akoya oysters with the hardier Chinese akoya oyster, while others have grown more stringent in isolating their native oyster populations from oysters from elsewhere. Some producers have gone high-tech, raising female oysters in seawater sterilized with ultraviolet light, while others have lowered mortality by maintaining oysters in cooler waters for several months out of the year.
But since producing an akoya pearl takes three years from breeding to cultivation, the results are still unclear. What is certain is that no method has proved 100 percent successful, and weaker akoya oysters have resulted in lower quality pearls, with inferior color or less nacre, the luminescent deposit that makes pearls unique. In the meantime, unable to win a survival game by gambling with uncertain profits, many smaller pearl producers have been forced out of the business.
The late 1990s also saw deregulation in the Japanese pearl business, along with numerous other Japanese industries. To protect the industry after World War II (when akoya pearls were Japan’s main winner of foreign currency), the government had previously enforced quality controls and gathered statistics. But from 1998 such activities became voluntary, adding to the industry’s confusion. And without government support, most pearl producers were unable to obtain much-needed loans from ailing Japanese banks.
Pearl fashion has also taken a diversified turn, with major repercussions for the more established pearl companies.
“The purpose of wearing pearls has changed. Now people don’t wear them a few times a year on special occasions; they might wear them all the time,” reasons an executive with one of the world’s largest pearl firms. “But the difference is that now pearls are not jewelry, they are accessories, and you can’t sell them unless they are inexpensive.”
The world pearl market, then, has undergone 15 years of tumultuous change. New production centers have emerged as major players, competition has increased and consumer tastes have changed. All this while Japan has struggled to produce enough quality akoya pearls to keep some of its formerly dominant position in the industry.
Mother of Pearls
Though its importance as a pearl producer has declined, some aspects of tradition are unshakeable. Japan is not about to disappear from the global pearl business. Its experience with pearls remains unmatched.
“Kobe is still the world center today for pearl manufacturing, for value-added processes,” points out Muller. “The importance of Japan as a manufacturing center is very, very big and we have no city in the world where you have so much accumulation of know-how. It is simply not possible to come out of the blue and start manufacturing quality pearls. This is very obvious to people who really know pearls.”
What’s more, the current difficulties in the pearl business have forced the Japanese akoya producers who remain to focus on quality more than ever before. The overall quantity of pearls available at Japanese wholesale auctions in early 2003 was down 16 percent compared to the same auctions in 2002, but the quantity of highest or “first” quality goods was equal, indicating a hopeful trend.
In addition, though the world economy has remained stagnant, goods at the Japanese akoya auctions brought in prices 20 percent higher than the previous year overall, again pointing to higher quality. And, just as importantly, it indicates consumers’ willingness to pay for quality Japanese akoya pearls.
“Making pearls that can be made nowhere other than Japan—this is the way for the Japanese pearl industry in the future,” enthuses George Kakuta, director of Japanese pearl manufacturer Kakuda Pearl Corp.
And other dark clouds have proven to have silver linings for the Japanese pearl industry. Earlier this year concerns about SARS caused the relocation of three major international Tahitian and South Sea pearl auctions, from Hong Kong to Kobe. Despite the slow Japanese economy, the Japanese market is still considerable: the auctions were so successful that the three auction sponsors arranged to hold more auctions in Kobe this autumn.
“For the time being, Kobe is back in the limelight, and this is very good. Kobe can offer similar facilities and the same or even more professionalism [as Hong Kong]. Kobe can offer a larger clientele, and buyers feel more at ease, since it is home ground for many of them. In June it proved to have certain big advantages,” remarks pearl expert Muller.
Though even Japanese pearl companies are diversifying their business with different kinds of pearls, the Japanese akoya, naturally, holds a special place in people’s hearts here. By improving production, addressing environmental concerns, and rethinking marketing strategies, it’s hoped that the Japanese akoya can find a renewed role in the world pearl market. These Kobe auctions, taking place in the center of the Japanese akoya world, may provide a new avenue for akoya marketing and sales.
“We’re hoping that people who come to Japan to buy at the auctions will visit Japanese akoya companies while they’re in Japan, and buy akoya,” comments JPEA’s Ibuki. “That is something very important for us.”