Kawasho Pioneers Food Solutions for Evolving Lifestyles Around the Globe

We’ve seen record-breaking numbers of food-related exports these last eleven years, reaching JPY 1.45 trillion, and we’ve also seen the number of Japanese restaurants expand globally from 55,000 in 2013 to over 200,000 now. Food traders are obviously a key part of this. How do you account for the continued rise of Japanese food exports and the growth in the popularity of Japanese food and cuisine in recent years?

Japanese food has long been perceived as healthy cuisine globally, and that’s helped by the popularity of Japanese animation. Japanese cuisine is now incorporated into people’s daily lives as a part of Japanese culture through this animation. We have collaborated some animation character, for our corned beef, and that has been a great success, so this combination of food and Japanese pop culture is now becoming mainstream. There is also a growing number of inbound tourists, thanks in part to the depreciation of the yen. These tourists enjoy Japanese cuisine and showcase it on social media, further increasing the popularity of Japanese food abroad. Initially, Japanese food was known for its healthiness, starting with sushi. However, this has now expanded to ramen and other types of cuisine, even though they may not be perceived as healthy. Thus, this diversification of Japanese cuisine has been happening in foreign countries.

The Japanese population is currently around 125 million, but by 2050, it is expected to be only 100 million, and by the end of the century, maybe 65 million. This presents a problem for companies on two fronts: a diminished domestic base of food service and a diminished labor pool. For the latter, there’s estimated to be an eleven million worker deficit by 2040. One avenue for addressing this issue is internationalization. How much of your strategy to deal with this issue is based on internationalization, and how are you responding to the population crisis in general?

The huge population decline and the aging of the population in Japan is indeed a big issue. With the aging population, food demand is gradually shifting. It now looks more like hospital and nursing care food, where although the elderly may not be able to chew, they want to have a great food experience. As a trading firm and food producer, it’s important that we provide solutions to these new demands, and that’s also a new business opportunity for us. At the same time, our rule is to cater to those in Japanese society who are vulnerable to natural disasters, especially earthquakes from the Nankai Trough. There has been a warning, and there is an increasing chance of a massive earthquake, so it’s important for a trading firm and food provider to create a robust food distribution system network that can provide emergency food for business continuity planning (BCP) purposes. While considering those issues, the lifestyles of the younger generation are also changing. There are more single households, and women's participation in society will become more active than ever, requiring more support with cooking or food. Thus, we see an opportunity to provide ready-to-eat food and pre-cooked food ingredients. Nozaki’s Corned Beef, which has been popular for over 70 years, is now regaining popularity as an ingredient for home-cooked food because it simplifies cooking. You can cook the corned beef together with cabbage, potatoes, or other ingredients to make a good dish. It could also be used with onigiri rice balls or sandwiches. We also expect more dependence on a foreign workforce in Japan, thus requiring the provision of food for foreign workers, including halal food for Muslims, for example. Thus, we see growing opportunities as a trading firm to import halal food for this workforce. As for our overseas operations strategy, it’s important that we find niche markets where we can have an advantage or food processing strength. Rather than competing directly with major trading firms, we want to focus on the areas where we have a strength.

Japan’s fishing industry embraces sustainability and aligns with Sustainable Development Goals (SDG) 14. We’ve seen this through fishery act reforms, conservation policies, and international commitments like the WTO fisheries subsidies agreement. Studies by the Norwegian School of Economics and the Tokyo University of Marine Science and Technology say that such initiatives could boost fish populations by 30% and could generate $5.5 billion annually for Japanese fisheries. As a trading company that handles seafood products, what are you doing to help preserve the marine environment, not only here in Japan but globally?

We don’t have much of a global-based marine business. We have a factory in Malaysia which acquires raw fish to make a processed marine food in can and pouch. Having said that, we are a member of the Earth Island Institute (EII) to protect marine life and the marine ecosystem. We have a portion of the canned tuna export business to the Middle East, so as part of EII, we are taking a proactive perspective regarding sustainability.

I think the drive for sustainability is part of a bigger conversation, which after COVID is about people demanding faster, better, quicker, more cost-effective life experiences and foods. How are you responding to these consumer trends?

Canned food offerings are ready to eat, so they satisfy the demand for quick and easy food preparation. They are especially popular in the US. In Japan, people commonly purchase raw vegetables, but in the US, canned vegetables are quite popular. For example, in the US, whenever there’s a party, canned crab is used with canned bean sprouts and other Chinese vegetables and cooked in a minimal time frame, so it’s easy, quick, and delicious. Online shopping is also a major sales channel. On the Amazon US site, we have a GEISHA brand store page where we highlight our GEISHA products to make it convenient for customers to choose and order.

Your company was founded in 1893, and you’re now a food trading company dealing with seafood, fruit, meat, and beverages. You have a strong international presence in North America, Southeast Asia, Africa, and the Middle East. What do you believe are your company’s main strengths that have made you into what you are today?

Kawasho Foods’ strength is that we have strong brands, including GEISHA, Nozaki’s, and KINGCUP. At the same time, through our long history, we have established a comprehensive supply chain and a network of suppliers, food processors, and sales channels. Our GEISHA brand is very popular and well-known in the US market and has a long history there. The core canned product was oysters, but that has diversified into vegetables, fruits, and other canned products as well. In West Africa, we have a dominant market of cannned mackerel in tomato sauce. Our London staff has taken our GEISHA canned food by hand carry and sold it across West Africa by hand, and now it has become very popular, even becoming a part of the national dish. In West Africa, especially in Nigeria and Ghana, where GEISHA products are very popular, we have commemorated the 100th anniversary in Year 2011. We have started a donation program at elementary schools for school supplies, and this year is our 14th year (2024). I visited Ghana myself to hand out the donations with our parent company, JFE Shoji. We are continuously supporting the development of these regions through our GEISHA products by providing safe and sound growth for the children and society.

A large part of your business is trading seafood. You also trade fruit, agricultural, livestock, and other products. How do you expect this area of your business to develop over the next five years?

As a trading firm, we want to continuously pursue a mission of providing protein throughout the globe, regardless of the social situation, including areas that are suffering from natural disasters or conflicts. Well-preserved canned and pouched food has a long shelf life, which has a lot of benefits, including reduced food loss and improved sustainability, so we want to continue to pursue this mission. As for how the business will develop, we believe the US and the Middle East have the biggest potential, so we want to strengthen our product lineup for those markets. We are also looking into opening up new markets with growing populations, including Southeast Asia, Africa, and South America. We see good business opportunities in transporting and exporting products made in China and Southeast Asia.

Can you tell us what that strategy for internationalizing looks like? Is it mergers, acquisitions, or joint ventures? Is it seeking global partnerships? If it involves partnerships, what does the partner of choice look like to Kawasho Foods?

For our overseas strategy, M&A could be an option, but we are more focused on finding partners. We are currently trying to expand the number of suppliers. We have a partner factory in China now, but with the change in the political landscape in the US, there may be higher tariffs, which could affect the situation, so it’s important that we diversify out of China into locations such as Vietnam to accommodate this new political landscape. So, strengthening our suppliers and then finding and opening up new sales channels are our main priorities. We also want to make contributions to Japanese society by providing new alternatives and solutions to pressing issues like aging and the deterioration of the industries like agriculture and fishing. These are difficult issues, but we want to pave the way through them by providing a new perspective or shedding light on new ideas for solutions.

Kawasho Foods is a subsidiary of JFE Shoji. What are the added strengths of being in that ecosystem? How do you strengthen each other?

Our parent company, JFE Shoji, is a steel trader, so we don’t have a direct collaboration. However, among the JFE group companies, we are known as a pioneer in opening new markets. But we still garner trust and reliability by being part of the JFE group.

What was the motivation for partnering with a manufacturer to sell your original brand as a trading company?

Since we have our own original brands wherever we see new opportunities, but we also do OEM on behalf of our clients, so it’s a fine balance that we need to strike. It’s also important that we balance our trading business and our original brands because being too reliant on the brand business is a risk. The business could go in multiple directions. We’re not wholly dedicated to supporting our own brands. Rather, we also consider working with local suppliers and partners on OEM brands to be another option to penetrate the market. We are doing our own business as well as OEM brand business for our clients. The market dictates the best direction to take.

Trading alcoholic beverages is another aspect of your business. Specifically, you have an alliance with a major Korean beer manufacturer. Is this something you want to replicate with other companies? Will we see more alcoholic beverage collaborations?

We’re looking to replicate the same business model in the beer industry at other countries than Korea. That could take the form of developing our own original brand, or it could be clients’ OEM brands. We’re looking into the market very carefully.

We’ve briefly touched on two of your popular brands, GEISHA and KINGCUP. Which of these brands do you believe has the greatest potential for margin growth in the future, and are there any new products or brands you can tell us about?

Our Brand line are GEISHA, NOZAKI`s, KINGCUP. Then, NOZAKI`s is mailnly sold at Japan market and KingCup is mainly sold at Malaysia market. On the other hand, GEISHA is a brand that is expanding widely at th global market. As for GEISHA, we would like to expand our product lineup and expand not only into existing markets such as the United States and the Middle East, but also into emerging markets with growing populations.

As someone who’s eaten corned beef since I was a child, I can really connect to it, and the idea of people using it with other ingredients to make tasty dishes. How are you educating people about the benefits of corned beef, or what actions are you taking to make it more universal?

We want to stress the easy access to the animal protein as preserved food, and how it’s easy to use, and its delicious taste. It’s not an alternative to beef. Rather, it’s something completely different that deserves its own category. In China and the US, so there are many people who are already familiar with corned beef, and we want to actively promote our products to those who already have an affinity for corned beef.

You have newly created the purpose phrase "Beyond Taste, Enriching the World" of company now. What does that phrase imply?

We are needed. The world's desires for "food" change with every passing day. We stand at the forefront, accepting those desires and pursuing value that goes beyond just "taste." And fill the world with the happiness that food brings. A brand that has been loved for over 100 years and the partnerships we have built are proof of trust. We will carry that trust into the next 100 years. Enrich food. Bring more happiness through food.

Let’s imagine that we will come back in four or five years to interview you again. What dreams and goals would you like to accomplish over those years, and how would you like your company to be seen through the eyes of the global market?

In four or five years, when you come back to interview me again, I hope to explain to you how our new businesses in Japan are contributing to the mitigation of the problems that occur with elder care and primary industries. At the same time, it’s important to diversify our business portfolio. We are currently building a robust foothold in the US and the Middle East, and expanding into Africa and South America is the next target. As for how we want to be perceived overseas, we’re now generating a purpose, and through our food distribution, we want to create happiness and a peaceful society through the provision of delicious, safe food.

To read more about Kawasho Foods Corporation, check out this article about them