A leading company in Japan’s food and hospitality sectors, Green House has quietly but profoundly been transforming both industries for over 75 years.
For 11 consecutive years, we’ve seen Japanese food-related exports increase. If we look at up to 2023, they reached JPY 1.45 trillion. This has been consolidated overseas by the growing popularity of Japanese restaurants, which grew from 55,000 in 2013 to more than 200,000 today. How do you account for this substantial rise in Japanese food exports? Why is now the time for traditional Japanese food culture, or washoku, to shine internationally?
The turning point for washoku was the UNESCO listing back in 2013, recognizing it as intangible cultural heritage. I was the head of the Japanese Restaurant Association before Rikifusa Satake, the owner of Minokichi, and he was instrumental in the registration process. Since then, Japanese washoku has become even more popular around the world due to its healthiness and its high quality. Nowadays, a chef in New York working at a Japanese restaurant can earn a lot of money, because there is a growing demand for Japanese food. I am currently the head of the JRO, which is an organization responsible for promoting the appeal of Japanese food abroad. Within the JRO, it is important to provide the best omotenashi (hospitality) to visitors coming to Japan. Currently, we are looking at more than 35 million visitors this year, and next year, it will surely grow. The key to these growing numbers is the depreciation of the yen, but even when the yen normalizes, I believe those who had a great experience in Japan will come back again.
The JRO was established with the purpose of expanding Japanese restaurants overseas. In 2007, the number of Japanese restaurants all over the world was around 24,000; last year, this number exceeded 187,000. It clearly shows that there has been a significant increase in demand. Exports of Japanese food products back in 2007 were around JPY 40 million, and as you mentioned, in 2023, they reached JPY 1.45 trillion, a huge increase. By 2030, the Japanese government is targeting JPY 5 trillion in exports. And among all of the Japanese food exports, rice is the staple food for most Asian countries. However, there have been ongoing issues, such as not having enough rice to meet consumption demands.
This issue with the food system is quite complex. First and foremost, rice is a basic staple and is very important for daily sustenance. I used to be part of the Food Policy Council of the Ministry of Agriculture, Forestry and Fisheries, which is an organization that discusses agricultural rules as well as policies. With new laws being introduced, the concept of food security was introduced legally for the first time in Japan. What is critical is the fact that rice production has dropped significantly, from eight million to six million. Although I have talked about rice, this problem really pertains to any form of farmed food in Japan. It is decreasing with the decline of the agricultural population, with that population sitting at about 1.1 million people right now. By 2040, this agricultural population is predicted to drop all the way down to 250,000, one quarter of the current population. Currently, there are approximately 33,000 of those kinds of companies nationwide, and their sales have rapidly expanded, increasing 1.5 times more over the past decade. Enterprise agriculture could be the solution to the diminishing workforce if they can be managed in a truly efficient way, such as by ensuring sufficient manpower and machinery and coping with the various costs that rise each year. Another dilemma is that the consumption of rice in Japan is decreasing as well. Therefore, it is important to channel out to overseas markets in order to retain and boost rice production in Japan. Now we are seeing significant rice exports, but the contradiction is that the more we export, the less rice will remain in Japan, which is the crux of the rice shortages in Japan. Everything is complex, and there are a lot of moving parts to consider, so we have to tackle this matter comprehensively.
Earlier, you mentioned the JPY 5 trillion target set by the Japanese government for food exports. Is this target achievable, and if so, what do you think are some of the key steps that need to be taken in order to do so?
Comparing 2007 to 2023, exports tripled. I’m not exactly sure if the JPY 5 trillion target will be met by 2030, but if we don’t, it will be extremely close. I believe it is achievable by diversifying and increasing the number of countries that Japanese food is exported to. Additionally, we need to vary the types of food we export. In India, for example, Japanese curry is becoming popular, and in comparison, Indian curry is thinner and more spicy. Japanese curry obviously goes very well with Japanese rice, so providing them together as a set creates an attractive meal.
The training of human personnel is the key to successful overseas restaurant operations. It is important to have a quality chef as well as capable management in order for the operations of overseas restaurants to run smoothly. Before setting up a restaurant in a local area, many factors locally need to be considered carefully. Domestically, we have a consulting firm within our group company that takes care of all of these processes. We are also looking to expand our consulting business overseas. This has so far been expanded to 10 cities worldwide. This is thanks to fantastic partners and our franchise system.
Can you talk to us a little about the sustainability initiatives your company is running and the importance of sustainability to your business model?
Food waste in Japan was massive in 2023, and the Japanese government is taking a strong lead in reducing food loss. At Green House, we are running some initiatives to reduce waste as well as upcycle waste, including residue from vegetables. As an example, we launched “Marutto SDGs Meal.” We serve 50,000 sustainable meals, reducing 440 kilograms of waste at 368 locations in a year.
Green House Group’s GreeneX Plus innovation center
hat role do you see digital tools having in your business going forward?
There are three pillars to our approach: food tech, health tech and hospitality tech. Food tech basically pertains to sustainable food programs and upcycling, creating a circular economy. An example is the vegetable oil we use to fry food, which is recycled for use in aircraft, so we like to call it “Fry to Fly.” Alternative meat will also be very important in reducing the amount of CO2 emissions caused by cattle raising. Achieving healthiness, safety and deliciousness at the same time is still quite a challenge.
We have our own artificial intelligence (AI)-powered healthy diet management app called Asken, which is very popular and has been ranked number one in both downloads and revenue for three consecutive years (as of January 2024, according to data.ai). We’ve surpassed 11 million registered users, with an increase of one million users over the six-month period from March to September 2024. In this way, the app is very sustainable and environmentally friendly, providing diets, appropriate nutritional information and health maintenance features for users.
For our application, we also collaborate with other companies, especially those with access to big data capabilities. We are also collaborating with other sleep-related companies so that we can gather data comprehensively and provide the best guidance for clients looking to improve their nutrition intake using the app. The hope is that the user can see over time how they are losing weight, how their body is changing, how they feel healthier and how they are getting more sleep. This is applicable not only to health care but also from a more medical perspective. In order to be used as medical equipment, certification is required from the Ministry of Health, Labor and Welfare. The screening process for certification is a few years, but once cleared, our app will be recognized as a medical device.
We’ve touched upon many of the broad fields your company is involved in. Among all of the broad group activities you are involved in, what sort of synergies have you been able to generate? Is there a particular branch where you are seeing the most growth?
We’ve been involved in the hotel business for about 25 years now, and starting from Kyoto 10 years ago, we have been developing our own brand, “Hotel Grand Bach.” We can create synergy using our restaurant, which has a special menu, and we are able to collaborate with other restaurants within our group. Additionally, our head chef is often dispatched to cater high-end meals. We also run VIP rooms in baseball stadium locations, and the dining menu produced by our chef from Hotel Grand Bach has been very popular recently.
At our hotel in Ginza, we have a professional (a registered dietitian) known as a “Wellness Food Concierge” who plans and proposes healthy and appealing menus. Now we serve a variety of health-conscious courses, and for example although one course tastes very filling, the entire meal is just 650 calories. The hotel is located near the Kabuki theater, so people visiting the theater will often go to the restaurant to have a meal. This restaurant has been recognized for its healthiness and its variety.
There are many other synergies we have in our group, and one example I can give are the seminars we hold about school lunches and company canteens. This is in order to spread the message of a healthy diet and lifestyle. Honestly speaking, there are too many activities and synergies we conduct today, so I am giving you a sample of the variety of things we do, leveraging our group companies. A common theme among all of these collaborations is providing people with healthy yet delicious food.
AI-powered Asken meal management app
Your company started with contract services before expanding into restaurants and then 10 years ago you even moved into the hotel space. It seems that these days you are growing rapidly in the digital transformation space, pushing the provision of wellness services. What is the next step? What new sectors do you foresee potential expansion into?
Food, health and hospitality tech are the areas we are looking to focus on right now. Currently, I am thinking a lot about hospitality tech, specifically innovative hotels. The idea is to provide somewhere that provides families with good food, a good location and good music, and a soothing environment that rejuvenates both mind and body. I want people to feel taken care of. Generally speaking, most rich people in China are in their 30s and 40s, but in Japan, rich people are a lot older, being in their 70s. They have money, but they don’t spend money, and keep saving it. I see this as a good opportunity to establish a very creative and unique Japanese hotel, specifically targeting older people with disposable income. Those kinds of customers want their family taken care of, particularly if they are on holiday.
This is interesting since, historically, Japan has needed more hotels for large groups and for longer stays. Your flagship overseas brand is Tonkatsu Shinjuku Saboten, beginning with the South Korean market in collaboration with the LG group. After that, you moved to Taiwan, where you had your own restaurant, thanks to local collaborations. Moving forward, you adopted a franchise business where franchisees take your brand overseas. Looking at the future, how do you foresee the evolution of your overseas restaurant business?
I’ve been thinking a lot about the Asian market, but ultimately, our goal is going to be worldwide penetration. Asian people like visiting Japan, and Japanese people, in turn, like visiting countries like Thailand, Malaysia and Cambodia. Now, we have a very good partner in Taiwan with 40 restaurants under our umbrella.
Different countries have different palates and preferences. Do you adapt when you expand overseas? Do you plan to adapt the taste of your restaurants to the local market?
Japanese food is often referred to as a very easily modified cuisine. It is considered a little bit milder than other Asian cuisines, yet it retains a tastiness. It means that we can adapt slightly to the tastes of the market without compromising the Japanese essence in the food.
Moving away from the food business, do you plan on internationalizing the other sectors you cater to, such as your hotels and other services?
This is the plan, but not right now. When you look at big European and American hotel brands coming to Japan, 93 percent of them are franchises. They want contract management, and they are not looking to invest. When you look outside of Japan, there are very few Japanese hotel brands operating globally. It could be possible in the future, but I think we need to be a bit more specialized in the direction we want to go.
We saw in our research that in recent years your company has a lot of interesting partnerships, specifically with the consulting operations of your group. Could you explain the importance of partnerships in your business model and the type of partners you are currently looking for?
We do have a lot of joint ventures in other countries, and to that end I would say that we are very lucky. With a lot of them, they first find our name and once they research our company, they want to work with us. I think the most important thing is chemistry, especially between companies and owners. People should come first, not money.
In addition to partnerships, we know that your company has been quite active with mergers and acquisitions. Why have you been so active, and are there any other acquisitions you are currently pursuing?
It really depends on the company, and whether they want to establish a joint venture with us or they want to sell to us. In particular, we know that Southeast Asia has an interest in our company and appreciates our support. A key is our pace, since we aren’t looking to rush anything and engage in hard negotiations.
Is there an ultimate goal or objective you would like to achieve during your time as president?
I became president of the group in 1993, and that was seven years before my father passed away. At the time, the company was one-fifth the size that it is now. I think I can safely say that right now we are in a good position and very lucky. My father’s good deeds have now borne fruit, and I’m very lucky to have support around me to make our company a success. One more person I should mention is my wife, who has always supported me.
For more information, visit: www.greenhouse.co.jp/en
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