Through their product portfolio, Yukiguni Maitake is bringing delicious, safe, and healthy mushrooms to the world.
Japanese food exports have seen a huge increase and record numbers in the last ten years, reaching JPY 1.5 trillion last year. This is also reflected in the popularity of Japanese cuisine worldwide. We’ve seen the number of Japanese restaurants increase tenfold as well, to over 200,000 worldwide. How do you account for these record-breaking Japanese food exports and the popularity of Japanese cuisine worldwide?
The popularity of Japanese cuisine comes from its variety of dishes and the deep umami flavor that captures the palates of people around the globe. With an increasing number of inbound tourists, there has also been a cycle where people come to Japan, experience authentic Japanese food here, and then want to have the same experience back in their home country, which is leading to an increase in the number of Japanese restaurants. The depreciation of the yen has also led to big increases in exports. With these factors, the popularity has been increasing.
Talking about these numbers, the Japanese government is pushing even further by investing in overseas marketing, increasing infrastructure, and developing the human resources needed to push this export number to JPY 5 trillion by 2030. Do you think this number is achievable in this time frame, and if so, what sort of steps do you think Japanese food producers need to take to get there?
Achieving JPY 5 trillion in exports in the year 2030 is not impossible, but there are many hurdles to be overcome. If you look at the composition of the JPY 1.5 trillion in exports last year, it leans toward specific categories, notably seafood and processed food, which account for over 70% of the exports. The composition of the export countries is also very limited, so it’s important for Japan to diversify the product range and the destination countries.
Fruits and vegetables, which include our mushrooms, only represent about JPY 45 or 46 billion and 70% of that number are fruits, dominated by apples, and 80% are exported to Taiwan and Hong Kong. It’s very important to diversify the product portfolio of exports and better manage the expiration of fresh food exports since they can only be consumed in a short period.
What is Yukiguni Maitake doing to overcome these challenges and to address these opportunities for diversifying?
Currently, we have two pillars of strategy. One focuses on the domestic market, which we think still has new areas to tap, so we are trying to raise the baseline of consumption. As for overseas markets, we are actively seeking M&A and alliance options, and last year we acquired a Netherlands-based mushroom production company to start operations in Europe.
Our uniqueness is our ability to provide a stable supply of fresh food despite the impact of climate change. We can also contribute to mitigating the food shortage due to population increase, so it’s important that we strengthen ourselves and have bases across the globe so we can locally produce and stably supply fresh, organic, high-nutrient food.
You mentioned the growing global population. However, Japan’s population is going in the opposite direction, and this has been particularly hard felt for those in the agricultural sector. The average age of farmers is now over 65. This is leading to production bottlenecks and the need to rethink the strategy of how to actually grow food. You’ve been introducing AI and technology into the cultivation process. Is there anything else your company is doing to reverse the impact of population decline on your productivity, and what future do you see AI and digital technology having in your cultivation process?
Before discussing smart agricultural technology, let me touch on the reason I said that there are still domestic areas to explore. The population decline of Japan is quite acute, with 120 million people expected to reduce to 100 million, but if you look at the overall calorie base calculation, the self-sustenance rate of Japan is only 30% or below. From the perspective of food safety and assurance, it’s important to increase that self-sustenance rate. With the global political crisis and the depreciation of the yen, the number of overseas countries’ exports is now diminishing, so Japan having less than a 30% self-sustenance rate is risky.
If you look at vegetables and fresh fruits, the agricultural sustenance rate of production within Japan is quite high, but the number of workers in the sector has dropped dramatically. It was about 10 million 30 years ago, then it went down to 4 million, and now it’s about 1 million. The average age is 70 years old, so the number of workers will surely decrease over time.
How I analyze the current Japanese food situation is that with the declining and aging population, the number of workers in agricultural sectors has dropped to one-tenth of the past. With abnormal weather and climate change, agricultural products are even harder to harvest, so I feel that as a factory that produces a stable supply of mushrooms, our role is vital in society. From this perspective, we believe there’s a huge role that we need to play within the domestic market, and there are more possibilities for our growth domestically.
With the shortage of manpower, it’s not wise to rely on that for our production, so it’s important to automate our processes. We see there are areas where we can introduce factory automation within the production line, so we are actively trying to convert ourselves to a more technological base so we won’t need to rely as much on human resources.
You mentioned the importance of the supply chain and extending the shelf life of food. According to the Ministry of Environment, last year food waste in Japan was over 5 million tons. What sort of initiatives are you undertaking to extend shelf life and reduce food loss?
The percentage of vegetables and fruits that go through the market channel is about 70%, and this channel actually has a high risk of food waste. The downside of Japanese vegetable and fruit distribution is that there are so many parties involved, from when the vegetable is harvested to the consumer purchasing it. It’s first sold in the market, then there’s a middleman, maybe several middlemen, and then it’s taken to the retail store. The downside is it’s not able to maintain a cold chain. In this distribution channel, there are so many temperature differences, which leads to discarding food.
Another issue that is inherent to this distribution is that Japanese vegetables and fruits are susceptible to climate, so sometimes the harvest amount is more than usual or less than usual. In the market, the price is adjusted so that although, for example, there’s an oversupply of a certain vegetable and the market price for the farmers may be reduced, the retail price does not change much, which means consumption is not promoted. This leads to more discarding of food at the production site since they cannot sell all the vegetables.
What Yukiguni Maitake is doing is reducing the percentage reliant on the market transaction. In fact, we have reduced it to 20%. For the remaining 80%, we have direct accounts with the retail stores, so in the distribution, we have no food discarding occurring. I have been in this vegetable industry for over 30 years, but I’ve never heard of a company that has a high percentage of sales that is not reliant on the market like ours. We have a vertically integrated supply chain, which is why we can achieve such a high level of independence, and by understanding how much production we can do, we can reduce the amount of discarded food. Although the food may not last long, we can plan in advance.
Often, overseas companies have separate companies for fungus production, cultivation, and sales. That’s true in Japan as well. Our uniqueness is that we have an integrated production scheme from the upstream to the downstream in the sales. We have a development capability of high-performing funguses and a cultivation environment that optimizes the production of these mushrooms from our homemade funguses.
Kiwami Maitake series
With our Kiwami Maitake series, we have brown and white maitake, but the uniqueness is that we use a high-performance fungus that has been developed in-house and can grow up to one kilogram in size. It also has a favorable texture and a good aroma. We have tried using other companies’ fungus to grow maitake, but no fungus grows as well and is as delicious as our own.
Where most companies can only make 500 grams of maitake, we can make twice that with our high-performance fungus and cultivation environment. This means we can achieve high productivity within the same amount of space.
Another one of your products is a plant-based alternative to meat. You partnered recently with Dom Dom Hamburger to make a maitake burger. These sorts of alternatives, like tofu and soy, have long been associated with Japanese cuisine. However, Japanese consumers have shown a reluctance to turn to meat-based alternatives. A recent study showed that 80% of Japanese consumers said they would choose domestic meat over a plant-based alternative. Given that this is a product line that you’re moving into, what sort of steps are you taking to overcome this Japanese consumer reluctance to switch to plant-based meat alternatives?
The reason we began the development of alternative meat is the global need for alternatives is rising, especially as the population is increasing, and from an environmental burden perspective, raising cattle consumes a lot of water and crops and has huge global warming gas emissions. It’s important that we find a more environmentally sustainable way of eating and plant-based meat can be an answer.
Soybeans have been the major alternative meat, but soybean production is susceptible to abnormal weather. With wars happening, distribution has been reduced, so the crop price has fluctuated. Soybeans, therefore, have the issues of stable supply and maintenance costs.
To be recognized as an alternative, plant-based meat has to taste good and be healthy and environmentally sustainable. Soybeans have less environmental burden, but if you consider the dietary composition, fat is low but glucose levels are high. Also, with soybean meat alternatives, the texture is quite rough, and it doesn’t have enough umami, so I feel that there’s a standstill in soybean-based alternative meat in its growth with concerns about taste, texture, and health. If we can produce alternative meat from mushrooms, then as the mushroom manufacturer, we can provide a high quality, stable supply with stable pricing.
The advantage of a mushroom alternative is that, besides having less environmental impact, there is a stable supply, and both the fat and sugar levels are low. It also has a lot of fiber, which can add to the texture. It’s very healthy but also delicious and full of umami.
There’s a growing demand across the globe for alternative meat, but soybean supply is limited, and Japan has a quite low crop self-sustenance rate, so we must rely on imports. With the yen depreciation and unstable supply of overseas producers, the country is now struggling with the cost of ingredients, so we want to take mushroom alternative meat to a level where it can complement or compete with soybean or other alternative meats.
Speaking of the domestic market, it’s true that Japanese people are less interested in and concerned about the environmental impact compared to Europeans. However, healthy food is important to the Japanese consumer. With the increasing retail price of soybean-based alternative meat, Japanese people will only choose it if it’s delicious and healthy. However, the current taste is still lacking, so that is why it hasn’t yet become popular in Japan.
Our mushroom-based alternative meat is produced in the factory with a stable supply that limits the fluctuation of the price. It also has a good taste full of umami while being healthy. For these reasons, we believe it is an attractive product for the Japanese market. We haven’t launched it yet, but we will launch it this season.
Mushroom-based alternative meat products
We talked about the international market, and we know that you recently acquired a presence in the Netherlands. Are you looking to continue this international expansion, and if so, what countries or markets have you identified as being potential targets?
The global market is witnessing a 4% annual increase in mushroom consumption, so we believe there’s a huge potential for our market to expand globally. The Netherlands has a long history in mushroom cultivation and is actually exporting its mushrooms to other countries, so we’ve been focusing on their activities for quite some time. Having a partner and a base in the Netherlands will provide a good entry into business in Europe.
In Europe and the US, when you see mushrooms, they are usually button mushrooms, but recently, premium mushrooms like bunashimeji, maitake, and shiitake have been growing in popularity. The company that we acquired in the Netherlands is a company that works with oriental mushrooms. Currently, 50% of their mushrooms are button, and 50% are exotic or oriental, so elevating the percentage of exotic mushrooms can act as a market driving force.
As for button mushrooms, they have a long history, so technology and production lines are much more advanced than in Japan. However, for exotic mushrooms, in Japan, we are pioneering the way of production. We feel that by acquiring this company we can have a good relationship and enhance the exotic mushroom productivity, in fact, it has a direct sales channel, so we have a very similar business model.
Let me touch upon our growth strategy domestically. Together with maitake, we envision button mushrooms as the second main growth driver. In the domestic market, shimeji mushrooms are the dominant type, and 120,000 tons are sold annually, whereas for maitake, since it is hard to grow, the amount sold is lower at 57,000 tons and we have 50% of that market so we are the maitake market leader, but compared to shimeji mushrooms we still have room for growth and production. Also, button mushroom production in Japan is only 7,000 tons and we currently produce one-third of that.
Exotic mushrooms are often used for washoku, or Japanese cuisine, while button mushrooms are used mostly in Western cuisine. For that reason, perhaps, many Japanese are not aware of the goodness of button mushrooms and some people eat them from cans, but they are most delicious when eaten fresh. And because of those different uses, there’s no cannibalism between the two, so we can grow both types, focusing on Western and Japanese cuisines.
As I mentioned, compared to Europe, specifically the Netherlands, the Japanese standard of button mushroom production and productivity has not reached the same level, but the company we acquired in the Netherlands has a high standard of technology for the production of button mushrooms. It’s a good match because our strengths are their challenge and their strengths are our challenge.
Which type of mushroom is your favorite?
My favorite is maitake mushrooms because of their flavor, aroma, and texture. And the more you investigate them, the more you realize how beneficial they are for your health. There are endless benefits to consuming maitake.
Your company is celebrating its 41st anniversary this year. Let’s imagine that we will come back in four years for your 45th anniversary and have this interview again. What goals would you like to accomplish by then, and what message would you like to send readers and consumers?
We can grow based on mushrooms' innate power by utilizing manpower and knowledge to extract the best from them. By optimizing the benefits of eating mushrooms, we want to contribute to the well-being of people across the globe.
We strongly believe that there’s an immense possibility for our mushrooms to mitigate the vulnerability of food production. When you come back for our 45th anniversary, I want to disclose how much we were able to contribute globally with our mushrooms.
We will continue expanding overseas and diversifying our product lineup from mushrooms to alternative meat. We can also make a leather alternative to use for bags and packaging, so we are expanding our product lineup and diversifying the areas of expansion to achieve integrated comprehensive growth, and we have defined our corporate identity to optimize the benefits of mushrooms to contribute to the well-being and the healthy lifestyles of people across the globe. In that regard, we have defined our purpose as “the world of the future is the power of mushrooms.”
When we reviewed our product and geographic expansion plans, we realized that our name, Yukiguni Maitake, was no longer appropriate. So, on April 1st, the beginning of our new fiscal year, we’ll be renaming ourselves Yukiguni Factory Co., Ltd.
Yukiguni means “snow country,” which is where we originated, so we have decided to maintain this identity. However, this does not mean that we are limiting ourselves to snow country. Rather, we are expanding into the global arena. Including “factory” in the new name is intended to incorporate the essence of technology and the mechanical aspect of our operations to show our determination to provide health benefits to people around the globe with the power of mushrooms.
We want to evolve our company into one that surprises people with new innovations as a monozukuri company, starting with our mushrooms, then entering into alternative meat, and then whatever may come next.
For more information, visit their website at: https://www.maitake.co.jp/en
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