Crafting World-Class Wagyu: Sugimoto Meat Industry

Over the past eleven years, Japanese food exports have reached record-breaking levels, totaling JPY 1.45 trillion by 2023. At the same time, the number of Japanese restaurants overseas has surged from 55,000 in 2013 to 200,000 today. Your company has played an important role in this expansion, supplying premium Japanese meats like Matsusaka and Wagyu Beef to international markets and your own restaurants. What do you believe is driving this sustained growth in Japanese food exports and the increasing global popularity of Japanese cuisine?

The COVID-19 pandemic imposed significant restrictions on dining out and international travel, creating challenges across many industries. However, despite these difficulties, the demand for Japanese food has continued to rise. One key reason is the exceptional quality of Japanese ingredients.

Japan’s four distinct seasons contribute to the production of high-quality agricultural products and seafood. This results in premium vegetables, fruits, and rice, all of which enhance the overall standard of Japanese cuisine. Even the simplest dishes, when made with Japanese ingredients, maintain a high level of quality, making them appealing to international consumers.

Additionally, there has been a growing number of highly skilled Japanese chefs venturing abroad to open restaurants, further driving the global popularity of Japanese cuisine. Their expertise and commitment to authenticity have played a crucial role in expanding the reach of Japanese food culture worldwide.

Traditional Japanese cuisine with Wagyu

Wagyu has gained exceptional popularity worldwide due to Japan’s unique approach to raising cattle. The specialized breeding techniques, high-quality feed, and meticulous care given to Wagyu cattle set Japanese beef apart from other varieties. Our goal is to expand globally and share the traditions and expertise behind Wagyu production with the world.

Beyond Wagyu, Japan has a rich culinary heritage of premium meat-based dishes such as sukiyaki, shabu-shabu, and yakiniku, all of which continue to grow in international demand. These dishes highlight the superior quality of Japanese beef and are contributing to the worldwide appreciation of our food culture.

However, like many other Japanese businesses, we are facing challenges due to Japan’s declining and aging population. To sustain our industry’s growth, it has become increasingly important for us to look beyond Japan and expand our reach to international markets.

Japan’s population crisis is leading to a shrinking domestic market and a reduced labor pool, creating significant challenges for many industries. When we speak with other companies, a recurring strategy to address these issues is internationalization. How much of your company’s approach to overcoming the population crisis is focused on expanding globally? What specific steps are you taking to ensure long-term growth beyond Japan?

Japan’s declining population presents a major challenge for our business, as both market demand and the workforce continue to shrink. This makes it increasingly difficult to maintain profitability. However, one positive trend we are seeing is the rise in inbound tourism. A growing number of foreign visitors are coming to Japan and spending significantly, particularly because Japan is now perceived as a more affordable travel destination due to the weaker yen. This presents a valuable opportunity for expansion.

Beyond Japan, we see strong potential in rapidly growing markets like Indonesia and Vietnam, where demand for high-quality Japanese cuisine is increasing. We have received numerous offers from companies in these countries looking to collaborate with us and open restaurants. Forming strategic partnerships with local businesses will be essential to expanding our footprint in international markets.

At the same time, the domestic Wagyu market is facing several difficulties. The price of Wagyu has risen significantly for Japanese consumers due to declining production, higher feed costs, and the depreciation of the yen. As a result, fewer Japanese customers can afford to consume Wagyu as frequently as before, making it harder to generate strong profits in the domestic market.

However, overseas consumers are more willing to pay a premium for Wagyu, which is why many in our industry—including ourselves—are increasingly looking to international markets. Expanding globally is not just a strategy for growth; it is becoming a necessity for the long-term sustainability of the Wagyu industry.

Given your international footprint in the past, including a 12.5% stake in the Japanese fresh wholesale market in Thailand and subsidiaries in Bangkok, what is your broader strategy for international expansion? Which key markets are you targeting next, and how do you plan to strengthen your global presence?

You mentioned the ownership stake in the wholesale market in Thailand, but unfortunately, that is no longer the case. However, we have been actively collaborating with Yamamori, a soy sauce company. These restaurants focus on selling dishes like karaage and onigiri rice balls, effectively positioning us in the retail business. That said, our long-term strategy is to shift our focus more toward the wholesale market.

In China, we currently operate four stores. The president of our Chinese subsidiary is local, and despite the ongoing economic challenges in China, we have managed to make steady progress there over the past ten years.

For future expansion, we are targeting Vietnam, Indonesia, and Malaysia, where labor costs remain relatively low and demand for high-quality Japanese meat is growing. Additionally, we see significant potential in Dubai, where a high concentration of affluent consumers has shown strong interest in premium meats like Wagyu. I plan to visit Dubai and Abu Dhabi to explore opportunities for collaboration with local companies. We believe that forming strategic partnerships with local businesses is the key to a successful expansion strategy.

Beyond simply selling more meat, we recognize that market education is crucial. For example, in Thailand, many people are aware of Wagyu, but they do not necessarily know how to cook or prepare it properly. This presents an opportunity for us to educate consumers on how to best enjoy premium Japanese meat, which in turn drives demand. This is why restaurants and retail must work together—if we focus solely on retail sales without supporting it through education and culinary experiences, we will not achieve the level of success we envision.

High-quality Japanese Black Beef

Beyond just knowing how to cook and enjoy Wagyu, consumers may not realize that there are different types of Wagyu, each with distinct characteristics. What sets your Wagyu apart from others in the market, and why should someone choose your product over competitors?

What sets our Wagyu apart is the level of control we have throughout the entire process—from cattle selection to retail. We carefully select our cattle and maintain a highly systematic control system, ensuring full traceability from the farmers to the final product. Unlike other suppliers, we have direct relationships with our farmers, allowing us to receive customer feedback and make necessary adjustments to maintain the highest standards.

Our farmers use special cattle and feed that are exclusively designated for us, and we never source cattle that we have not personally selected. This level of oversight, combined with our fully integrated operating system, ensures that we uphold the techniques and expertise we have refined over more than 100 years. This deep commitment to quality, consistency, and customer satisfaction is what truly differentiates our Wagyu from others in the market.

Maintaining the quality of Wagyu requires not only careful production but also the ability to pass down knowledge and expertise. One way you are addressing this challenge is through the Sugimoto Meat Academy, which you established in 2010 as an in-house training program to develop meat masters. What sets this academy apart from other training programs in the industry? Additionally, what career paths do graduates typically pursue after completing the program?

The Sugimoto Meat Academy is something I personally initiated as president. My goal was to ensure that everyone working at Sugimoto—not just those directly interacting with customers, but all employees—becomes a true meat professional. I wanted to create an environment where knowledge is standardized, ensuring that every team member understands not only the techniques but also the core principles behind our craft.

Traditionally, junior employees learn from senior employees, but over time, this method can lead to inconsistencies, with processes deviating from the original standards. The academy was designed to counter this by reinforcing fundamental principles, so that everyone in the company has the same level of expertise and applies it consistently in their work.

The academy goes beyond just meat-related training. It also covers nutritional information, customer service techniques, and sales strategies. Since its launch in 2010, it has been running for 15 years, continuously evolving. One of its unique aspects is that graduates of the program become instructors for the next group of students the following year, creating a self-sustaining learning system. We also continuously refine and improve the curriculum to ensure it remains relevant and effective.

Employees who complete the course receive an official certification—and as recognition for their expertise, they also receive a salary increase. This initiative has not only strengthened our internal training process but has also reinforced Sugimoto’s reputation for excellence in the meat industry.

Preserving the freshness and flavor of meat presents several challenges, including spoilage, aging, and shrinkage. Your company has addressed this issue with the ice-temperature aging process, which operates in a temperature range just below 0°C, allowing cells to remain active without freezing. How did you develop and refine this process to suit your needs, and what makes it unique compared to other meat preservation techniques?

Freshness is absolutely essential when it comes to meat. The appearance, texture, and taste are all at their best when the meat is fresh. Several factors play a crucial role in maintaining freshness, including temperature, moisture, humidity, and time. When it comes to time, we prioritize selling meat as quickly as possible after it has been sliced. I always tell my team that meat should ideally be sold on the same day it is cut. If that isn’t possible, it must be sold the next day at a significantly lower price, which is why speed is so critical in our operations.

Aging, on the other hand, applies specifically to high-quality meat, and this technique has been in use for about ten years. To perfect our process, I personally visited numerous steakhouses, including Peter Luger in New York, to study different aging methods. In addition to managing temperature, moisture, and humidity, we have refined our technique by using a specific type of mold that enhances the aging process, ensuring that we achieve consistent quality, texture, and flavor.

Sugimoto Meat Academy

Spoilage and oxidation are major challenges when it comes to maintaining meat freshness, and our ice-temperature aging technique has proven to be an extremely effective solution to prevent these issues. After extensive research, we became the only company to adopt this unique aging method. It not only preserves the freshness of the meat but also enhances its texture and flavor, making it a superior alternative to conventional aging processes.

One of the key innovations in our method is the application of 5,000 volts during the aging process. This prevents the meat from freezing at subzero temperatures while still allowing the natural processing to continue—something that would not normally be possible at such low temperatures. This precise control over the aging environment enables us to maintain exceptional quality while extending the meat’s shelf life.

You have established numerous collaborations and partnerships. Looking ahead, what is your strategy for future partnerships? Are there specific industries, regions, or types of companies you are particularly interested in working with to drive growth and expand your business?

We transitioned into a holding company structure to enable us to pursue new ventures that we had never explored before. This shift has made it much easier for us to engage in M&A activities and launch new projects across wholesale, retail, and the restaurant sectors.

Looking ahead, we are interested in expanding into new business areas, including those that may not be directly related to meat but align with the broader food service and meal preparation industries, where there is significant added value. One key opportunity we are exploring is the establishment of a new factory dedicated to producing premium prepared meals. The demand for high-quality bento boxes and gourmet souvenirs is rising, particularly in the premium segment, making this an attractive area for growth.

To successfully expand into these new fields, we recognize the importance of collaboration. Rather than competing, we aim to build strong partnerships that allow us to grow together with other companies. Whether through joint ventures, strategic tie-ups, or supplier collaborations, we see partnerships as a critical part of our long-term strategy.

Which beef do you prefer or recommend?

My favorite meat is Wagyu, particularly the female Wagyu produced by a highly trusted farmer, Mr. Takeuchi. He is known for raising exceptionally high-quality Wagyu, especially from female cows that have never given birth, as they typically yield the most premium meat in terms of texture and flavor.

Among all the Wagyu he produces, I have a particular preference for Harami. It is an incredibly special variety that can only be produced in small quantities, making it a rare and highly sought-after delicacy.

As a final question, how would you like your company to be perceived by our global readers? What is the legacy and image you hope to project on the international stage?

Our top priority is to share the excellence of Wagyu with the world. We want people to experience just how delicious and unique it is, which is why we are constantly working to introduce new ways of preparing and enjoying Wagyu beyond the traditional dishes like sukiyaki and shabu-shabu. We also recognize that culinary preferences vary from country to country, so it is essential for us to understand local tastes and adapt accordingly. Ultimately, everything we do ties back to our main goal, making our customers happy by delivering the best possible dining experience.

At the same time, we are also looking toward the future of food. We recently launched Station Ai, a store that sells soy meat burgers. We recognize the importance of exploring alternative proteins, especially as global meat production declines while the world’s population continues to grow. Finding new food sources to prevent hunger and ensure sustainable nutrition is a challenge we take seriously. Although we are an SME, we believe it is part of our mission to innovate, explore, and promote these kinds of new food solutions on a global scale.

For more information, please visit their website at: https://www.oniku-sugimoto.com/

To read more about Sugimoto Meat Industry, check out this article about them