Monday, Dec 18, 2017
Others | Asia-Pacific | Japan

Bourbon Corporation

Value-added foods feed into social wellbeing


1 year ago

Yasushi Yoshida, President of Bourbon Corporation
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Yasushi Yoshida

President of Bourbon Corporation

Involved mainly in the manufacture and sale of food items, particularly its popular confectionary lines, Bourbon Corporation is developing at least three new products every month and also has dealings in the insurance agency business and market research. President Yasushi Yoshida attributes the company’s success to its unwavering commitment to contribute to society and taking a long-term view of its activities, and here also shares his belief in ethical business practices and the company’s aims of entering the US market.

 

Could you tell us a bit about your interest in nutrition and health?

I would like to start with mentioning that I was born in 1955, which means I do not have any experience of starving for food. I come from Hiroshima City, so as you are aware, I was a victim of the nuclear bomb. My father's parents and his brother died instantaneously, and also the sister of my mother died in the aftermath of the bombing. Because of my upbringing, I have always been living with an idea of peace.

I attended Nagoya University, which is part of the old Imperial University Group. Nagoya University is one of the newest members of this group, which can be compared to Ivy League in the United States. This was established in the 14th year of Shōwa era and this was right before the war. There, I studied agricultural science with a focus on nutritional chemistry, and at that time, we could not experience on human beings so all our experiments were done on rats. I studied the effect of sugar and the fact is that the enzyme to digest sugar is secreted one day after the intake, which is a very strange or miraculous effect that human beings have.

The seed for my peaceful thinking was implemented in Hiroshima, and my interest in nutrition and health was implemented in Nagoya. Then, I ended up in Kashiwazaki, Niigata Prefecture, where I started the company to manufacture biscuits and food. My friends in Hiroshima used to make fun of me because I don’t like cold weather and I was gradually going further and further up north – from Hiroshima, to Nagoya, and then to snowy Niigata Prefecture. Not so many people have taken this course.

I tell the youngsters of my company that this company, Bourbon, was founded on the thinking that we would like to contribute to society after the Great Kanto earthquake. People say our main industry is biscuit or confectionery or food, but it is not that. Our main business is to contribute to society.

 

For over 92 years Bourbon has really been a leader in your industry. Last year, you posted an impressive 105 billion yen in sales. What would you attribute this growth to? How did you achieve this fantastic result?

I am the fourth generation president, but I think the third generation president had lots to do with this expansion. We came up with this big hit product that changed the market entirely. It has been 40 years since it was launched and it has doubled our sales from 20 billion to 40 billion yen.

 

Can you outline what your objectives have been, your milestones for the last 20 years and more importantly, what the future of Bourbon looks like? What are your top priorities to continue with this growth?

Yes, that is correct, but in order to expand the scale, of course, the best thing is to have a big hit product. During those 20 years, we have not grown that significantly; however, what I have been focusing on is the change of the inner structure and the mentality of the company. This becomes especially important now that the new generation, with different sets of values, is about to take over the company. We really have to focus on the change in corporate structure. What is special about our company is that we have come up with the machines to manufacture each product line, and in that sense we are very creative. Many manufacturers in Japan, even if they were to import or purchase the machines from abroad, most of them have to improve the performance of the machines before using them.

In the confectionery industry before us, manufacturers changed the structure of the industry itself – the retailers had set the standards for our industry, so it was difficult for us to change the structure of the industry. When I took over 20 years ago, all our products were aimed at selling in supermarkets. There was nothing in convenience stores. After that, we came up with this product line and this is what led us into the realm of the convenience stores. Nowadays, we co-develop products for convenience stores. The manner of product development has changed.

I think the most significant difference between Japan and the US and European food market is that in Japan the change of customers is very fast, especially for confectionery. Many brands normally do not change, but as far as confectionery is concerned, there is a rapid change of trends.

 

Bourbon does an excellent job of branding its products. Why do you think such international heavyweights like Disney have chosen Bourbon as their partner of choice here in Japan, as opposed to another Japanese confectionery company? What separates you from your competition?

Well, first and foremost, our emphasis on quality, and in addition to that, we are also providing products for vending machines. We have gotten special permission to put our products in vending machines. We started with the Maihama Station that is the station for Disneyland and Disney Sea. Now, we have expanded to many other locations.

I think another reason that Disney and convenience stores have chosen us is that our product development, the procedure is in full swing. We take great measures for product development. In Japan, consumers are always requesting new products, and that is why we come up with at least three new products per month. In order for us to keep up this product development, we needed about 100 employees to develop the manufacturing machines, and the same amount of manpower to develop the products themselves. On top of that, we also have the full line of products, from biscuits to chewing gum, which allows us to be probably the number one in the world in terms of product range.

As a manufacturer, it is easier just have one product and focus on that one product, but the trend in the retail market is that you have to differentiate yourself from your neighbors in terms of the products you are carrying. We are able to cater to such demands from the retail market and that is why we are developing at least three new products per month. The reality is that this is the minimum; normally we develop more than that and I believe this is our strength.

 

The main push of Abenomics was to internationalize the Japanese economy. Bourbon embodies this with your global push that first started in China in 2007, which is unarguably the biggest snack confectionery market in the world. Can you outline your further globalization priorities and when I can expect to buy your products in America?

In fact, you mentioned the United States, and we are at this very moment negotiating with a retailer to develop products for them, but we are still finalizing pricings and other details before everything is ready. Of course, the biggest problem is exchange rates, so it depends on how the exchange value goes.

As I mentioned, one of our biggest strengths is that even within the same product line we have many varieties in flavor and taste. This is especially important in a market such as Japan, where the consumers are sensitive to the changes of the four seasons, and depending on the season, they prefer different types of products so we have to adapt and cater for that.

 

The TPP under final implementation will of course have a dramatic impact on American-Japanese relations, and of course, the Asia-Pacific as well. As you are looking to expand to America, do you anticipate the TPP to have a positive boost to your global push?

We have to accept the TPP and think positively about it. Now, we are thinking about how we can maximize the positive impact of the TPP. However, my personal opinion is that there is one problem. What we see is a Trans-Pacific Partnership, but the US, Canada and Mexico have the other side of the country as well. If it only covers the Pacific Coast area that would be nice, but there is the Atlantic Ocean part as well, so I believe those three countries will be the ones benefitting the most from this agreement.

There are so many things we can say about Abenomics, good or bad, but the biggest challenge we have is the declining population. Unless the government comes up with a policy to stop this trend, all the other policies will be merely a short-term solution. In fact, there are many ways to treat this problem. In the United States, they had a planned increase in population by accepting immigrants. Looking at the situation in Europe, what they are doing is difficult to assess the impact of just yet. However, I believe in Japan, those kinds of solutions would not work, so how do we deal with the declining population? I believe the young generation will just have to work hard.

We really have to keep up our GDP and then deal with the declining population. We just have to come up with something that will enable us to maintain or increase the GDP per capita. I think in the retail industry, they have finally realized that discounting everything is not a good solution when the population is declining. This will only work when the population is increasing, so I believe their structure, their mindset is changing. We can see the new trend in the retail industry. For example, in the past when the economy plummets, the sales of expensive products will stop. Nowadays, even though the economy is showing the signs of decline, the good quality products that are highly priced are still selling. Of course, there are foreigners who visit Japan and spend money on the food and the goods, and the fact that they purchase things here is helping. However, the purchasing trend of the Japanese people has also changed. 

In the post-war period, the trend was to sell large quantities of inexpensive things. Nowadays they do not want to eat a lot even if something may be cheaper, because people are also concerned about their health. Japan is not a country where people are starving or where we cannot sustain the food demand – we have this part satisfied. However, there is a new demand for the health food as well as what Shiseido named “the beauty food”. Those are all value-added foods and we believe there is a new market growing in this area.

 

Do you believe this is the future direction of Bourbon, this health friendly, parent friendly food?

Yes, definitely. We are working on many product developments in this area as well.

 

Bourbon’s stated business purpose is not just to gain profits, but indeed to contribute to society through health, happiness and peace. Can you outline why this contribution to society is so important to Bourbon’s future and growth?

I was born in Hiroshima and then went on to Niigata. Kashiwazaki city of Niigata is a small city – less than 100,000 people, and we established our company there 92 years ago. Then, last year, we rebuilt our head office in the place where it all began. That area is close to a nuclear plant, and yet, we still decided to build our facility there to send the message that we are not giving up. Of course, it is better for that plant to be demolished, but still we decided to build there.

I was born in the same year as Bill Gates, and when the internet arrived we thought that we, who lived in the countryside, would have more opportunities because we have the same access to information as those living in metropolitan areas. However, what happened was that the concentration of things to the metropolitan areas increased, which led to the countryside regions becoming less populous.

I see the same trend in foreign countries, which has led me to thing of something. Currently, we are 92 years old, but we are striving to continue to our 100th and even 200th anniversary. This means that I have to think in long terms. When year 2000 came, many people said this is the start of the new millennium and the new era, but my personal opinion is that the start of the internet was the start of the new era. Knowledge is expanding at a very fast pace and because of that; now we are able to use tools and methods we could never have imagined before. For instance, when we analyze the ingredients of a product, we discovered active components that we thought did not exist. We are finding out more about the build-up of our products as well, and that is a new situation to us. In that situation, we have to come up with a new business motto and I have an idea about what I want it to be.

In the past 20 years, we have seen some surprising changes, but I think if we wait another 20 more years, everything will make absolute sense and come into place. I believe in the future, people will realize the importance of regions and going there for business will be a less risky factor.

Of course, we are talking a lot about IoT recently, and I believe food is no exception. This is a new situation we will have to adapt to, and what comes with this is that skills and locations will have less importance – people in different regions and with different skills will have equal opportunities. Take Niigata for example; it is a truly rural area compared to Tokyo, and within Niigata, Niigata city is the center of it. Kashiwazaki is the rural area of the rural prefecture, but I am still telling everybody that we are capable to do things. We can start something new from this area, and my company is actually looking for a country or regional city abroad to join hands with.

My assumption is that new science and technology are always linked to military matters because that is what I was taught, but nowadays I believe it is not the case. Of course, the internet was designed for military purposes, but everybody now uses it and that has made a huge impact on society. People used to say Japan was like Galapagos: research related to the military was kept secret and it was possible to keep it this way because of the language. However, we cannot keep on being a Galapagos moving forward and still be a peace-advocating country. Everything has to be used for peaceful purposes and that is the way both regions and countries should go, keeping their hands together. By doing so, people will have no desire to fight and argue. I am convinced that the confectionery sector is contributing to this and that is what I would like to keep on providing to the world.

 

I can only assume that your ambition for Bourbon to carry on for 200 years will be realized with your plans to focus on regional revitalization and harnessing science and technology such as IoT. It is refreshing to hear a CEO talk so passionately about contributions to society, peace, health, and prosperity. I can only hope that your counterparts in America listen to these words because it is dramatically needed in our world today, so thank you so much for this.

People are now finding out that their problems were causing problems in space or in nature, and now they are finally coming to realize this. Abenomics is changing many policies for the better, in general, because they are providing research funds to advance medicine, etcetera. However, I really think countries of the world have to focus more on the galactic development, not war or military purpose research. For example, finding a planet outside of the galaxy for people to immigrate to: that is where all the technology and knowledge should be concentrated towards, and I am convinced super computers will have much contribution to this.

In addition to confectionery, we make mineral water and ESIPS-related research, and I believe all of our efforts are in the end heading towards this bigger purpose. If all the countries in the world would focus on such goals and work hand in hand to provide safety, security, health and stability, it would be a better world.

 

What would you like the G7 leaders who gathered for the summit earlier this year to remember about Japan? What should the brand Japan be in the eyes of the world today?

What I would like people to know is that Japan is one of the only countries where nuclear weapons were actually used. This means that we are the testimony to what nuclear weapons can cause on people and also what kind of peace we have been able to establish after such incident. Since the peace constitution, we have been enjoying peace and thanks to that, we have so many types of culture that youngsters of the world can enjoy. We have both peace and freedom, but this freedom is not just any freedom, it comes with order. This is what I would like people to know, that Japan can be a leading example of what a country can become as a peaceful nation. 



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