Tsuji Oil Mills: Sustainable Innovation with a Japanese Soul Subtitle:

Food-related exports have seen record-breaking growth for eleven consecutive years, reaching JPY 1.45 trillion in 2023. This trend is also reflected in the sharp rise in Japanese restaurants overseas, increasing from 55,000 in 2013 to nearly 200,000 last year. What do you think accounts for the continued rise in Japanese food exports and the growing global popularity of Japanese cuisine, or washoku, in recent years?

As you mentioned, there are many Japanese restaurants abroad, and I’ve seen this myself while traveling, particularly in Southeast Asia and Europe. From my experience, the quality varies—some were very good, while others were not—which makes me question how many of these establishments are truly offering authentic Japanese cuisine.

Take sushi, for example. Becoming an authentic sushi chef takes about ten years of experience and training to truly master the craft. There are many elements involved, such as learning how to properly shape the sushi rice, developing the ability to assess the freshness of ingredients, and selecting high-quality components like vinegar. These skills are rooted in a long-standing culinary tradition.

However, in many cases abroad, people become sushi chefs after only one or two years of training. While the customers may be satisfied, I still wonder how many of these restaurants can genuinely be considered authentic representations of Japanese food culture.

If we look at the growth of washoku's popularity overseas—sushi being a prime example—we saw many non-Japanese individuals from places like Hong Kong and Taiwan opening Japanese restaurants in the U.S. during the 1980s and 1990s. That wave of expansion led to new interpretations and menu creations, such as the California roll. Today, social media allows people around the world to see and learn about authentic washoku more easily. This increased visibility is also reflected in the rising number of foreign visitors coming to Japan. Do you think international consumers are becoming more aware of what washoku truly is, compared to the less authentic versions served in some of the restaurants you mentioned earlier?

Japanese food is a part of Japanese culture, and for that reason, I don’t believe in forcing it onto foreigners. When I travel abroad, I see many places that combine Japanese cuisine with local food cultures. What I hope for is that people overseas place value on Japanese culture. If they choose to create fusion-style Japanese dishes, I would like them to preserve the original taste or essence of Japanese cuisine. To achieve that, ingredients play a crucial role—just as they do in Japan.

Japan is currently facing a population crisis, illustrated by two key statistics: a projected 12% decrease in the workforce by 2040 and the average age of farmers now reaching 65. These trends point to a shrinking domestic market and greater competition for labor. What strategies are your company implementing to address these challenges and ensure sustainable growth moving forward?

To address these challenges, we’ll need to take several internal steps. One approach is to raise the mandatory retirement age so we can retain employees for longer. Like many other companies, we also need to actively hire foreign workers, which means the number of immigrants in the workforce will likely continue to grow.

Additionally, we’ll need to outsource some operations, as it’s no longer realistic to handle everything in-house. Digital transformation (DX) is another potential strategy, though we haven’t yet taken any major steps in that direction.

Regarding the foreign workers you’re aiming to hire, are there specific countries or regions you’re targeting for recruitment?

In the past, we have hired engineers from Nepal, and at present we are hiring from China. In the future, we plan to hire operators from Vietnam, Cambodia and possibly Thailand. However, it may be difficult to hire from Thailand because of the rapid development of its economy and technology sector.

To follow up on that, the Japanese government has introduced a special skills visa system to make it easier for foreign workers to come to Japan. However, as you noted, Thailand’s economy is strengthening, and the current weakness of the Japanese yen may make it less appealing for workers from countries like Thailand to relocate to Japan. Could you share your thoughts on the special skills visa system and whether you see Japan as an economically attractive destination for foreign workers in the current environment?

When it comes to the working environment for foreign nationals, I would like to see the Japanese government take a more open stance toward welcoming foreign workers.

At my company, for example, we have a Chinese engineer working in R&D. She joined us after graduating from a Japanese university, and five years after starting with the company, she obtained permanent residency in Japan so that she could continue working.

What I hope to see is a lowering of the barriers that currently make it difficult for foreigners to come and work in Japan. Initiatives like the special skills visa are a good start, but more needs to be done to allow foreign workers to stay and contribute over the long term.

Your company was founded in 1947 and has since become a specialist in the manufacturing, sales, and R&D of vegetable oil and food-related products, serving both B2B and B2C markets. On the B2B side, you supply edible oils and functional ingredients to food manufacturers and restaurants. On the B2C side, you offer seasonal oils and dressings, including your Flavor Oil and Black Garlic series, which appeal to both gourmet and health-conscious consumers. Which of these business segments do you believe holds the strongest potential for growth moving forward?

First and foremost, our company is primarily focused on the B2B segment, so that remains our main area of business. However, we also operate a B2C business, which serves more as a form of advertisement or promotion. Through our consumer-facing products, I want people to become familiar with the ingredients and raw materials we use.

That’s why we sell items like our dressings and Flavor Oil directly to consumers. These B2C products are made with the same ingredients as our B2B offerings, helping to showcase the quality and integrity of our raw materials.

Hinoki Oil

Your main business divisions currently include edible oils, functional materials, and agriculture. Are there any new segments or areas you’re considering expanding into in the future?

One new initiative we’re working on involves the aloe plant—specifically, a domestic species known as kidachi aloe, which grows only in Japan. This plant has long been used in traditional Japanese medicine for a variety of purposes, including treating burns, stomachaches, and skin conditions, making it a truly multipurpose ingredient.

We process kidachi aloe to produce juice and also use it as a base material for cosmetics, opening up new possibilities in both the health and beauty sectors.

Could you share your overall R&D strategy and the current strategic goals you're working toward?

Our R&D department is divided into two main areas: product development and basic research. In product development, we are exploring how our core ingredients, such as vegetable oils, hinoki cypress, yuzu, ginger and lecithin, can be applied in various industries. For example, lecithin is generally used for emulsification, but it also has functions that are beneficial to liver and brain health, and it may also contribute to the prevention of depression. Currently, we use yuzu in beverages and confectionery, but we are also working on extracting yuzu oil and applying it to cosmetics. Interestingly, the aroma of the oil differs depending on the extraction method.

In the basic research department, we are researching the basic functions of these basic ingredients. At the Tsuji H&B Science Laboratory, which is located within Mie University, we are collecting data using cell experiments and simulated skin. For example, it has been demonstrated that cypress oil increases the body's production of hyaluronic acid, and that ginger oil is effective in promoting bone metabolism.

In the future, we hope to begin collecting data on humans in collaboration with Mie University Hospital. Mie University also has a variety of facilities, so we can study the behavior of genes and gain a deeper understanding of how these ingredients function in the human body.

Lecithin presents several challenges, including securing consistent, high-quality raw material sources, and purifying it in a way that removes impurities while preserving its functional properties. How does your company address and overcome these challenges in your lecithin development and production processes?

In order to overcome these challenges, we are constantly experimenting and making improvements. Lecithin is completely different from conventional oils, so we have to be extremely careful when controlling bacteria. To deal with this challenge, we work closely with our raw material suppliers, holding detailed discussions and sharing the knowledge and information we have accumulated to improve our handling techniques.

In particular, hydrogenation is used to increase the stability of lecithin in cosmetic applications. This process is essential to ensure both the quality and functionality of the final product.

Various Lecithin

Because we also use solvents with low flash points in the production of this cosmetic-grade lecithin, ensuring safety was our top priority. To this end, we repeated trial and error. In fact, we experienced a number of failures before we perfected our current production method. Each time, we thoroughly reviewed and improved our safety protocols. It was through this careful process that we were finally able to establish a safe and reliable production method.

Your company has built a strong business network with major firms such as Mitsui, Itochu Food Sales, and Cargill Japan, supporting your efforts in direct exports, distribution, expansion, and third-party processing. What qualities or capabilities do you look for in potential international partners as you continue to grow globally?

In terms of our partnership in the crushing business, we place great importance on our relationship with Mitsui & Co. Mitsui & Co. has a strong advantage in terms of raw material procurement, and we are able to use cargo ships with high cost competitiveness. The relationship between our two companies has a long history, and we intend to maintain this partnership based on trust in the future.

We have also built up a valuable relationship with a person who used to work for a major foreign-affiliated company and dealt with lecithin for many years. This connection goes back to my father's time. The person in question is now active as an independent distributor, and we value this relationship and plan to continue to cooperate with them on a priority basis.

When considering new overseas partners, our company places importance on history and mutual trust. These are essential foundations for building long-term business relationships.

In terms of internationalization, which countries or regions are you currently considering for future expansion, and what makes those markets attractive to your business?

In the near future, we plan to focus on Southeast Asian countries neighbouring Japan that have growth potential. Although the population is declining in Thailand, the population is increasing in Vietnam and Cambodia, and we consider these to be promising markets. In these markets, we aim to expand our business with products such as flavor oils, vegetable oils and dressings.

On the other hand, in the cosmetics and fragrance businesses, we are focusing on European countries as our main target market, with a particular emphasis on hinoki oil and yuzu oil. We are currently exploring how to position these oils as unique Japanese products. We are also actively promoting them to cosmetics companies in Europe, and the response has been very positive.

For example, there is a possibility that our cosmetic ingredients will be used in the brands of global cosmetic manufacturers, or that our fragrances will be used in brand products. Such collaborations will dramatically increase our global recognition.

You also provide OEM and custom production services for international clients, tailoring products such as lecithin, functional oils, and other specialty ingredients. Could you share how you approach developing these customized products to meet the specific needs and requirements of your foreign clients?

For example, the lecithin used in overseas markets is mainly for cosmetics. In many cases, there is an intermediary company between the final buyer and us, so we don't always get direct feedback from the buyer. However, because the climate conditions and skin types of the countries where the products are consumed differ from country to country, we need to adjust the lecithin for cosmetics to meet the specific needs of each local market.

Therefore, we work closely with the intermediary company to make the necessary adjustments, and we have detailed adjustments and discussions to ensure that the products meet the expectations and requirements of the end users.

Let’s imagine we return for your company’s 100th anniversary in 2047. As president, what personal goal or ambition would you like to have accomplished by that milestone?

By the time we reach our 100th anniversary in 2047, I hope to have established production bases overseas, particularly in Southeast Asia. By establishing production bases in these areas, it will be easier to export products such as seasonings, flavor oils and fragrances to neighbouring countries. In addition, production bases will also act as hubs for collecting market information and gaining a deeper understanding of local culture. Furthermore, they will also lead to the development of new products that meet the needs and tastes unique to local markets.

One of our basic principles is to find new value in the effective use of unused resources. For example, we make use of the yuzu peel that is left over after the juice has been squeezed out, we produce lecithin from by-products that are generated during the oil refining process, and we produce cypress oil using cypress trees that have been thinned as part of our forest protection (FSC) efforts.

This approach is fundamental to our business. In the future, we hope to further develop our tradition of sustainability and creativity by discovering materials that are not being fully utilized in other countries and creating innovative products from them.

For more information, please visit their website at: https://ureshino-lab.com/en/our-company/