Tohei Trading: Redefining Delicious with Mishima Croquette and Beyond

For eleven consecutive years, Japan’s food-related exports have reached record levels, hitting JPY 1.45 trillion in 2023. This surge aligns with the growing global popularity of washoku, or Japanese cuisine, worldwide. From your perspective, what factors have driven this significant increase in Japanese food exports, and how is your company leveraging this trend?

One key factor driving the rise in Japanese food exports is the increase in inbound tourism. The Japanese government is actively promoting tourism to counteract the country’s declining population, with a target of 60 million inbound tourists by 2030. We are already on track, having reached 38 million visitors in 2024. As more tourists experience washoku during their stay in Japan, they take that experience back to their home countries, which helps fuel interest and demand for Japanese food abroad.

Another important factor is Japan’s low food self-sufficiency rate, which results in more imports than exports. With the domestic market shrinking, expanding food exports—particularly in the food tech sector—has become essential. The government is supporting this initiative by offering more subsidies to promote Japanese food exports.

In our case, we started exporting to China and Singapore after participating in exhibitions organized by prefectural governments and attending seminars hosted by the Japan External Trade Organization (JETRO) and the national government. These events helped us recognize the potential of overseas markets, and in that sense, the government’s efforts to connect companies with international opportunities have been very effective.

While dishes like sushi and ramen are unmistakably Japanese, many non-Japanese foods have been reinterpreted and, in some cases, refined in Japan. For example, CoCo Ichibanya is successfully expanding its take on curry in India, UCC has made a name for itself in the coffee industry, and Meiji has elevated chocolate in the Japanese market. As a Japanese company adapting a foreign dish, what distinguishes a traditional croquette from a Japanese-style croquette? What unique elements define the Japanese reinterpretation of this classic dish?

Japanese korokke (croquettes) were originally inspired by Western-style croquettes. This dish, made by boiling and mashing potatoes before deep-frying them, has become widespread and is now very popular in Japan. The distinguishing feature of our Mishima Korokke is the use of high-quality potatoes as the main ingredient, so there’s not really a twist or something unique, it’s just the use of high-quality ingredients from Japan.

Mishima croquette

Was it well received by locals overseas? Did they understand and appreciate the quality?

We certainly hope so, we don’t have specific evidence that our Mishima croquette is preferred over others. However, considering that it has been well received in markets like Dubai, Singapore, and China, we believe we are doing well in bringing our unique take on the croquette to international audiences.

Japan is facing a serious population crisis, with the current population of 125 million expected to drop to 100 million by 2050—and potentially half that by the end of the century. One of the most pressing concerns is the aging agricultural workforce, with the average age of farmers now over 65. For companies like yours, this presents two major challenges: a shrinking domestic market and an increasing labor shortage. How is your company navigating these challenges, and do you see any opportunities arising from these demographic shifts?

Japan’s population decline is a critical issue for all companies, and there is no single solution to address it. We are already experiencing fierce competition for labor, making it increasingly difficult to hire employees, regardless of their age or level of experience.

To attract talented individuals, we rely on hiring agencies, and while we are managing well for now, we recognize that competition will only intensify in the future. That is why we are focusing on strengthening our brand power and contributing positively to society. Our goal is to become a company that people actively want to work for and whose products they choose with confidence.

In 2022, you formed a capital and business alliance with Fuji Bussan, expanding your capabilities into food manufacturing. How does this partnership align with your overall strategy, and what role does Fuji Bussan play in your business growth?

Originally, Tohei Trading operated solely as a wholesale company, focused on buying and selling products. However, we have been working on developing our own original products, such as the Mishima croquette and carrot juice. Since we do not have in-house processing or manufacturing capabilities, we saw the need to strengthen that aspect of our business.

This is why we formed an alliance with Fuji Bussan—to enhance our food processing capabilities and bring more of our product development in-house. This partnership allows us to expand beyond wholesaling and create higher-value offerings under our own brand.

Another key reason for acquiring Fuji Bussan was that the prior president fell ill and had no successor. Since we were located in the same town, We already had a track record of successful business dealings and felt it was easy to facilitate personal interactions as well.

Fuji Bussan specialized in using yam potatoes to produce tororo and other processed yam-based foods. Yam potatoes are known for their health benefits, particularly for stamina and digestion. In addition to yam products, the company was also developing food products for the elderly, a segment with significant growth potential. Given these factors, acquiring Fuji Bussan was a strategic move that aligned with our long-term vision and business expansion goals.

Two years ago, a report indicated that food sales accounted for 70% of your revenue. Do you see food as a sector you want to continue expanding? If so, will M&A remain a key strategy for that growth? Additionally, could you share your outlook on the future of your overseas business? How much of your total revenue do you expect to come from international markets in the coming years?

Regarding our overseas business, while it is growing, it still represents a small portion of our overall revenue. Because of this, it is difficult to predict what percentage it will account for in the near future.

As for M&A, our experience with Fuji Bussan has shown us that it can be a valuable tool for expansion. However, it requires significant resources and dedicated leadership to oversee the acquired business. We cannot pursue M&A too aggressively without ensuring a proper fit. Each potential acquisition must be carefully examined to determine whether it aligns with our long-term strategy. Expanding imports or exports through acquisitions is not a simple formula—it requires thoughtful evaluation to ensure sustainable growth.

Founded in 1957, Initially, we specialized as a subcontractor for Toray, focusing exclusively on textile manufacturing. Today, you have built a strong regional food presence in Shizuoka. How are you promoting Shizuoka washoku to the world, and what are the key benefits for people looking to experience authentic Japanese cuisine through your products?

In Japan, there is a strong local gourmet culture, where specific cities are closely associated with their signature dishes. A great example is Fujinomiya yakisoba, a noodle dish unique to Fujinomiya City. Shizuoka Prefecture is also home to other famous local dishes, such as Mishima Korokke and Hamamatsu Gyoza. By promoting these foods, we are not only showcasing the cuisine but also bringing attention to the cities themselves.

However, promoting an individual prefecture internationally can be challenging. If we were to introduce Shizuoka washoku in a market like Singapore, many people might not be familiar with Shizuoka as a region. Instead of focusing solely on regional branding, we take a broader approach by promoting Japanese food as a whole, using our local specialties as examples of authentic washoku.

When considering local gourmet culture, the primary focus is domestic promotion—encouraging Japanese travelers to visit specific cities for their specialty dishes. As certain local foods gain popularity, they often attract larger events, leading to involvement from convenience stores, local governments, and eventually, national government initiatives to promote them overseas. In this way, local food promotion typically starts within Japan and gradually expands to international markets.

Prime Minister Ishiba has expressed a strong commitment to revitalizing regional cities in Japan, not just major hubs like Tokyo and Osaka. We are actively promoting regional revitalization efforts ourselves, aiming to boost cities like Mishima through food-related initiatives. We plan to raise their profile both within and beyond the prefecture, expand nationwide, and ultimately extend our reach globally.

Following the success of the Mishima croquette, are you using your expanded development capabilities to create other products in collaboration with local farmers and producers? Do you see any particular regional specialties with strong potential for overseas markets?

That is exactly what we are working on at our company. One example is our collaboration with the fishery in Ito City to develop fish nuggets. Another is Ashitakatsu, a juicy minced beef cutlet made with Ashitaka beef from Nagaizumi Town.

Since Shizuoka Prefecture is well known for its green tea leaves, we are also developing a green tea croquette. Additionally, Hamanako is a famous lake in Shizuoka renowned for its seaweed production, so we are using that to create seaweed croquettes.

Beyond Shizuoka, we also have an office in Kanagawa Prefecture. In Odawara City, which is famous for plums, we are developing beverages using Odawara plums. Through these initiatives, we are continuously working with local farmers and producers to develop new regional specialty products with the potential for both domestic and international markets.

All these new products you’re developing—whether fish nuggets, Ashitakatsu, green tea croquettes, or seaweed croquettes—are deeply connected to collaborations with farmers, fisheries, and tea growers. Could you walk us through how this process unfolds? How do these partnerships take shape, and what steps do you take to bring a new product from concept to market?

Our approach to developing new products starts with identifying local specialties and finding ways to incorporate them into our lineup. For example, since Shizuoka is renowned for green tea, we wanted to explore how we could integrate tea leaves into our croquettes. While promoting our products in Singapore, we met a company that was familiar with high-quality tea leaves from Shizuoka. After reaching out to them, we began our collaboration on green tea croquettes.

For Hamanako’s famous seaweed, we knew we wanted to use it in our products, but finding the right manufacturer wasn’t easy. Since it can be difficult to connect with suppliers directly, we sought referrals from trusted contacts, which eventually led us to a reputable company specializing in Hamanako seaweed.

A similar process unfolded with Odawara plums. Knowing that Odawara is well known for its plums, we first reached out to the agricultural association. They then introduced us to well-regarded plum farms, enabling us to establish partnerships and develop plum-based beverages.

Each of these collaborations follows a common pattern: we identify a regional specialty, seek introductions through industry networks or associations, and build partnerships with trusted local producers to develop unique, high-quality products.

Your financial results have been very strong in recent years. In fiscal year 2021 (ending March 2022), we recorded consolidated sales of 4.3 billion yen and expect to reach 6.4 billion yen in fiscal year 2024 (ending March 2025). What key factors have driven this rapid growth, and what strategies have contributed to your success?

There are two key reasons behind our rapid growth. The first is our recovery after the COVID-19 period. In 2020 and 2021, business declined significantly, but we have since regained our pre-pandemic levels. The second major factor is the Fuji Bussan merger, which contributed approximately JPY 1 billion in revenue, along with another business unit acquisition that added around JPY 500 million.

One of our biggest focuses has been developing local gourmet initiatives, which played a crucial role in our post-COVID recovery and in attracting new customers. When we compare ourselves to other wholesalers of a similar size, most are solely focused on wholesale operations. Very few are actively developing and producing their own products. This ability to create and market our own unique food products has become a key differentiator for us, setting us apart in the industry.

Your company has established strong partnerships with organizations such as Izuhakone Railway, which operates routes from Mishima—the hometown of Mishima Korokke—to the Izu Peninsula, as well as Mishima City, which supports the development of the croquettes. Are you looking to expand your partnership network further? If so, what qualities do you seek in an ideal partnership for your company?

For us, the most important aspect of a partnership is the relationship between the people involved. For example, we were able to develop our fish nuggets because one of our staff members built a strong relationship with the fishery in Ito City. Similarly, we have a solid partnership with Mishima Kannami JA, the local agricultural association, as well as with local potato producers. Thanks to these relationships, we are continuously improving how we use potatoes to refine and enhance our Mishima croquette.

As for international partnerships, we are still in the early stages. Currently, our only international relationship is with a supplier in China for frozen vegetables, with whom we have worked for over 15 years. We trust them because they maintain a consistent quality standard, which is crucial for us.

Looking ahead, if we want to expand our exports, finding a reliable distributor will be key. The same applies to imports—while we currently source from China, we recognize the risks and would like to diversify our import partners. However, before expanding these partnerships, we must first establish strong relationships built on trust, just as we have done with our domestic partners.

You currently export to China, Singapore, and Dubai, and you also import frozen vegetables from China. Additionally, your Mishima croquette is being exported overseas. I’m curious—what led you to target Dubai as a market? And looking ahead, which other countries or regions are you considering for further expansion?

Our entry into Dubai wasn’t a strategic decision from the start—it happened by chance. One of our staff members, who graduated from a high school in Numazu City, was attending an exhibit in Japan when he met another graduate from the same school. They connected over their shared background, and it turned out that this person was running a business selling Japanese food in Dubai. Wanting to offer products from his hometown rather than sourcing from elsewhere, he initiated a business relationship with us.

In Dubai, we found it relatively easy to establish a business because there is clear data on the number of Japanese people living in each area, making it easier to gauge demand. This initial connection also led to further referrals, including lunchbox stores and e-commerce websites, which helped us expand our business there. While the scale of our Dubai operations isn’t very large, we receive regular orders, making it a stable market for us.

As for future expansion, many people have suggested Indonesia, but the requirement for halal certification makes it a challenging market. The certification process is expensive, and at this point, the ROI wouldn’t justify the investment.

We have also been exploring opportunities in countries around Singapore, but pricing remains a challenge. Since Singapore has relatively high price points, our products remain competitive there. However, in neighboring countries where costs are generally lower, our pricing makes it more difficult to compete. So while we are interested in expanding further, we are carefully assessing market conditions before making any major moves.

Tohei Trading is a family business, and you are its third-generation president. If we were to return on your last day as president for another interview, what personal ambitions or goals would you like to have accomplished? What legacy would you want to leave for the company’s future?

Under my father and grandfather, Tohei Trading Our core business was contract manufacturing for Toray's Mishima plant. At that time, manufacturing at the Mishima factory accounted for a significant portion of our sales and profits. However, as Toray expanded its production bases globally, the scale of our contract manufacturing at the Mishima plant gradually decreased.

As the third-generation president, my goal has been to establish a new core business for the company—the food business. This has now become our main area of growth. After acquiring Fuji Bussan, we also established a new sales office in Tokyo, aiming to build a robust and stable food business.

However, with Japan’s domestic market shrinking, our long-term vision must include expansion beyond our borders. The China and Southeast Asia markets present significant growth opportunities, and we see exporting as a key step in scaling our business. Currently, food accounts for 75% of our total revenues, but our ambition is to grow this segment even further and establish Tohei Trading as a leading name in the food industry, both in Japan and internationally.

For more information, please visit their website at: https://tohey.co.jp/company.html