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Happiness that Comes from a Full Tummy

Interview - February 2, 2025

Eat & Holdings mission is to accurately grasp the changes of the times, cherish the dreams, joy and brilliance of life, and create happiness for its customers through the creation of food culture.

NAOKI FUMINO, CEO OF EAT & HOLDINGS CO., LTD.
NAOKI FUMINO | CEO OF EAT & HOLDINGS CO., LTD.

For eleven consecutive years, food-related exports have achieved record-breaking numbers, reaching JPY 1.45 trillion in 2023. This trend is also being reflected on a global scale, with the number of overseas Japanese restaurants tripling over the past decade, from 55,000 in 2013 to nearly 200,000 today. How do you account for the continued rise in record-breaking levels of Japanese food exports, as well as the recent growth in popularity of Japanese cuisine overseas?

I believe Japanese food is becoming more popular globally because the cuisine and the restaurants provide safe, high-quality meals with fresh ingredients that use a complex cooking methodology. It’s also being helped by the fact that when Japanese restaurants go overseas, the taste is adapted to the local palate, which enhances the satisfaction of the locals.

Another factor is that Japanese restaurants take good care of not only the food that’s provided to the guests but also the atmosphere of the restaurant, together with the design and choice of tableware and ornaments. Everything is comprehensively made to enhance the dining experience.

 

Over the next fifteen years, Japan expects significant demographic shifts characterized by both an aging and declining population. This will cause both a shrinking domestic market and a labor shortage. To be more specific, there is expected to be a labor shortage of about eleven million people by the year 2040. One of the new technologies you have adopted to help address this issue is the use of cooking robots in some of your directly managed stores to enhance efficiency and automation. How do automation and cooking robots help you address some issues that come with population decline, and are you doing anything else to address some of these challenges?

The shortage of labor in the restaurant industry is a severe issue, obviously because of the declining population, not only in Japan but also globally, and also because fewer people are willing to work in the restaurant industry. I feel the interest has been fading, so we are seeing fewer people willing to work in the industry.

Rather than trying to secure more staff, we are going towards automation and the use of robotics so we can have an efficient operation of the restaurants and the factory. We want to strengthen and standardize our frozen food production to provide high-quality food and services through the introduction of IT and automation technologies. To make the industry sustainable, it’s important that we constantly improve our operations and make them less dependent on human labor. For example, when people come to our restaurant, they can order from the menu and pay with their mobile phone, and delivering their ordered menu as well as  the after-service cleaning can be done by just pushing a button. We’re also introducing cooking robots, as you mentioned, so wherever possible, we are trying to include more of an automated solution so we can achieve more efficient operations.

 

Your company has a long-term vision called the Eat & Challenge 2030 Initiative, which has the goal of reaching annual sales of JPY 100 billion by 2030. As part of achieving this, you need to meet your mid-term goals of reaching JPY 50 billion in sales by 2026 and reaching 100 overseas stores, with a focus on Asia, also by 2026. What are some strategies you are implementing to reach your mid-term goals, and as we go into 2025, are you on track to reach these goals?

Honestly speaking, we are still experiencing the impact of COVID-19, so we are behind by two quarters. However, the target for our midterm 2026, which is reaching JPY 50 billion in sales and having 650 stores, is within our scope. To achieve the JPY 100 billion for 2030, North America will start this year, and we are currently expanding in Taiwan, so with these overseas projects, we hope to increase our overall profitability.

 

You have already expanded to Asia, particularly in China and Taiwan. What kind of success have you had in these countries, and what opportunities do you see throughout Asia?

In Taiwan and China, especially Taiwan, we have over ten years of experience, and we are operating restaurants with diverse brands like Osaka Ohsho, Yottekoya, and Taiyo no Tomato Men, so we have been operating stores across these regions, but our target is not only to operate the restaurants. We also want to provide frozen food, so the purpose of the restaurants is to be both a standalone profitable business and brand builders so we can have a frozen food business that is most adaptable to the local taste palate.



Gyoza is a dumpling, which I think originated in China, but like many delicious Japanese foods, it has become something completely unique now. For the benefit of our readers, could you explain what makes gyoza so unique compared to traditional Chinese dumplings?

The biggest difference between Chinese dumplings and our Japanese-style dumplings is that Chinese dumplings are boiled whereas Japanese fried dumplings, with a thinner and crispy dough, are popular.I In Taiwan, it’s been successful with almost the same average customer spending as in Japan.



You mentioned the expansion of your frozen food products. Your food for both your restaurants and for households is made in factories across Japan. Can you talk about how you’re able to replicate the same quality of food you provide in restaurants and how you can maintain that made-in-Japan quality when you sell to other countries like China and Taiwan?

Converting restaurant-quality food to frozen food requires a lot of effort, research, and development, and we have continuously made this effort to replicate the quality and taste of the restaurant food closely. As for the distribution network, that is actually the key that determines success in the country. For the upcoming US business, we are collaborating with Mitsubishi Shokuhin Co., Ltd. in a joint venture and they already have a local distribution network there, so we envision an efficient execution of the business in the North American market.

 

Speaking of partnerships, one of your strategies to reach your midterm goals calls for international expansion, including pursuing partnerships and M&A activities Which types of partnerships and M&A activity would be most valuable for international expansion to help you reach some of your goals for 2026 and 2030?

The most critical partner is a production partner in the local market who can provide safe, reliable, and delicious frozen food production, and for frozen food, freezing technology is especially critical. We have accumulated this technology so we can provide the necessary technical assistance, but finding the right trustable partner for production is the key to our business in other markets.

Our business model is to have a restaurant together with the frozen food distribution, so through the restaurant, we will research local preferences and reflect them in the frozen food development. Once we can create delicious yet reasonable and affordable frozen food, we are confident it will be popular with local customers.

 

Looking at your restaurants, Osaka Ohsho specializes in gyoza and is known for combining Japanese and Chinese food, like fried rice and sweet and sour pork, at an affordable price. The brand has over 300 locations worldwide. You also have other stores, including specialty noodle shops and bakeries. How do your restaurants stand out against other restaurant chains, and what kind of experience do you like to give customers when they dine in your restaurants?

We apply a franchise chain model, but we provide regional dominance to the owner of the franchise. For example, the owner of a franchise can have not only Osaka Ohsho, but he or she can also have a ramen shop and operate a bakery within the same area. The reason we have diversified the portfolio is to allow the franchise owner to have more business opportunities in the regions by having diverse brands. The uniqueness is that, although there are diverse options, there is a commonality in that they all use similar ingredients, so they can purchase in bulk to reduce the price, which is, therefore, economically efficient. The restaurant industry also follows trends. For example, maybe for the first four years, a restaurant does well but then stops doing as well. In that case, the owner can change to another restaurant to see how it goes using the same prime location.

 

Would franchising remain the primary approach for your overseas expansion as opposed to opening directly managed restaurants?

Yes, we want to apply this franchise model overseas.

 

One interesting thing you’re doing is what you call an external dining e-commerce model that mirrors real-world dining with e-commerce. What exactly is your external dining e-commerce model, and how big a role do you expect e-commerce to play for your business domestically and internationally?

We are currently strengthening our e-commerce business, and our target is to achieve JPY 10 billion. We have multiple e-commerce businesses. Frozen gyoza is one of our earliest sales efforts, and we are now strengthening our Ramen Journey project, which provides frozen ramen from across Japan. There are many good ramen shops that have no successors, and it’s a pity that the delicious ramen taste is lost because of that, so we took their recipe and made a frozen ramen version to sell online. This way, people can enjoy a variety of ramen flavors from across Japan at home. Especially since COVID, people’s lifestyles have changed, and eating in the house has become more of a common thing, so providing e-commerce opportunities to purchase restaurant-quality food is one unique aspect of our company.

 

Is the Ramen Journey product just a domestic business?

It is only for the domestic market now.

 

Speaking of your frozen food, which is your most popular product, and which is your favorite?

Gyoza is the most popular, and my favorite is our fried rice.

 

If we were to interview you again on the last day of your presidency, what ambitions or personal goals would you like to have achieved by then?

The company’s purpose is to create an exciting food culture for the future and to achieve that. We are undergoing many changes and updates to our company structure. Sustainability is also now a key for the global society and for our business, so I’m constantly trying to keep a perspective of creating innovative and exciting food and dining opportunities while being mindful of sustainability. I am determined to continue working for ten years or more, but when I leave the company, I want to make sure that the company has the structure to grow sustainably  in the future.

 


For more information, please visit their website at: https://www.eat-and.jp/

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