Enhancing the global food culture

To start from a macroeconomic perspective, what are your thoughts on Abenomics and the current economic situation? What has been the impact on the food manufacturing industry in general, and on Nantsune in particular?

Looking at the economy as a whole, it has had a positive effect. However, with a more critical perspective, Abenomics is just trying to postpone things in terms of policies. The main criticism has been that the economics haven’t had a good effect on the foundation of the policy. It is not digging up the core idea of the economy. Postponing the tax rates and trying to increase the salaries have been difficult to achieve. I believe that the government has not been candid enough to the people about the reality. However, Japan is not the only country in this situation; the U.K. is going through the Brexit situation, and the U.S. is seeing Trump on the rise. It is like a chicken race; it is not about which country that is improving – it is about which country that is surviving.

As a local Japanese manufacturing company, it is difficult to create a trend or change the direction of the wind. To me, rather than creating the trend, I prefer to follow it. Brexit did have an impact on our economy as it raised the value of the Yen, and as our company deals with both exportation and importation, we are trying to reap the benefits from it the best way we can, and follow the wind of the economy.

Japan is facing an ageing and decreasing population, which means that the market is shrinking. This also means that the labor force is significantly decreasing. To us, as a manufacturing company dealing with machinery, the labor force is obviously very important, so we have had to comply with these challenges. We have utilized technology and IoT to find solutions to this challenge, and in terms of that, we are following the movement of society and the trends. It is important to have a subtle perspective when it comes to business.

Prime Minister Abe has been pushing to improve the economy while Europe is struggling and the United States is printing money. Do you believe that the reason behind the lack of growth in Japan is more global rather than a national?

Japan is a member of the world society, so the global environment does have an effect to some extent, but my personal opinion is that this effect is limited. Take the strong Yen as an example: It is not getting stronger because the Japanese economy is rising – it is because other currencies are weak. That is why Japan is standing out.

If we ask the question whether Abenomics is controlling it, I would say no. It is just that the other economies are going through a hard time. This is very important, and one of the goals of Abenomics is to export the ideologies and to have a strong effect on other economies. Abenomics is trying to stimulate both the inbound and outbound products, goods and services – how to express the “Made in Japan, Made by Japan” concept to the world. If we are able to succeed in these things, Abenomics will have a strong effect.

Last year at the World Economic Forum, it was proclaimed that the ‘4th Industrial Revolution’ had begun: AI, robotics, big data, Internet of things… This triggers the complete transformation of entire systems of production, distribution, and consumption as opposed to a single product or industry. It focuses on how those things can simplify processes in life and enhance our everyday lives. What is your perspective on this revolution, and do you see this concept opening up for business opportunities for Nantsune?

I became president of Nantsune six years ago, and this is the fourth generation of the company. When I first became president, I put a lot of thought into what Nantsune actually is producing for the client; what our service is. Indeed, our core business is food processing machinery, but we are more than that to our clients. In fact, we are contributing to our clients’ profits. We are contributing to increasing their profit and also reducing their costs, or both, even. That is why I try and think about what values I can offer our clients, and it has to do with innovation. It is not only about functionality; it is about thinking of the clients and connecting the value. This is what leads to innovation.

Do you believe that the Fourth Industrial Revolution will enhance the demand for niche solutions tailored uniquely for each client?

I definitely believe so. We are evolving into a very personalized market and moving from the standard mass production. This is especially the case in food manufacturing.

It has already been six years since you assumed position as president of Nantsune. You are the fourth generation of a company with a rich history. Could you highlight the key milestones that have brought the company to where it is today? What has happened throughout these four generations that allowed Nantsune to become so successful?

The company was established by my great-grandfather. Our origin is a sword-smith to make Samurai Sword. We started producing kitchen knives and then developed our original meat slicer inspired by a ham slicer from the Netherlands. This is the first Japanese-made meat slicer with originality and ingenuity to meet and promote Japanese food (meat) culture: suitable thickness of round knife to slice meat, motor-driven mechanism. These ideas were based on our founder’s thought.

He thought “what if we can use this machine to cut Japanese shabu-shabu or sukiyaki in order to cut the slices thinly”, and from there, the business grew further. That was in 1929. In fact, the founder handed over the company to the next heir in line quite quick, as he joined the temple to become a priest after retirement.

The second generation expanded the company further throughout Japan. Thirty years ago, we entered the Chinese market. At that time, China did not have any of those machines in the market. Expanding into China was an important step in growing the company in terms of size. It was not very common for small or mid-sized Japanese companies to enter the Chinese market at that time, nor going international for that matter. Even big companies such as Panasonic were just about to enter Chinese market at that time.

Moving on to the third generation, it was very unfortunate because the president passed away from an accident, so the handover was quick. As I assumed the position as president, I focused on the concept of contributing to our clients’ profit. We made a turn in terms of the company’s strategy. We like to say that we are exporting our technology, engineering, and consultancy abroad. In order to increase our clients’ profits, but also decrease their costs, we are providing the services as consultants. It is about management in sales; how the clients can best utilize our products in order to achieve increased profits and cutting costs.

The engineering sector is there to provide the service of the food processing factory layouts. We cannot use only one type of machinery; we deal with several in order to have an output. Instead of just offering the clients to buy our products and then start the price negotiation, we have changed our strategy. The new approach is to offer them a planning service with a sales strategy first, and then offer them the factory layout, and after that, the products of Nantsune. That is our strategy differentiation in order to maximize the value for everyone involved.

What we realized with this differentiation is that instead of lowering the cost of the actual product, we can offer our clients these services linked to the core product, and by doing so double the profit of the client. This strategy has also changed the relationship between us and the clients, as it is no longer a negotiation battle around the prices, but rather that we become their partners and together we can provide better service to the consumers. This has also led to a change in the mindset of the customer.

The fourth industrial revolution has had an impact on many sectors, and especially the food processing sector. Companies are utilizing AI and different types of technology to improve their products, and Nantsune is not an exception. We have seen that you use 3D scanners in your meat slicer machineries, for instance. Could you tell us a bit more about the technology you are using and how you utilize these innovations in order to get this closer relationship with your clients?

Most of our clients are professionals in a certain area, and this can sometimes limit their perspectives. We are trying to see things from a different perspective; it is all about turning ideas upside down and thinking outside the box in order to come up with innovative solutions. For instance, some clients may think that a certain task could only be done by human labor, but we are trying to make them think with a different perspective and create more efficient solutions for them through technology.

It is no secret that Japan is facing a shrinking population, and along with that comes a shrinking workforce. In your perspective, how much do you believe that processes like yours are going to overtake the labor market? Could this be a solution for the shrinking work force?

There is a trend not only in Japan, but in other countries as well to utilize machineries instead of human labor simply for the fact that it is cheaper. It is not because people do not want to work. This trend of shifting into automated machinery does not just apply to Japan because we are facing a decreasing and aging population. For instance, in China the wages are increasing by 10% every year. In order to cut the costs, the companies are shifting into machinery that is utilizing AI technology, and technology in general. This is a global trend.

Another important thing you touched upon, is having this 360° service that turns a business transaction into a business relationship. There is an emerging amount of companies around the world that are fully committed to having this kind of approach. What is the approach for Nantsune to create this total solution approach?

I do not consider my company as merely producing machinery or technologies. Our end goal is to contribute to the development of the global food culture; for us it is all about contributing to our clients’ profitability and also contributing to providing real fresh cuisine, to enhance the food culture of the world. In my own experience, when I was studying in the United States, Japanese cuisine was a massive trend. I tried some Japanese restaurants, but it was unappetizing, it wasn’t real Japanese cuisine at all. It is the same in Japan; you will find restaurants from all over the world – Italian, Chinese, Mexican; so, I started to question whether this is really the true taste of the food culture they provide here. I personally feel like the real Japanese cuisine is not exported enough worldwide.

Four years ago, our company partnered with a 150-year-old German meat store, and we received their recipes and spices and that is how we were able to offer the real German sausages to the Japanese clients. Our goal is to provide all these cuisines from all around the world; providing the real cuisines to our Japanese clients and contributing to bringing the real Japanese food culture internationally.

You are touching upon something interesting. It is true that German food doesn’t taste the same outside Germany, and Mexican food does not taste the same outside Mexico. Japan is trying to brand itself with its food culture, and it is true that when you come to Japan the food is mind blowing, but when you take it somewhere else it is definitely tropicalized. How can we overcome this challenge?

It is very difficult to provide the perfect scenario outside the original country, but it is possible to level up the stages. Currently, we are focusing a lot on Southeast Asia, and we are not merely selling the products there; we are starting by enlightening the local market about the differences in taste when you slice the meat thinner by using our products. It is a challenge to export the perfect cuisine to the world, but we are collaborating with different companies to tackle it. We are the ones producing the meat slicing machine, and there are companies wanting to export the Japanese Wagyu brand to the world. Working together and exporting that culture is a way of overcoming the challenge. In order to produce the authentic Japanese foods, you do not only need the right ingredients, but also the right tools, and that is where we can contribute.

When asked about your key milestones, you organized your answers by generation. As this fourth generation of running this company, what is your main objective to achieve? If we come back in twenty years and have an interview with the fifth generation, what would you like them to say about yours?

As I mentioned, our vision is to focus on the three main sectors that we have concentrated on, and on our long-term vision for 2029, when we will celebrate our 100^th anniversary. Our main goal is to contribute to the world cuisine, the world food culture. I apologize for being repetitive, but it is not only about providing products, but just as much about contributing to our clients’ profits. One case that I would like to introduce as a result is the 3D scanning product – it has become one of our most popular machines.

There was one client that wanted the 3D scanning machine, however, our employees thought they would be able to solve the clients’ problems just by changing the layout, and the output would become more. They wouldn’t need to buy the 3D machine to achieve the results they wanted, and we declined the offer. We lost profits from them not purchasing the product, but those kinds of decisions lead to a long-term relationship with the client, and also an increase in the clients’ profits. The shift towards this contribution to our clients’ profits is a very big move for us. Changing the service, the offering, is one of our shifting strategies.

There is indeed a change happening in Japan at the moment, and we can see a shift in the mindset of people. People are becoming more entrepreneurial and moving away from the historic patterns of going to university, then entering one of the huge corporations in order to stay there for the rest of their lives. In terms of this change in mind sets, what do you think Japan is missing right now when it comes to its people? What mind set should the Japanese have in order to have a confident approach for the next ten years and beyond to re-own international leadership?

Japanese people are too happy; too affluent, and they need to realize that. When I went to the Philippines, I was told that being born in Japan is like winning the lottery. I have travelled around the world and I realize that it is true. It is very safe, and it is a very high level market. We need to realize that we are lucky and perhaps not take things for granted.