Friday, Jul 21, 2017
Industry & Trade | Asia-Pacific | Japan

Food Industry Japan

Revolutionizing the food industry


5 months ago

Mr. Junji Torigoe, President of Sagamiya Foods Co., Ltd.
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Mr. Junji Torigoe

President of Sagamiya Foods Co., Ltd.

Japan is leading key developments in the global food processing industry, and Sagamiya Foods is a perfect example of a company taking tofu to the next level. We speak with Sagamiya president Mr. Junji Torigoe.

These past few weeks, international media outlets, such as Bloomberg, have questioned Prime Minister Abe’s reform agenda’s ability to stimulate the Japanese economy. What are your thoughts on this subject? What has been the impact on the economy, on your industry, and on Sagamiya Foods in particular?

There are many opinions of Abenomics and its outcomes. In terms of the economy, Abenomics has started to turn the wheels and increase stimulation, and for our sector specifically, it has been a good move as it has been encountering deflation. In the tofu manufacturing industry, there is always a discussion around pressuring prices and there are not so many options for us to decrease the price of our products.

However, since the economy has opened up, we have been able to pursue a good, qualitative product. We started by producing very traditional tofu, but now we have diversified more and more as the market is opening, and our portfolio now also includes more modern products such as granola tofu and mascarpone flavoured tofu.

 

Since its foundation 65 years ago, Sagamiya Foods has grown to become Japan’s leading tofu manufacturer. Sale have grown four-fold since the time you took over six years ago, when Sagamiya generated roughly 10 billion yen. You now aim at increasing sales to 100 billion yen. For our readers to better understand the evolution of your business and success story, could you recall some of Sagamiya Foods’ key milestones?

As you mentioned, our company’s profit has increased four times. Sagamiya started in 1951 as a very local tofu shop and has since then increased steadily to what it is today. I inherited the CEO position from my father-in-law in 2009, and I would say that one of our milestones was me becoming the president of the company. Another milestone was when we established one of the largest factories in Japan; the biggest tofu manufacturing plant.

The tofu industry is very particular; it is a traditional Japanese type of food that all Japanese people have eaten at least once in their lives – people do not dislike tofu. However, the truth is that the tofu demand has in fact been decreasing. When I assumed the role as president, I was aware that the market was going to shrink and decrease, and since it is such a traditional market, the only thing we can do to protect it, and hence prevent the market from shrinking.

What I did in order to differentiate ourselves from others was to change the mind set of this very traditional industry.

 

You said yourself that innovation is a cornerstone of your strategy, it is the key success factor of your company. There is an interesting paradox I would like to touch upon: the tofu industry is a traditional industry. One of the most striking examples of your visionary leadership is the marketing of tofu products in the shape of popular cartoons. I believe you are a big cartoon fan yourself. At that time, people laughed at you. How do you explain such success?

This brings me back to another milestone of our company. When I started to innovate and diversify, everybody laughed at me, but my personal opinion is that pursuing things people believe is ridiculous is absolutely worth pursuing. Within tofu manufacturing, there is a general saying that one should not become too big; that if you exceed 10 billion, the company will eventually go bankrupt. This is because the tofu industry has traditionally been a family business; it was run by mothers and fathers making tofu in the early morning, and so people tend to think that if you make it more business-oriented, it will fail.

When I became president, people told me that it was important for the company to grow, but to keep it “low key”. When we established the biggest tofu manufacturing factory in Japan, we had 3.2 billion in profits and we invested 4.1 billion, which, as you can understand, was more than our profits. People thought we would go into bankruptcy after this investment.

As I mentioned earlier, pursuing things that you believe in, even if people laugh or think is ridiculous, will eventually lead to success. Indeed, Sagamiya is not a big company; we are just a local tofu company with a limited budget and limited strength in our business. Yet, pursuing the things we believe in, we have seen good results. One of them is the Zaku tofu inspired from the anime Gundam – it is called mobile suit. I wanted to integrate my personal passion and hobby into the products and this is how this development was created. It is my personal favourite character from the anime. I did not create this product to expand the tofu market or to expand our tofu business; again, it is about pursuing what I believe in and what I love, and we gained many fans from this.

Tofu is part of the traditional Japanese cuisine and is eaten by everyone; young as old. It is common sense to create products that attract everyone, but this product was produced for Gundam fans, not for anyone. The expectation of tofu has expanded in these terms – by creating all these different variations, we were able to tap new markets.

 

Tofu is indeed an essential pillar of the Japanese food culture, just as anime is also part of Japanese culture, attracting an increasing number of fans, “otaku”, both young and old. Do you consider yourself an ambassador of Japanese culture as you are commercializing very traditional products while also promoting typical Japanese anime?

Supporting the Japanese food culture has always been essential. There is only so much that can be done from the very traditional products such as rice and soy, but that is what triggered us to create all these varieties of product for people with different tastes and needs to enjoy. Our anime tofu is mainly targeted towards men, whereas our granola tofu or natural tofu has a female target group. Tofu in itself is very much targeted towards women as it is a food of endurance; it has no taste, and no calories, so it is perfect when on a diet. We thought of making it tastier by adding fresh cheese, olive oil and honey.

Another thing we have implemented to gain traction, is to increase our PR activities surrounding the products. For instance, I believe we were the first tofu company in the world collaborate with a fashion event. Fashion events normally attract a lot of advertisers, but it is not so common to have a tofu company behind it. It was our dream to have models posing with our products on the runway, and the event attracted 30,000 people and became a great success.

 

One main issue in the world is food waste; I believe there is only one country so far -- France – that has prohibited supermarkets to throw away food. But it remains a global issue. Your company has been rather pioneering in the subject, and is now partnering with a weather forecast company to address the problem. Can you tell us more about what you have been implementing in collaboration with this company and what this partnership is about?

Japan has a huge problem in terms of food waste. We are working together with the Japan weather forecast company, and they provide us with necessary data. Soy is very sensitive to weather, and depending on the weather changes, the supply varies. We use this information to match with the demand and make supply offerings to the supermarkets accordingly in order to minimise waste. We receive this data from the weather forecast every single day and it is called prediction of index. Essentially, it helps us control manufacturing and ordering numbers.

Another field we are collaborating on is researching the demand and how to make changes in order to increase it. Originally, every manufacturer was independent, but now we are cooperating with the weather forecast organisation, the supermarkets, university professors etc. and utilizing artificial intelligence in order to analyse data and increase the prediction rate of the demand. Sagamiya was able to succeed in this department, by decreasing 20% of the food waste, which gained a lot of positive attention to our company.

 

Partnerships seem to be vital to Sagamiya; partnering with universities, and the weather forecast company. We also read about your recent joint venture partnership with Fuji Oil Holdings. What is the next step in terms of partnerships? Do you think this is the future of your industry – to implement new changes constantly; finding new soy related businesses or new business opportunities?

We are currently looking into developing noodles made out of tofu. Originally, this sector focused only on soy beans, and not so much on other ingredients. Our company has become one of the leading tofu manufacturers in Japan, and I believe our diversification has been key in this process. The world trend is shifting from utilizing animal protein based products to natural vegetable ingredients. It is of course from this trend that our product portfolio has expanded to also include noodle tofu, fried “chicken”, “beef” patties, etc. Utilizing these changing trends and creating opportunities from it is one of our goals.

As a tofu manufacturer, we are not able to do everything in-house. That is why we have established a partnership with Fuji Oil. They are one of the top developers of soy technologies in Japan and that’s why they are the ones utilizing the technologies and we are the ones in charge of planning and management aspects. We are working with a process called UCS. It is a process of producing where you divide the fat and the cream; you divide the other ingredients from the soy.


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