The Definition of Wagashi

In 2023, Japan produced nearly 2 million tons of confectionery, including traditional Japanese wagashi, cookies, and chocolate. While Japanese sweets are widely popular domestically, they also enjoy significant international appeal with major export destinations, including China, which accounts for 21% of the total confectionery export value, and the US, Japan’s primary Western trading partner. What makes Japanese confectionery such as wagashi so unique, contributing to both its domestic and global appeal, and from your point of view, what would be its main strengths?

When discussing the growth of Japanese confectionery exports, much of the focus tends to be on snacks sold at convenience stores. Japanese companies produce exceptional snacks, with products like Kit Kat offering a variety of unique flavors that have gained popularity worldwide. However, traditional Japanese sweets, or wagashi, are not as widely recognized outside Japan. Although some companies have begun exporting wagashi, the volume remains relatively low.

Wagashi are known for their natural ingredients, which make them a healthier choice. For instance, our main product, Yokan, contains only sugar, red beans, and agar. The method we use to produce and package Yokan allows it to stay fresh for over a year. Unlike many other sweets, wagashi contain no additives or preservatives, which is one of their key strengths.

Historically, wagashi have been primarily vegetarian or vegan. The word "Yokan" is derived from the Chinese term meaning "sheep soup." Monks brought it to Japan from China, but as they did not consume meat, they substituted it with beans, giving rise to the Yokan we know today. Concepts like sustainability and healthy living have been integral to the development of these sweets over the centuries. Wagashi are not just about taste; they carry historical and cultural significance that transcends their flavor. This cultural richness is another strength of wagashi.

Over the next 15 years, Japan anticipates a significant demographic shift characterized by both an aging population and a declining population. This will lead to a shrinking domestic market as well as a labor shortage. To be more specific, it is expected that there will be a labor shortage of 11 million people by the year 2040, compounded by the population decline. What challenges will this create for your company, and how are you navigating those challenges? Additionally, to what extent must you look for overseas market opportunities to ensure long-term business success?

As you mentioned, a shrinking population will lead to manpower shortages and a reduced domestic market for consumer products. There are also other important factors to consider, such as the performance of the global economy and the impacts of climate change. It is difficult to predict exactly how these factors will evolve. Currently, many people around the world express concerns that food is not healthy. Often, food production follows the principles of large-scale economies, prioritizing high volume to reduce costs and maximize profitability by distributing to as many markets as possible. This approach, however, leads to significant food waste. For instance, countries like Japan and the United States are known for both high food production and high levels of food wastage.

In contrast, our approach to producing Japanese sweets does not follow these principles. Our focus is on creating the highest quality and most delicious sweets possible, rather than solely maximizing profit. This is why I am not overly concerned about the potential impact of population decline.

Nowadays, people are increasingly mindful of what they eat. Our products are considered a luxury, crafted to reflect the seasons, and we only produce what is needed. Even if the population decreases, I believe there will always be those who appreciate and choose our sweets. While the range of food options grows, we are confident that people will continue to seek out the unique flavors of our sector.

One of our challenges is to innovate, even as we uphold traditions. Although we have many sweets with long histories, we must constantly explore new ingredients and develop new methods and techniques to enhance our offerings. Our company has been in operation for 500 years. When we were founded, there were no refrigeration or freezing technologies, which limited the variety of ingredients we could use. Today, we can incorporate fruits like passion fruit and strawberry, which were not accessible back then. We continually seek out new technologies and ingredients to improve our sweets, but our core principles remain unchanged. We will never use preservatives or additives, ensuring that our sweets remain a healthy choice for our customers. From our perspective, we believe our future remains bright, even in the face of changing demographics.

Your company is keeping your 500 years of history and craftsmanship alive while developing new techniques. Japanese sweets are unique when compared to Western sweets. Different countries have different taste buds. In France for example, the sweets taste very different from the sweets in the US which are very sweet. Considering these cultural changes and the growing number of inbound tourists to Japan, are you attempting to also cater to different tastes, or do you stay true to your original recipes and Japanese tastes?

Taste buds and palates are shaped by what we eat, and our food preferences as adults are often influenced by what we consumed in our youth. Today, shops worldwide offer a variety of flavors and snacks, a diversity that was not possible before. As people experience new foods and the exchange of imported and exported products increases, tastes are evolving. In response, we must also adapt.

In Japan, a single ingredient can be used in multiple ways to create distinct textures and flavors. For example, mochi rice can be used in its natural form or processed into various types of powders. Shinko, a coarse powder, is used for sweets like shinkomochi, which has a chewy texture. A finer version, mochiko, creates a smoother consistency, while the even finer shiratamako is used for making shiratama. Processed mochi rice also gives us gyuhi, and dried mochi powder, known as kambaiko, is used in rakugan. This variety shows how one ingredient, mochi rice, can be processed into different forms, each resulting in a unique texture and taste. The same is true for soybeans, which are used to make products ranging from edamame to soy sauce, miso, and tofu. Just as the French have perfected wine and cheese, the Japanese have mastered the use of their traditional ingredients.

Recent trends, however, show that preferences are shifting. People today are more adventurous and curious about new flavors. The traditional way of enjoying wagashi was by appreciating subtle differences in texture and ingredients, but now there is a growing interest in exploring new and distinct tastes. While we remain committed to our traditional approach, especially in using various types of mochi powders, we are also open to innovation. For example, this year we introduced sweets made with Mirabelle plums from France, creating a new type of Yokan. This kind of fusion was something we could not have done in the past, and we enjoy incorporating flavors from other countries.

Japanese craftsmanship is renowned, and our manufacturers have earned global trust for their quality. While preserving our methods and techniques is important, we recognize that excellent ingredients are not exclusive to Japan. Countries like France and China also produce high-quality ingredients, and we want to explore using them in our products. For instance, we are planning to introduce sweets made with pistachios, which, while not native to Japan, are now readily available. This global approach allows us to innovate while staying true to our roots.

The Japanese are great for taking foreign ingredients and recipes and producing great products from them. One thing that makes Japanese cuisine unique is that it is always evolving. Japan is expected to receive 30 million tourists this year, of which an increasing number are returning visitors. The second time they visit, instead of doing the flagship tourist attractions, they try to find more authentic cultural experiences that of course involve food. What opportunities do these rising tourism numbers represent for Toraya? We know that this year you reopened your Toraya Ginza store. Are there any strategies or developments you are creating to cater to this increase in tourism?

Our Ginza store serves as a showcase for our sweets, where we have created counter seats for visitors to enjoy freshly made confections. There is a universal appeal to food that is freshly baked, so we prepare the sweets right in front of the customers, providing them with a memorable experience. This also includes sweets made with fresh fruits. Typically, our products are packaged and taken home to be enjoyed later. However, by exclusively producing packaged sweets, we lose the opportunity to offer fresh flavors. At our Ginza store, customers can savor sweets made with fresh fruit ingredients, prepared on the same day. This is one of the ways we aim to attract visitors from around the world.

We also offer a small Yokan called "Chigusakan," which resembles French pâtes de fruits. While the concept is similar, we use agar instead of gelatin, and combine it with bean paste. Our Chigusakan comes in a variety of flavors, including passion fruit, banana, matcha, and even sansho, which offers a more unique taste. These new flavors and ingredients help us cater to both younger Japanese consumers and tourists. As the preferences of younger generations in Japan evolve, we see it as essential to adapt to their changing tastes.

When it comes to international expansion, we have experimented with pop-up stores in Singapore. However, the results were not exactly what I had anticipated. Generally, the taste preferences in East and Southeast Asia are quite similar compared to those in Europe or the US. Since Singaporeans have a strong appreciation for Japanese cuisine, I expected our sweets to be well-received. However, I realized that Singapore’s tropical climate plays a significant role in their food choices. With an abundance of delicious tropical fruits like mangoes and pineapples, sweets are often enjoyed through these natural flavors. Personally, I also love these fruits. In cooler climates, chocolates and other sweets are easier to consume, which is why our sales in Japan tend to be higher during the winter months than in summer. It’s not just about taste; the environment and climate are also crucial factors in influencing preferences.

I have mixed feelings about localizing our operations. If we try to adapt everything to suit everyone, we risk losing the uniqueness that sets us apart. At the same time, it’s clear that food preferences are influenced by location and season. To appeal to customers, we need to consider the environment they are in, offering something that suits the climate and context.

Your company’s philosophy of walking together with your producers demonstrates your dedication to working closely with those who produce the raw materials that define your products. This approach not only ensures consistent quality but also fosters mutual growth and respect between Toraya and its suppliers creating a strong enduring bond that goes beyond simple transactions. We saw that you sent some of your employees to work with your suppliers. What criteria do you consider when selecting and collaborating with these producers, and how do these partnerships influence the quality and consistency of your products?

The two most important factors for us are sustainability and quality. We always strive to source the best quality raw materials, but sustainability is equally crucial. For instance, if we partner with an excellent farmer who decides to stop farming in five to ten years, it would pose a challenge for us, as we must ensure consistent production of the goods our customers expect. Therefore, it is essential that our suppliers have long-term plans to continue producing specific raw materials; otherwise, it would be difficult for us to do business with them. Sometimes, we need to hedge our risks. For example, we source beans from Tokachi in Hokkaido. Even within Tokachi, the different areas can vary greatly, and the climate affects crop quality. During hot summers, better azuki beans tend to come from the northern part of Tokachi, whereas cooler summers favor the southern regions. We always aim to purchase from farms for as long as possible, but crop quality can fluctuate. While one farmer may produce excellent beans this year, another may excel the next. This variability is why we cannot rely too heavily on a single supplier.

Another example is our use of black sugar from Okinawa. Several islands in Okinawa produce this sugar, and we have maintained a long-standing relationship with Iriomote Island. We frequently ask them to conduct experiments, and we utilize our lab facilities to assess the quality of the black sugar they produce. Since the quality and processing of black sugar can vary from month to month, it is essential for us to ensure it meets our standards. Given that there are no lab facilities on the island, and local producers do not conduct tests themselves, we collaborate closely with them, even visiting to conduct activities that help in producing the black sugar we need.

We are also developing new varieties of azuki beans in partnership with local researchers and farmers. Building long-term relationships with our producers is critical for these kinds of initiatives. Our outlook is focused on the long term. Currently, we are working on producing white beans, but it takes about ten years to develop a new variety. From a business perspective, this kind of investment is rare, as the returns take too long to materialize. We are fortunate to be a long-established company, and our suppliers generally share our mindset. Farmers typically do not quit after just ten years, and we work together to develop even better ingredients for our customers. I often visit the farms myself. For example, at a sugarcane factory, I discovered records of orders placed by the 14th generation of our company. As the 18th generation, I found it remarkable to see our company’s orders in their archives dating back over 100 years.

I often visit Iriomote Island in Okinawa and know that the island is very wild. I did not know that you had any producers there.

Japan’s southern islands have a long history of black sugar production. Even Ogasawara Island, located 24 hours by ship from Tokyo, is known for producing black sugar. Historically, many of these southern islands were remote and uninhabited.

Quality control can be challenging because subsidies are provided to farmers regardless of the quality of their products. However, there are farmers who take pride in their work and care about maintaining high standards. We emphasize the importance of quality to them and offer any support they might need. Over the past 20 to 30 years, we have built strong relationships with the producers on Iriomote Island. While we do not engage in extensive collaborations with other brands, establishing and maintaining close ties with our producers is essential to our business.

Are you interested in forming any production alliances in other countries?

Yes, we are open to that possibility. While we do not have a specific plan at the moment, the uncertainty of climate change means we must be adaptable. For instance, we cannot be sure if we will still be able to grow azuki beans in Hokkaido 20 or 30 years from now. Fortunately, we have a strong infrastructure for transporting goods, so if other countries can produce high-quality ingredients, we would be interested in partnering with local producers there.

It is also much easier to collaborate with those who have experience with similar products. Azuki beans, for example, are quite specific, and not all farmers can successfully cultivate them. Without the right experience, it can be challenging to produce azuki. However, many farmers in other countries are skilled in growing various types of beans. With their existing knowledge, they might be able to grow azuki as well. Starting from scratch would be difficult, but having a foundation of expertise makes it more feasible.

One of the amazing things about your company is the in-store experience. I would love to visit your Akasaka store. The staff is great, and the products look beautiful. It is a great experience. Nevertheless, since the COVID-19 pandemic, even Japan’s luxury craftsman brands have developed their E-commerce platforms. This was a result of certain measures from the government during the pandemic. However, it has also been a great way to export products. What has been your E-commerce development and strategy? Is it something that you are betting on?

Somewhat, yes. E-commerce is certainly more streamlined than operating physical stores, which require trained staff. However, having stores remains very important because our staff provide excellent service and share valuable knowledge about our sweets with customers. At the same time, the internet is a strong marketplace that can help reduce costs. Lowering costs is crucial because if our expenses were higher, we would need to raise our prices, which could make us less competitive. Balancing this is especially important when exporting our products. E-commerce offers an effective way to manage this, and it is one of the approaches we are actively considering.

There is a fundamental difference between fashion and food: taste preferences develop through direct experience. Fashion can easily follow trends; for example, if a fashion icon wears a certain style, it can quickly become popular. With food, however, it takes more time because people need to develop a taste for certain flavors. If someone has never eaten raw fish, they might hesitate to try it because it's an acquired taste. In Japan, online sales are growing because people are already familiar with our products. However, this familiarity does not always extend to consumers outside of Japan. Unlike fashion, where trends can spread quickly, food requires a more personal, gradual approach. Some foods simply may not appeal to everyone, as is the case with sushi.

The same can be said for Japan as a whole. From my perspective, Japan is not necessarily for everyone. It attracts those who care about details and appreciate the nuances between "A" and "B." Not everyone needs to visit Japan, and not everyone has to like Japan or our products. However, if there are enough people who appreciate Japan and our sweets, that is more than enough. Our goal is not to maximize profit; rather, it is to craft the best sweets we can and share them with our customers. If some people enjoy them as much as we do, that is wonderful. And if others do not, that is perfectly fine too.

Some of your sweets are only available in certain areas of Japan. For example, your Kumoinichi product made with matcha bean paste is only available in Kyoto, while your two Wind of a Thousand Miles products named after the tiger of the shop are limited to your Akasaka store. How do these regional products reflect the unique characteristics of their respective areas, and what benefits does this exclusivity bring to both the brand and the customer experience?

We design our products with the expertise of skilled artisans and offer a wide range of items. However, the manpower needed to produce each product is limited, so some are made on a smaller scale. These exclusive items are only available at select stores. Whatever we create for a specific area must have a meaningful connection to that region.

For instance, we produce a special Small Yokan for Kyoto that features white miso from Honda Miso Honten, a 200-year-old company that developed Saikyo white miso. This ingredient holds historical significance for the city, which is why we produce it in limited quantities and sell it exclusively in Kyoto.

We consider Japanese sweets to be the "Art of Five Senses." While food can simply be food, it can also evoke the imagery of the seasons, allowing us to enjoy it on a deeper level. We do not just consume food for sustenance; presentation plays a significant role. Even if the taste remains the same, poor presentation can diminish the overall experience. This is why French cuisine is so artistic—though the flavors might be similar, the presentation elevates the dining experience.

The use of local ingredients and the stories behind them also enhances the appeal of our sweets, especially for people from those regions. Gifts featuring ingredients from a particular area carry a special sentiment. Although our sweets can be produced in different cities, those made in their original location hold a unique authenticity and sentimental value.

The look really affects the taste. There was a very interesting story done by a French culinary store where they cooked exactly the same thing but one was plated by a Michelin Star chef and the other was plated like you would find in a bistro. Everyone thought that the beautifully plated food tasted better even though it was the exact same food.

We have a sweet called "Wakabakage," which features a goldfish motif. The name "Wakaba" means "new leaf," while "kage" refers to "shade." I was once asked why we did not simply name the sweet "Goldfish." The reason lies in the imagery. During summer, new leaves emerge, providing shade around ponds. Without these leaves, the goldfish would be exposed to the heat. The coolness of the shade under the fresh leaves creates a soothing image. By telling this story, customers can envision the scene and feel a sense of coolness, enhancing their enjoyment of the sweet. These narratives and the thoughtful presentation of our sweets are deeply rooted in our history and culture.

Where do you get all of the ideas for the colors and designs of your original sweets?

These ideas stem from our company’s philosophy, which has been passed down over generations. We strive to carry our history and culture into the way we create and present our sweets today.

The production process for your primary offering Yokan begins with boiling red beans and white azuki beans to create a specialized bean paste. You offer a diverse range of Yokan varieties such as the Plum at Night Yokan named for the resemblance of the cut azuki beans to plums at night, Omokage which has a nostalgic brown sugar flavor, and the seasonal Yokan chestnut, an Autumn exclusive made with freshly harvested chestnuts. What distinguishes your Yokan manufacturing process making it popular with consumers and enabling you to offer unique seasonal varieties?

Firstly, we have been making Yokan for centuries, and over that time, we have crafted many different varieties. Yokan can take on various shapes, and the precise methods used to make it require a high level of skill. Our artisans have honed these skills, and this craftsmanship has helped us earn recognition for our Yokan. It is not easy to replicate their expertise, and we are able to produce a wide range of Yokan, which sets us apart as a company. As mentioned earlier, Yokan has a long history. Agar, a key ingredient, was developed over 350 years ago as a plant-based alternative to gelatin, made from seaweed extract. Before the introduction of agar, Yokan was made with rice powder or flour and was steamed. This was the original form of Yokan, which later evolved into the version we see today. Our company has been a part of this journey, contributing to the evolution of Japanese sweets, which has helped build our credibility.

For at least 18 generations, we have had the honor of providing sweets to the imperial family. Throughout our history, we have many stories of how our sweets were made. Even now, we continue to innovate by incorporating new ingredients, such as Mirabelle plums, to ensure our sweets remain relevant and appreciated today.

The history and culture that the company has amassed through time is truly fascinating. When it comes to your international operations, we know that you have had your store in Paris since 1980. During our research, we learned that you also had a store in the US at one point which has subsequently closed. Looking to the future, are you planning to open new stores overseas?

Yes, we are considering opening new stores overseas, though we do not have any specific plans in place at the moment. Timing is crucial. For instance, opening a sushi restaurant today is very different from doing so 30 years ago. Our store in Paris has been quite successful, but it was not always easy. I’ve heard from my predecessors that, in the beginning, there were not many customers, which made it challenging to operate. Now, however, many Parisians visit the store. While I don’t want to generalize, I believe that French people have a genuine interest in history and culinary culture. Even if they are unfamiliar with something, they are often curious to learn more about it.

On the other hand, Americans can be quite direct. If they try something and do not enjoy it, they might simply express that it’s not to their taste. That said, tastes do evolve over time, and there is growing interest in different cultures. For example, more people overseas are enjoying ramen and sushi, and we see that many young people from the US are beginning to appreciate our Toraya sweets. We opened our store in the US in 1993, and it operated until 2003. Looking back, it might have been a little early for us to open there, as the perception of Japanese culture was different at that time. Things have changed significantly, and if the timing feels right, we will certainly consider opening more stores overseas. However, it is essential that any expansion is sustainable for us.

Do you have any particular locations in mind?

It’s difficult to say for certain, but any new store would likely be in international cities or areas close to them. If we were to open stores in the US, New York or perhaps Los Angeles would be our main considerations. I feel it might be easier to expand in Europe, as people there tend to be more open to exploring food from different cultures. We already have a lovely store in Paris, so we are not looking to expand further in Europe at the moment. Dubai is another intriguing possibility, and it might be the best choice among Middle Eastern cities. In Southeast Asia, Singapore would be the city we would consider. However, we would not undertake this alone; finding a reliable local partner would be an important part of our strategy.

At this time, we are not in a rush to expand, but we are certainly interested in exploring opportunities overseas because we value and admire the cultures of other countries. We learned so much from our experience in France, and it gave us a chance to grow. Now, we are running restaurants in collaboration with “Restaurant KEI”, a 3 Michelin-starred restaurant in France. Kei Kobayashi is a Japanese chef who specializes in French cuisine. As I mentioned earlier, France’s culinary culture is remarkable, and we have great respect for their sweets. We are always eager to learn, so we can continue to improve as confectioners. While Japanese sweets have deep-rooted history and tradition, we have also gained valuable insights from China and other countries. We hope to keep learning from diverse cultures, enhancing our techniques and ingredients to refine our craft. Chef Kei shares our passion for creating exceptional desserts, which is why we make a great team. Collaborating with professionals like him helps us grow and improve our skills.

Regarding the US, New York and Los Angeles are both appealing options. I am familiar with the East Coast, but there is also a large Asian community on the West Coast, which could be beneficial. That said, we are interested in engaging with people from all backgrounds, not just within the Asian community.

It was very interesting to hear you speak about the 500 years of tradition and history that your company has gained. You mentioned that you are the 18th-generation president. Is there an ultimate goal or ambition that you would like to achieve during your generation of leadership before you pass the baton to the next generation?

Toraya is well-regarded in Japanese society, and we are grateful that our Paris shop has helped us gain appreciation from many people there as well. However, we understand the importance of maintaining this reputation. If we don’t continue to do our best, there is a chance that in 20 or 30 years, the next generation may see Toraya differently. It is our responsibility to ensure that future generations continue to view Toraya with the same respect as today. Our aim is to keep improving our sweets by exploring new ingredients and enhancing the quality of those we already use. We hope to make Toraya more relevant on a global scale. For example, we envision a future where people in Africa can also enjoy our Yokan. The blending of different culinary cultures can lead to even more delightful flavors. Personally, I have a deep passion for food, and I am always eager to discover and create better flavors. My goal is for us to continue making high-quality sweets and sharing them with the world.

For more information, visit their website at: https://global.toraya-group.co.jp/