Koufuku Holdings Leads in Sustainable Innovation

By Daniel De Bomford, Bernard Thompson and Paul Mannion

Agriculture is considered the genesis of civilization. It allowed societies to put down roots and build over generations, culminating in the modern technological marvels that are taken for granted today. As technology has progressed, agriculture's labor has decreased dramatically. However, Japan’s acute labor shortage and climate change are beginning to disrupt supply, with the country suffering rice shortages in 2023.

For Koufuku Holdings, a company specializing in health, food and biotechnology, it represents a challenge it is determined to overcome. President Takeshi Kitamono says the company’s most significant opportunities lie in supporting farmers. “Initially, we only purchased rice from farmers, but we are now actively participating in farming ourselves,” he explains. Starting next year, the company will operate its own farm.

Supporting Farmers

Kitamono says that the company’s focus is on easing the burden on farmers, as their physical demands have become a significant challenge. Only 30% of Japan’s land is flat, meaning much of the farmland is situated on hills, increasing the strain of work, especially on hot summer days. “To combat this, we are working to provide solutions that reduce the workload, making farming more sustainable and appealing for both current and future generations,” he says. Kitamono explains that another challenge is pests, particularly rice stinkbugs, which are managed through labor-intensive grass clearing. Koufuku Holdings is deploying drones to disperse pesticides and fertilizers while also supporting grass removal by dispatching workers to assist farmers. Farmers entering the industry also face high upfront costs and ongoing maintenance for machinery. Koufuku Holdings addresses this by offering rental equipment, such as tractors, to ease the financial burden. “By leveraging technology, workforce support, and equipment rental solutions, we aim to reduce the workload on farmers, making rice cultivation more viable and sustainable in the long term,” Kitamono states.

Creating Sustainable Value With Waste

Koufuku Holdings is also working to solve sustainability challenges with both food and plastic waste. Kitamono explains that despite the shortages of rice, Japan faces significant food waste issues, including unused rice. “Instead of discarding surplus rice, we want to repurpose as much of it as possible for alternative applications, such as bioplastics, to contribute to sustainability and waste reduction,” he says. The company has the capacity to develop environmentally friendly plastic alternatives, such as those made from rice, but with current initiatives, they remain uncompetitive.

Other applications for rice include Koufuku Holdings patented b50 ingredient, derived from rice the company harvests. “Its key benefit is that it enhances the moisture retention effect by a factor of seven, acting as a growth inhibitor to prevent moisture loss,” he explains. The ingredient is included in skincare products exclusively sold at beauty salons as a premium item. The company has expanded its supply to China and India and Kitamono says the products have been particularly well received in China. “The industry is experiencing rapid growth, and our beauty segment has seen 170% annual growth,” he states.

Health Product Fit Life Coffee

Finding New Markets

For continued international expansion, Kitamono describes Malaysia as a market with significant potential for the company’s Fit Life Coffee. The product can help reduce glucose, which provides value for consumers with diabetes. Malaysia’s sizable Muslim population means that Koufuku Holdings is looking to expand its factories to Malaysia and obtain a Halal Certification. The company is pursuing an M&A strategy to establish a factory to ensure that it meets all halal requirements and can effectively enter the market. “If we obtain halal certification, we can tap into the broader Muslim market, which is estimated at 1.1 billion people,” the President says.

With evolving environmental, economic and geopolitical challenges, Koufuku Holdings is closely monitoring the costs of farming, particularly for coffee and cacao. Increasing demand is driving up costs and creating a supply-demand imbalance. Kitamono says that the company’s strategy not only focuses on sales, but also on procurement. “Without reliable access to raw materials, our operations cannot move forward. That’s why we are also exploring overseas production for imports to Japan, ensuring a sustainable and diversified supply chain,” he says.

Agriculture remains the backbone of civilization, and Kitamono says that excessive use of the planet's resources is dangerous. “That’s why we place great importance on environmental sustainability and health, ensuring that we respect and maximize the value of these materials to help build a more sustainable world.”