Tradition and Transformation: How Kuze Is Evolving to Meet the Changing Demands of the Food Industry

Japanese food-related exports have increased for 11 consecutive years, reaching JPY 1.45 trillion by 2023. A major factor behind this growth has been the global rise in Japanese restaurants, which have tripled over the past decade. From your perspective, what do you believe accounts for this significant rise in Japanese food exports? And why do you think now is the right moment for washoku to shine on the international stage?

First of all, I think people overseas are becoming more aware of Japanese cuisine. There’s a growing recognition of its health benefits, as well as an increased appreciation for the variety of food Japan has to offer. Many people who experience Japanese food while visiting the country want to take that experience home with them.

In addition, Japanese content—such as anime and manga—has gained global popularity. These media often feature Japanese food, which further boosts international awareness and interest. On a broader scale, food prices are rising globally, and I believe Japanese cuisine is well-positioned to command premium pricing. In fact, Japanese food can now be more expensive in restaurants than even French cuisine—and people are willing to pay. This presents a strong opportunity from a restaurant management perspective. For example, in New York City, it might be difficult for a steakhouse to charge USD 1,000 for a meal, but a top-tier Japanese restaurant could realistically reach that price point.

You mentioned the growing awareness of Japanese cuisine, which the Japanese government is aiming to leverage by setting an ambitious target of increasing food exports to JPY 5 trillion by 2030. For your business, what are some of the key opportunities you see arising from this push for greater exports and international recognition of Japanese food?

There are growing opportunities to increase the value of exports, and our group is keen to take advantage of this trend. That said, we’re also aware of the challenges that come with it.

Let me briefly touch on some of those challenges. As Japanese food becomes more commonplace around the world, there's a risk that prices will fall and key Japanese ingredients may become commoditized. The strength of Japanese cuisine lies in its premium ingredients—like scallops and sea urchin—but supply is limited. That’s why we need to shift toward developing value-added products. This marks the next phase of growth, moving beyond simply increasing export volume. Differentiation will come from branding and technological innovation.

Take sea urchin, for example. Hokkaido’s sea urchin is highly prized, but if it becomes a commodity, countries like Chile could begin exporting their own varieties and competing on price. For Japanese cuisine to establish deeper roots globally, localization will be key—such as transferring fermentation technologies. At the same time, when exporting from Japan, strong branding is essential. Products like Kyoto’s green tea powder succeed not just because of their quality, but because of their strong brand identity.

One of the major challenges facing Japan’s food sector is the labor shortage. Japan has the oldest population in the world, and it’s now shrinking rapidly due to aging and low birth rates. This creates serious issues for a labor-intensive industry like food production. Compounding the problem is a shrinking domestic market, as the population decline also reduces the consumer base. How are you responding to these challenges? And how is Kuze leveraging its in-house logistics capabilities to help address them?

The diversity of cuisine presents unique logistical challenges, making warehouse automation and digital transformation (DX) increasingly important.These technologies have the potential to support that diversity, but at the same time, I believe some of it is being lost. While we can still maintain variety in major cities, it’s becoming increasingly difficult in rural regions. We need to carefully consider how much to invest and how much diversity we can realistically sustain.

In the past, we had a larger workforce, which allowed us to handle a wide range of inquiries and maintain a diverse array of business activities. But moving forward, we’ll need to strike a balance between accommodating varied demands and adapting to labor constraints.

If we take hamburgers as an example to think about diversity, a single restaurant may only offer a limited variety, but diversity emerges from the fact that each restaurant sells different kinds of hamburgers. As a wholesaler, we believe it is important to transform our operations while keeping a close eye on the direction in which the food service industry is diversifying.

In your response, you touched on AI, digital transformation (DX), and automation, along with the challenges of integrating these technologies. It’s clear that their adoption in the food industry is inevitable. Your company has developed its own platform Smart Connect, which has been in operation since April 2025 How are you approaching the integration of this platform in light of the challenges you mentioned? And what are some of the key operational efficiencies you hope to gain from it?

Understanding is critical in this context—especially when it comes to wholesaling in Japan, where there is still a heavy reliance on people. That’s where human experience and know-how become essential. With that in mind, we need to ensure a clear, streamlined process from the initial inquiry and first visit, to providing quotes and delivering the products. From there, it’s about identifying which tasks should remain human-driven and which can be handled by machines.

Traditionally, handling inquiries has been a significant burden. To address this, we introduced our KUZEX platform, which has significantly improved the efficiency of our inquiry response operations.

Your company was founded in 1934—nearly a century ago. Over that time, you’ve grown from a local food supplier into a nationwide distributor. Looking back on that journey, what would you say have been the most pivotal milestones in shaping the company’s evolution?

My father was the one who really grew the business. He built strong relationships and continuously thought about how to earn and maintain the trust of our customers. The company was originally founded by my grandfather, and 35 years ago, my father took over. At that time, it was still a small, family-run operation. It was my father who expanded the business and eventually listed the company. Today, however, we are in a different era—one that requires more logical and data-driven management. That’s why I introduced KUZEX and Smart Connect.

Japan’s food distribution market is highly competitive, ranging from major national brands to small local distributors. In such a complex landscape, what do you see as Kuze’s core competitive advantages? What differentiates your company from the competition?

For us, being deeply rooted in local communities is essential. In Japan, business relies heavily on trust, connections, and long-established relationships. By operating locally, we’re able to serve diverse and often niche markets more effectively. However, trying to address that same level of diversity on a nationwide scale would be extremely challenging and labor-intensive.

With current labor shortages and evolving relationships between companies and employees, it’s more important than ever to maintain close ties with our team and localize our operations. That’s why we place great value on ensuring that both the company and its employees share the same ambitions—we believe everyone should be aligned and working toward a common goal.

Localization is a key focus for us, but we also consider two other principles to be vital: passion and operations. As we look ahead, logistics systems and human resource strategies will become increasingly critical to our success.

In addition to distribution, your company is also engaged in proposing menu ideas to clients, developing original products, and organizing your own trade shows. Could you tell us more about these initiatives and how they enhance your overall value proposition from the perspective of potential clients?

Our primary goal is to have customers use our products and experience their convenience firsthand. From there, our second objective—building brand awareness—naturally follows. While productivity is certainly important, we believe that convenience will play a key role in delivering value to our clients.

In addition to your OEM business, your company also develops its own private brand products. How do you strike a balance between these two areas? And how do you see the ratio between these two core pillars evolving in the future?

We aim to explore areas that other companies tend to overlook. Before we launched Dolceze, there wasn’t really a market for premium, business-use sweets and confectionery. With Dolceze, we created that market ourselves. Identifying and filling market gaps is something we consider very important—and that’s exactly how Dolceze came to be.

Our research shows that your company made a strong recovery following the COVID-19 pandemic, with revenue rising from JPY 37 billion to nearly JPY 70 billion in the past year. At the same time, there has been significant movement in your stock price. Now in the third year of your current mid-term strategy, what do you believe has driven such a strong post-pandemic recovery? And could you share more about your long-term vision beyond this year?

During the pandemic, we downsized, which lowered our break-even point. As a result, when recovery began, we were able to rebound strongly. However, this also placed significant pressure on our frontline workers. We’re now in the process of returning to a more balanced, normalized structure. As for our long-term vision, it centers on building systems that enhance convenience—for both our customers and our operations.

What are your thoughts on the company’s current valuation? Do you believe the market fully understands your business model?

Our primary focus is on what we can do for our customers and how we can retain profitability. We don’t try to appeal to shareholders by exaggerating our actions just to boost the share price. Instead, we’ve focused on strengthening the core of our business and communicating that effectively. Our hope is that once the market recognizes those improvements, the share price will follow. Ultimately, our goal is to enhance the business in the best way possible and deliver real results—and we hope that those results will be recognized and valued by the market.

Your company has been expanding its international presence, with operations in Hong Kong, mainland China, and New Zealand. Could you tell us more about your international strategy?

As competition intensifies, I believe it’s essential to work with local partners. We need to identify partners who see value in collaborating with Japanese companies. At the moment, I see potential in India. However, this approach requires both us and our local partners to share a common vision and truly understand each other. Going forward, selecting the right partners will be critical. It’s important that our partners understand not only our business practices but also those of Japanese companies more broadly.

Another avenue we’re exploring is exporting Japanese food and ingredients to Western chefs. In that context, Singapore presents strong potential, as the number of restaurants there continues to grow.

On that note, are there any other markets you’re currently looking to expand into?

Within our group, we have a subsidiary called Kisco Foods, which specializes in Western broths and stocks. For example, Kisco produces French-style broth, which typically takes a long time to prepare—especially when compared to Japanese bonito broth, which can be made in just 10 minutes. Kisco Foods capitalized on this efficiency and experienced significant growth, particularly in Singapore. Kisco Foods’ products have helped solve labor shortages and reduce preparation time for Singaporean restaurants that traditionally made French-style broth by hand.

If we were to return nine years from now for a follow-up interview, what goals or dreams would you hope to have achieved by then?

I want all of my employees to feel genuinely cared for. If they aren’t happy and motivated, we won’t be able to achieve anything meaningful. My hope is that we all continue to share the passion and drive needed to protect and grow the company together.

For more information, please visit: https://www.kuze.co.jp/