Leading Supplier of Spices, Wasabi and Curry Expands Globally

Japanese food exports have increased in the past decade to JPY 1.45 trillion last year, and this is reflected in the popularity of Japanese cuisine around the world. The number of Japanese restaurants has more than tripled in the last ten years, to almost 200,000. How do you account for this growing popularity?

I've been watching the trends of inbound tourists, and 20 or 30 years ago their preference was for things like sushi, tempura, sukiyaki and shabu-shabu. About ten years ago, I noticed a difference in the preferences of these tourists. They started going to local soba stands, or they tried the curry rice or the tonkatsu (pork cutlet over rice), or ramen, so I think foreigners have started to learn that ordinary Japanese cuisine, which is cheap and quick to eat, is also delicious.

A big turning point was 11 years ago, in 2013, when Washoku was designated as UNESCO Intangible Cultural Heritage and that has garnered a lot of attention. Another huge turning point was in 2022, when Taste Atlas, which is a global tourism and food website, made a ranking of popular foods globally, and number one was Japanese curry. For three years during COVID, I could not go overseas, but in 2023, I started traveling again to see various markets. I visited London, the US, Australia, Singapore, South Korea, Taiwan and Hong Kong, and what was surprising was that London had many Japanese curry shops and they were very popular.

The government wants to push these exports even higher. It has set an ambitious goal to raise exports to JPY 5 trillion by the end of the decade. To do this, it has been pivoting towards a more internationally focused approach, setting up global food initiatives and funneling more resources into overseas marketing and human resource development. Do you think that this JPY 5 trillion target is achievable by the end of the decade, and if so, what sort of steps do you think need to be taken and what opportunities does it provide for Japanese businesses?

S&B Foods is part of the Japanese Curry Industrial Association, and this association has been designated by the Ministry of Agriculture for overseas promotion, so together with the government, we are now actively exporting Japanese curry. Japanese curry by itself is not enough to accommodate the huge target of JPY 5 trillion in exports in ten years, so it's important that not only curry makers but also Japanese sake, processed foods, condiments, seasonings and other food product manufacturers work together to create robust Japanese food exports.

There are many other cuisines, like teppanyaki and okonomiyaki, that would surely be popular once they are introduced to the global market. In order to do so, we not only have to introduce those Japanese cuisines, but we also have to export the ingredients to make it more accessible for people to learn how to cook those dishes. In addition to foods, Japanese sake and other alcoholic beverages, like whiskey, are now getting more popular globally. Another advantage of Japanese food companies is the quality and the branding. S&B Foods curry packages sell very well globally, not only because of the taste but also because of the S&B brand, and because it’s made in Japan and is of high quality and reliability.

I was surprised to see the result of Newsweek’s World’s Most Trustworthy Companies ranking last November. They have the list categorized by industry. In the financial and tech industries, there are no Japanese companies listed, but in the food and pharmaceutical industries, there are many Japanese companies listed. It clearly shows how Japanese quality and Japanese companies are trusted for things that are consumed by people.

You mentioned the importance of not only exporting ingredients but also the knowledge about cooking Japanese cuisine. One thing that poses challenges for companies that are exporting food is the different regional tastes. If you think of Japanese sushi versus sushi you get in the United States, it’s completely different, or food in Thailand is going to be far spicier than in many other countries. To what extent have you had to change the flavor profile of your products for foreign markets?

The biggest hurdle for exports is the regulations that are imposed by each country. For example, when exporting retort curry packages to the U.S., we cannot have any meat in the package, and that has been a huge hindrance. In fact, our R&D for products to export overseas has such a high hurdle that, for example, we cannot even use the meat broth or stock, so we have to replace it with a plant-based alternative.

S&B Foods has five overseas offices, in Los Angeles, New Jersey, Vancouver, London, and Singapore, and our Japanese and local staff work together to do market research of each local market and they then collaborate with the Japanese R&D department. We are constantly upgrading and adapting the taste to local preferences.

As you mentioned, sushi is very different in Japan and the U.S. Japanese sushi is more of a nigiri style, whereas U.S. sushi is more of a roll. Japanese consider that to be inside out, where the rice is outside, and the seafood is inside.

You mentioned your research and development, which is obviously important in studying the relationship between the spices and the different flavors. You also have your Oshino experimental farm where, in the shadow of Mt. Fuji, you can research and cultivate different spices. You’re also reconstructing wasabi fields in Yamanashi prefecture, which has been a core of your business. What are the advantages of your R&D process and how does it benefit your products?

Our company was established in 1923, so we commemorated our 100th anniversary last year. We are the number one company for spices, herbs, wasabi and curry. For those 100+ years, our mission has been focusing on providing the best tasting and highest quality spices and condiments. We also have our own farm in Tsukuba, where we produce fresh herbs like basil and parsley, and we distribute those across Japan. As the number one wasabi company, we have a farming base in Yamanashi and our research center is in Oshino. We have also been reviving a wasabi field that has been abandoned for over 50 years.

Historically, herbs and spices have been used not only to elevate the taste but also to preserve food. For example, pepper was used to preserve meat. Herbs have also long had a medicinal usage, such as in Chinese herbal medicine, with Ayurveda in India, and even the Italian Medici family used herbs to heal people, so there’s been this tradition of using natural herbs for a health benefit.

S&B 100th anniversary video “Our lives with Spices & Herbs”

On top of our core spices business, we are diversifying our products to the functional foods and supplements sector. For example, we launched a kale powdered drink about four or five years ago. We sell it through our e-commerce channel and it has been recognized as a healthful product by the National Consumer Agency. One of its benefits is that it lowers the blood pressure. We have also been doing research on saffron, which is a flower petal used for coloring and in dishes like paella. It helps people sleep more deeply.

S&B also actively works with academia to research the health benefits of the spices, and recently there has been a new breakthrough, which is a new extract from a spice that was found to be effective in mitigating the risk of becoming infected with influenza. Hay fever is also something that many people suffer from in Japan, and our research has shown that coriander extract is effective in mitigating the adverse symptoms caused by cedar tree pollen, so once we can make a product out of this coriander, that would be very helpful in reducing hay fever. Another discovery is that petroselinic acid from fennel seed is effective in maintaining oral health and reducing the risk of oral diseases.

For the past 100 years, we have been focusing on developing good tasting, high-quality spices. For the new era, we are focusing on developing functional food that can contribute to the well-being of people globally, and we are now doing academic research to gather this evidence.

We are also trying to tackle the big Japanese social issue, which is the aging and declining population. Our Golden Curry was developed quite some time ago, and it feeds 11 people, and we have kept the same package throughout the years. In the past, families typically had two children, so four people per household, and they usually take a second serving of curry, so using this 11-person pack was good to eat and still have some leftovers for the next day. We have changed the packaging so one powder package can serve two people, with four packages in a box, so that is well suited for current Japanese households.

With the demographic changes, since this curry uses oil to condense, it’s a bit too oily for the older population. Seven years ago, we saw this situation coming and developed a new way of making the curry roux that is less oily. Interestingly, the curry market was dwindling in the 2021 and 2022 season, but when we launched a new powder roux that is oilless in 2023, along with the new package sizing, suddenly the curry market grew again.

As for our management philosophy and strategy, we would first like to consolidate our foothold in the domestic market, which is about JPY 100 billion. We want to continuously expand that market, and we will use the profit from the domestic market to invest in overseas market development. Our target is to strengthen overseas and have a ratio of 40 percent sales from overseas. At the same time, we are trying to diversify by creating a new business based on the health benefits of spices and herbs.

We are also introducing a new upcycling business. When I visited a chicken factory, I realized that there are many parts of the chicken that get discarded without use, and the Japanese spirit of mottainai, which conveys a sense of regret over waste, motivates us to make the best use of everything. When I visited the U.S., I found a chicken broth product, which is actually artificially made but tastes good, so I realized that by taking all the discarded chicken parts, we can make a pure and thick chicken broth. This is a product that we have created over five years of research and development, and it uses gelatin to add texture to the broth. It could be used not only in washoku but also in paella, the Spanish dish, and biryani, the Indian Hindi dish.

Is it available internationally?

Not yet. We just launched it this year domestically, and due to overseas regulations on poultry, we may need to establish a local supply chain in other countries, but we are not yet at that stage.

The Good Food Institute, a research think tank, has found that consumers between 16 and 40 years old in ten different countries will pay a premium for meat-free food products, not only out of ethical considerations but also for dietary reasons. Could you tell us a little about why you launched a plant-based Golden Curry, and what kind of consumer segment you see as the target market for it?

Initially, curry required meat to enhance its taste, but due to import regulations in Europe and the U.S., we developed this plant-based alternative curry that still tastes good and can be a part of our export product line. I understand many Western consumers are now moving on to plant-based alternatives for environmental reasons, because cattle emit a lot of environmentally harmful methane gas. At the same time, plant-based food is better for their health as well, so from these two perspectives, I believe that the global mega-trend has been developing.

Before COVID, plant-based alternative hamburgers became popular in the U.S., so I went there to try it out myself. When I visited a hamburger shop that carried both the meat and plant-based alternatives, I asked and was told that about 5 percent of the customers chose the plant-based alternatives. That was four or five years ago, and I believe the percentage has risen since then, but even though there are some hamburger shops in Japan that are providing alternative-meat options, the Japanese people seem to have lower interest compared to Westerners. I think the reason is Japanese food habits and also the price, which is still higher. Once the price comes down to the same level as meat, then it may be more popular globally.

Last year, you launched a new midterm strategy which will extend through 2026. This fits within a larger management plan, as you mentioned earlier, to increase your overseas sales ratio to 40 percent; to accelerate research into spices, herbs and different cultivation; to develop your human resources; and to implement digital transformation (DX). Since you introduced this plan, your revenue has increased by 5 percent and your net profit has increased almost 50 percent to JPY 6.7 billion. What are some of the core strategies of this new plan that are helping you to achieve these results?

In terms of spices and herbs, with the population decline of Japan, the market will shrink. When I was in the marketing division, I worked with a company called Nielsen. I asked them to do market research on the percentage of people using spices in Japan and the U.S., and the data shows that Japanese people use only one-tenth the amount compared to the U.S. People in the U.S. use cinnamon 35 times more than Japanese people. Therefore, compared to the U.S. market, the Japanese market is still underdeveloped in terms of spice usage, so our company sees huge potential in the growth of the Japanese spice market.

For curry powder, we have been developing options that are healthier and that cater more to consumer preferences. For spices and herbs, besides marketing their functionality, we are trying to promote new ways of using them through the promotion of new recipes. We also see huge growth potential for Chinese condiments and Italian pre-made sauces. With these current and newly developed products, we want to strengthen our domestic market.

You have a presence around the world already in many countries, like the U.S. and the U.K. Are there any countries in particular that you’re targeting for your overseas expansion, and are you looking to pursue this expansion through distributors?

About 50 percent of our overseas accounts come from the U.S. market, 40 percent from Southeast Asia and Oceania, and 10 percent from Europe and Africa. We want to first strengthen our U.S. market presence and then focus on Southeast Asia, Oceania and Europe. For the U.S. market, our product has traditionally been sold in Japanese and Asian supermarkets in bigger packs, but recently we have repackaged into smaller packs and started selling in the mainstream supermarkets like Walmart and Kroger. We have also been strengthening our U.S. market sales by doing demonstrations and tastings in the supermarkets and in exhibitions. For distributors, we have aprons, T-shirts and tote bags, and for consumers we provide a curry rice spoon. For the past two years, we have been strengthening our social media appearance, and on Instagram we currently have over 70,000 followers, which is number one by far among all the Japanese food manufacturers.

Golden Curry is number one and wasabi is number two in our product lineup. Foreigners usually eat wasabi with sushi, but we want to introduce new ways of eating it, so we have added a picture of meat with wasabi on the package.

Have you partnered with any kind of local cuisine influencers?

Not yet, but that’s in our plan, especially in Germany and the U.S. We hope to find good partners with local chefs to promote our spices in their local dishes.

If we were to return to interview you again, on the last day of your presidency, whenever that may be, what would you like to have achieved by then?

What I always say to our employees is that I learned during COVID that food company employees are essential workers. Of course, medical professionals are also essential workers, but the people working at food companies also contribute greatly to the maintenance of people’s health, so it’s important that S&B Foods become an essential company. Everyone working in the company, including myself, will strive to become an essential worker for society.

The vision that I have for S&B Foods is to contribute to the well-being and the happy lifestyle of people through the provision of delicious spices and herbs, which is a bounty and blessing from nature. Based on this vision and philosophy, I want to lead the company to grow the spice market globally.

For more information, visit: www.sbfoods-worldwide.com