Kameda Seika delivers products that enrich both “heart” and “body”.
Japanese food-related exports have been reaching record-breaking levels for the last ten years. Just last year, it amounted to JPY 1.5 trillion. This has also corresponded with the rising popularity of Japanese cuisine worldwide. How do you account for this continued rise to record-breaking Japanese food exports and the popularity of Japanese cuisine globally?
The reason why washoku has become so popular around the world is due to the health benefits it provides. The healthy lifespan of Japanese people exemplifies this. Also, washoku is very fine and sensitive. The core diet of Japanese people is rice. In the Japanese language, there are about 445 words to describe the texture and taste of food, whereas other countries, such as the US or Germany, only have around 100 words to describe food. This proves how the Japanese are very detailed when expressing the texture. I believe this acceptable mindset related to washoku is welcomed by global palates. Japanese people are very particular when it comes to describing food.
You just mentioned the importance of rice to the Japanese diet. Due to climate change, we have seen extreme weather affecting rice yields. Last year, the UN released a report that estimated that over the previous 30 years, crop losses amounted to over USD 4 trillion due to extreme weather events. This is something that we are mainly seeing in the rice industry. For example, there was a drought in Thailand in 2020, and the Mekong Delta region in Vietnam is suffering from rising sea levels. Given the importance of rice yields to your business, what steps are you taking to mitigate these losses?
The impact of climate change on rice production indeed poses a great threat to our business as a Rice Innovation Company. Our basic premise is to have rice as an ingredient in our products. However, that is under threat. Our core competence is our high-processing technology when it comes to rice ingredients. We can process any sort of rice, whether short rice, middle-sized rice, or long rice.
Kameda Seika is a very adaptable company, and we adapt to the environment. For example, three years after I entered the company, it was too cold in Japan for the rice to grow. This led to a shortage of rice. Thai rice was imported to Japan. We gathered our experts together, and within ten days, they used Thai rice to make rice crackers.
Rice has excellent attributes as a crop. Continuous cultivation does not create disease or disorder, and rice yields better than other crops, such as wheat or soy. Also, it does not cause allergies in most cases. However, the reduction of rice production in Japan due to climate change and the aging population has resulted in a decrease in the amount of farmland in Japan. We must take active steps and possibly be involved in the agricultural sector to ensure a stable rice supply, as it is our main ingredient.
We have the technical capabilities to process rice, potatoes, corn, and a combination of various crops. We want to elevate our technology continuously so that we can continue to provide new products.
The release of the UN’s sustainable development goals in 2015 pushed many companies to look for ways to improve their performance. As part of your goals for 2030, you have set the target of reducing the amount of plastic packaging in your products. This reflects the trends of consumers, with a study last year finding that it was the number-one concern for 53% of consumers when choosing products. What strategies are you implementing to achieve your goals of reducing the amount of plastic in your packaging by 2030?
We aim to reduce the amount of plastic we use in our products by 30% compared to our 2017 level. It is a company’s corporate responsibility to tackle social issues. This is not only through the elevation of processing technology. We are also currently working on packaging technology.
We have already implemented a new style of packaging. Before, individual rice crackers were packed in plastic foam, and then put into a bigger package. However, some of our products now have lower quantities per bag with only a single packaging. We are trying to reduce the amount of plastic used in our packaging and have tried several new methods, including changing the shape of the rice crackers. We are also elevating our packaging technology to have a longer shelf life to reduce food loss.
In your plan to become a “Better For You” company, one of your key pillars is that you want to continue your overseas expansion, particularly in the US market, with your TH Foods and Mary’s Gone Crackers. The US savory snack market is valued at over USD 30 billion. However, most of that share is held in the corn and potato chip market. The challenge companies face when trying to expand in this market is establishing rice crackers as a mainstream snack. What are the main strategies that you are putting in place to overcome this challenge and achieve the goal of expanding these brands in the US market?
Our strategy is not to be a direct competitor to potato snacks and other snacks. As a Rice Innovation Company, our core philosophy comes from Japanese rice culture, which focuses on a longer health span. We want to stress the uniqueness of our rice crackers and elevate their taste to apply to the local palate preferences and textures. Developing rice crackers that taste more like snacks that are welcomed by the US market is the direction that we are taking. However, rather than being a commodity, we want to make our rice crackers necessary with functional and health benefits. That is our strategy for the US market.
You mentioned changing the taste. This poses a challenge as regional tastes can be completely different. For example, Japanese sushi is different from sushi you get in the US. The same goes for the level of spice in the Indian or Thai markets, which is much higher than in the German market. What is your process for identifying these local tastes, and to what extent do you readjust your recipes to adapt to local tastes?
Our overseas operations heavily emphasize partnerships with local companies. We work with these local companies to determine the best flavors for each market. Our established technology makes rice crackers from Uruchi and Mochi rice. Based on this technology, we work with local entities to understand and develop market-specific products.
We know that R&D is a vital part of your business, and your rice research center is leading the way. One thing that we saw was your discoveries about lactic acid bacteria derived from rice and sake leaves. For example, the Lactobacillus K-1 strain benefits the skin, and the K-2 strain can help with pollen allergies. Given that there is such a broad range of applications for this technology, what sort of products are you looking to integrate it into in the future?
Through our research, we developed plant-based lactic acid bacteria, which are functional ingredients. Unlike animal-based lactic acid bacteria, plant-based lactic acid bacteria are more easily adaptable. The efficacy changes according to the amount that is added. Recently, we have been working with major convenience chains to provide an onigiri with plant-based lactic acid bacteria that differentiates and makes the onigiri unique with functional properties.
Snacks are often considered as preferable. However, adding functional ingredients makes them a necessity for people to intake. In the near future, we envision adding this plant-based lactic acid to enhance their health benefits and values.
Earlier, you mentioned how rice is at the core of Japanese people's diet. When Japanese people buy your products, they know the benefits they will be getting by eating your rice crackers. Nevertheless, as you are currently expanding overseas, you mentioned that one of your key strategies for the US market is to promote the uniqueness of your products and emphasize the health benefits of the rice crackers themselves. As the president of this company, could you explain to our readers worldwide what the benefits of your rice crackers are and what to expect when eating them? Why should they shift from potato chips to rice crackers, for example?
Our approach to the US market is gluten-free, as this is very popular there. We already have three group companies in the US, although not all of them are consolidated companies. The gluten-free snack market has grown CAGR by 6-7% annually. We want to continue to strengthen this gluten-free aspect in the overseas market.
We already have a large share of the US market, equivalent to USD 40 billion. However, there are still areas for growth, so we want to continue improving our product lineup.
As the president, which is your favorite product? Which one would you recommend?
My favorite is KAMEDA Kaki-no-Tane, and I was involved in manufacturing these products.
We know that tofu and soy have been a part of Japanese cuisine for many years. Recently, they have become popular in Western markets as a meat-free alternative. However, Japanese consumers must still be convinced to buy these meat-free alternatives. Last year, a study showed that around 80% of Japanese consumers would choose Japanese-made beef instead of plant-based alternatives. Given that your group has targeted expanding your plant-based food through your Maisen line, what strategies are you implementing to overcome this Japanese consumer reluctance? Do you see the overseas market as more beneficial for these plant-based products?
Indeed, the popularity of plant-based alternatives could be higher in Japan. However, the interest is growing. Meat is a source of protein, and currently, there is a stable supply. Once we can create a more delicious plant-based alternative meat, the market trend will change. We are elevating our plant-based products to improve the taste and ensure they are easy to use. The cost is another critical factor. The Green Chicken that we have developed does not taste like soy, and the block type contains protein equivalent to two lettuce and four eggs. Providing concrete evidence of its nutritional value is important to grasp the market's attention.
Currently, Japan relies heavily on importing beef from overseas. Once we cannot obtain a stable meat supply, plant-based alternatives will surely be in the spotlight. We want to be a pioneer in this field, so we have been taking active steps to fully leverage our production skills and facilities to develop new products that are suited for B2B and B2C marketing.
You had a very successful marketing campaign for April Fool's Day this year. On Twitter, Happy Turn tweeted about launching a new spicy version of rice crackers called Tsura-turn. Many people were speculating whether this was going to be released. It was released the next day and became a viral hit online. Did you expect this campaign to be such a success when you launched it, and can we expect anything similar in the future?
As human society progresses, people are becoming more self-centered. They want to satisfy their needs and wants more and more. To provide unique touchpoints with our customers, we must create an environment within our company with a bottom-up approach. We have over 6,000 employees in our group. Each individual has their own ideas that can surpass AI and technology-offered opinions. We want to create a more open atmosphere at our company. The April Fool’s Tsura-turn campaign was one of the outcomes.
You spoke earlier about the importance of partnerships in identifying local tastes and mitigating supply chain disruptions. Are you looking to expand your partnerships, especially in the international market?
We currently have eight overseas bases in six countries and export our products to many other countries. Our strategy for the future is to find a local company and work with them to develop a new market in the countries where we do not have bases yet.
Are you targeting any particular country or region for expansion? If so, are you looking to set up a local subsidiary or find a distribution or sales partner?
We are focusing on the North American market due to its high purchasing power and the Asian market due to its high population. Some of our products are adaptable to Halal, so Islamic countries are also the locations that we are considering.
Your company is celebrating its 68th anniversary since its foundation this year. How would you like your company to be seen by the global market?
As a Rice Innovation Company, we strongly believe that our products can contribute to the betterment of people’s health. Our products are not only delicious but also have health benefits. As a creation company, we provide happiness and excitement through our products. It is important to combine these feelings with delicious tastes, functionality, and health benefits to ensure we provide the best products possible.
For more information, visit their website at: https://www.kamedaseika.co.jp/en/
0 COMMENTS