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Noritsu America's 30th Anniversary Opens the Nostalgia Door


Jerry Lansky is president of Minilab Consultants. Tel.: (732) 946-8484. Email: Jlansky@att.net.
noritsu QSS-3501
noritsu QSS-II

The early days of the one-hour industry were very similar to the early days of the auto industry. Henry Ford introduced the Model T in 1908 and made it until 1927. In 1920 you could have bought one for $300 and, as they said, you could have had it in any color-so long as it was black. Nevertheless, it kicked off an industry.

In September 1978 the doors were opened to a small operation in Compton, CA, for the distribution of a machine designed to perform a task that had never been done before: develop film and print photos in one hour at a retail location. It was the Noritsu QSS-I, soon to be followed by the QSS-II, and you could have had it in any color-so long as it was beige and maroon. Like the Model T, it kicked off an industry.

If you don't remember the QSS-II you haven't been around very long. If you do, you're probably out fishing or looking down from On High. Best estimates are that about 10,000 were sold in the U.S. and it was the only model Noritsu offered for 6 or 7 years.

Today, according to a Noritsu source, there are no QSS-IIs to see at any Noritsu office here, though I'm told there is one on display "behind velvet ropes" at Noritsu Koki's 178-acre campus in Wakayama Prefecture, Japan. You don't have to go that far, I'm sure, as there must be a few still in operation at retail here.

Why all this nostalgia? This is the 30th anniversary of the establishment in 1978 of Noritsu America Corporation­-though the parent firm, Noritsu Koki, dates back to 1961-which moved its headquarters from Compton to Buena Park, CA, in 1983, increasing its original staff of about 5–7 people to its current 450 employees there and in its Eastern office in Fairfield, NJ. For many years, Noritsu minilabs dominated, and I'm told at one time had a 90% share of the market. They held the number-one position until the Fuji Frontier was introduced in the mid-1990s and became the model of choice for Wal-Mart and other chains.

Today, Noritsu is the last major minilab manufacturer standing. Gone are such formidable names as Copal, Hope, Agfa, Konica, Gretag, and Kodak. Though Fuji is still offering the traditional minilab system to the marketplace, its machines are being made under contract by Noritsu.

(KIS/Photo-Me also makes traditional minilabs and its digital DKS labs. Unique in many respects, they're the choice of CVS and some indies; besides CVS, their numbers are small.)

It was fun to connect with some of the "old-timers" for their recollections in preparations for this column. One of the oldies was me. My wife, Joan, and I read in The New York Times about a Dr. Bruce Frome, a practicing physician in California who started a franchise chain, Fromex, that was developing film in one hour. (A few independent Fromex stores are still in operation in California.) That idea sounded pretty intriguing to us. We ended up building eight labs in New Jersey, seven of them with Noritsu QSS-II. (The other had a Copal 104 that was already in a store I purchased.) My first store opened in 1981 and was the only freestanding one-hour lab in the state at that time. The QSS-II cost me about $135,000 and, hold on, because the prime rate was then 18%, the interest on my equipment lease was 22%. Ugh.

At the time, there were three labs available to us: Oriental, Fuji, and Noritsu. Oriental's only office was in California and wouldn't be able to help a nonphoto neophyte like me who'd be on the phone five times a day. Fuji had an office in the Empire State Building and only a minimum service/parts presence. Noritsu had a local office in Ramsey, NJ, with service specialists, a parts supply, and a training program. No big decision.

As sophisticated as we felt these machines were in those days-and they were-by today's standards they were crude. Setting up the store meant digging up the concrete floor to install a spiderweb system of underground pipes to handle all of the water that overflowed the film and paper wash systems. Water usage per year: 1 million gallons. An electrical contractor brought additional power in from the pole on the street. An entire room was devoted to the transfer of chemicals into mixing tanks. (Don't ask what the floor looked like after a few developer spills.)

As you can see, newbies, in those days we had no systems that were washless with onboard chemistry and plugged into any 115-volt outlet. These features are taken for granted now. Then again, so are windshield wipers, color televisions, and refrigerators that make ice rather than just storing it.

Despite all of the hurdles, the one-hour on-site industry was born, thanks to Noritsu and the independent entrepreneurs who had the guts to invest big dollars into an idea and their dreams. If not for these pioneering independents and their success, photo processing might still be relegated to large wholesale labs that returned photos to countless drugstore and supermarket counters when they felt like it-usually a week.

The number of indies grew to between 12,000–15,000, and their success was also their downfall as they drained away the processing business from the over-the-counter retailers who finally realized-in the early 1990s-that since they couldn't beat them, they might as well join them. Because of the greater simplicity of the newer systems from Noritsu and others, and the desire to protect their turf, these major retailers began installing on-site minilabs by the thousands.

The results of the huge number of installations at mass merchants and the subsequent introduction of digital photography led to dynamic changes in the industry: the number of independent labs has dropped to about 2,000, give or take; major wholesale labs, once numbering in the hundreds, are now less than 20; the number of customers purchasing on-site labs has dwindled, with most decisions now being made in corporate meeting rooms rather than in a small office in the rear of a retail store.

Noritsu has managed to be a survivor in a long road littered with bygone brand names and is here to celebrate its 30th. How have they managed to endure? Some of the insights of those that were there in the early days may tell the tale of what it takes to make it.

The opening of NAC offices in 1978 coincided with the PMA convention that was held that year at the Conrad Hilton Hotel in Chicago. Sid Davidowitz, who has held a variety of responsibilities with Moto Photo and runs his own two Motos in New Jersey along with an innovative digital-oriented store, The Picture Spa, recalls that convention. It was his introduction to Noritsu: "All I saw was this big monster of a machine surrounded by lots of Japanese men in white coats. I also saw Ed Ritz, who said he was the Noritsu distributor for the U.S." Along the way, Sid's records show that he purchased 13 different Noritsu models for himself and Moto Photo franchisees.

This was news to me, so I checked into this and spoke to David Ritz, CEO of Ritz Camera Centers: "Yes, we were the distributors for Noritsu for about one-and-a-half to two years and sold machines to other dealers until they decided to open Noritsu America. We sold a few hundred machines.

"I think we installed the first Noritsu lab in the country," David added. "It was a QSS-I, and we put it into a Ritz store about a block away from the White House." He remembers his first trip to Japan and being picked up at the airport in a Rolls-Royce by the founder of Noritsu, Kanichi Nishimoto. In the early days, all Ritz stores had Noritsu. Today: none. Fuji's Frontier eventually won out.

I bought my first machine from Jerry Vaniman, the Noritsu sales manager at the time who subsequently went on to open his own business in California, Minilab Supply Co. Though few may remember Jerry, most of the trade knew Noritsu through Joe Leach, who joined NAC in 1983. He was the man who was the face of Noritsu and mixed with folks at all levels of the trade. Joe retired in 2005 as executive VP of NAC and is now tending to his horses.

I asked Joe if he remembers who his earliest customers were. "You were," he said. In those days the Noritsu customer base was primarily the independent lab. "The independent was the mainstay of our business," he said. "Without them, there never would have been a one-hour industry." I was flattered to be remembered by Joe as a customer, not a prying PTN journalist.

What did Joe feel was the reason for Noritsu's success over the years? "We had excellent facilities that resulted in low manufacturing costs, offered fair pricing and sound business management, and we were always moving very cautiously."

Harry Loyle, now president and CEO of Moto Franchise Corp., bought his first Noritsu, a model 701, for his store in Northfield, NJ, in 1985. He credits Noritsu with "the birth of an industry." In the high-flying days of Moto in the late 1980s, Noritsu was the equipment of choice, according to Harry.

Ron Koch, now retired, was responsible for the photo operations for Eckerd Drugs. He recalls buying his first Noritsu, a QSS-II, and installing it in a Seminole, FL, Eckerd store, close to his HQ where he could keep watch. "With all of the piping and the size of the machine, we needed 1,200 sq. ft. to open a department," he said. "We did so well in the first year that we opened five more locations, and before long had on-sites in 150 of about 1,000 Eckerd stores. Once washless came in, all we needed was 250–300 sq. ft. for a model 901 setup."

At the time, Eckerd had its own central lab, and, according to Ron, he pioneered the 4x6 print at a time when the universal size was 3½x5. He promoted the 4x6 from the overnight lab or two sets of 3½x5s in one hour at 29 cents each. (Now we know who to blame for the idea of double prints.)

Ron said, "Noritsu always had their ears to the ground. Whenever we went to a PMA, they always had something new to show us. Noritsu was the Honda of the finishing business, as they always had parts on hand to fix machines. They were able to support us as no one else in the industry could at that time."

He recalled meeting with Mr. Nishimoto in Japan in 1998 with a long list of suggestions as to what should be done in the future. "He gave us everything we asked for," Ron said.

Bill DiMinno has a unique perspective from which to view Noritsu: he served as GM of Noritsu's eastern region for two years and spent 15 years competing with Noritsu as senior VP of Fuji, retiring in 2003.

"They were king," he said. "They had the whole market. As a competitor, they always played it straight and were above board. Very ethical operation." Of course, when Bill was at Fuji, he developed the successful program for the Frontier that caused Noritsu so much agita.

Today, estimates are that Noritsu has about 10,000 systems operating at retail locations in the U.S. Its biggest chain customers are Target and Costco, though I would guess there aren't many mass chains that don't have some Noritsu equipment on stream. Many of these installs came as a result of Noritsu's close arrangement over the years with Kodak, who was happy to supply paper and chemicals for Noritsu machines, allowing Noritsu to offer a complete package in competition with such full-line suppliers as Fuji, Konica, and Agfa.

The 30-year history of Noritsu in the U.S. was built around the success of the minilab using wet chemicals, a market that's rapidly disappearing. The dry lab is the equipment du jour. Noritsu was ahead of the market when it introduced its dDP-411 at PMA 2003, an inkjet system incorporating an Epson engine. It was probably developed as a result of the scare of an inkjet product from Phogenix (remember them?).

Since then, Noritsu has had three generations of inkjet dry labs, its most recent the D701, which incorporates most of the features of a full-service wet lab, including a sorter and 10-inch paper capability.

The competitive scenario has changed with the switch from wet to dry with new names playing the game. Noritsu expects to move smoothly from wet to dry.

As the crew at Noritsu America Corporation celebrates its 30th, I hope they put an extra candle on the cake-the one for good luck.


MOTO PHOTO FOUNDER "DISCOVERS" NORITSU

Sid Davidowitz is a Moto Photo franchisee in New Jersey, and he passed along this story of how Moto got started:

"John Hazelton, the founder of Moto Photo, decided to get in the one-hour business while on vacation in the early 1980s. He wanted to have some film developed and found a long line at a local one-hour lab. His recalls that customers on line had 'film in one hand, dollar bills in the other.'

He looked around and got the brand name off the machine. When he returned home, he called Noritsu and asked about ordering a system to be shipped to Oklahoma. The salesperson told him there was a six-month wait. After realizing the demand and supply, he decided there was money to be made, so he increased the order to six machines.

This was the beginning of Moto Photo."


   







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