Through decades of continuous innovation and the explosion in popularity of Japanese food, Sugiyo is finding global success with its unique, flavorful seafood.
By Daniel de Bomford and Bernard Thompson
Since Sugiyo began processing fish and producing fish products over 150 years ago, the company has seen remarkable ongoing success in both the domestic and international markets. President Tetsuya Sugino says Sugiyo's flagship product, Kanikama —an alternative to crab meat made from fish paste—has become a staple of Japanese cuisine and can be found in dishes all over the world. The story of Kanikama's development serves as a perfect example of "making lemonade out of lemons." Originally a failed attempt to create an alternative to jellyfish, it was Mr. Sugino's predecessor who recognized its uncanny resemblance to the physical appearance and texture of crab, transforming a setback into a groundbreaking success. As the price of crab was increasing dramatically, he saw an opportunity to fill a gap in the market. While the product initially struggled, over time it was embraced by Japan and later the world. “It became massively popular in Japan, especially among those who saw crab as too high-end,” Mr. Sugino says. “Thankfully, after 50 years, we are now accepted by society, and this alternative crab is recognized as an indispensable ingredient in Japanese cuisine.”
Despite the shrinking population of Japan, Mr. Sugino says that there are still plenty of domestic growth opportunities. “We do still see huge potential in the Japanese market, ideally by entering new areas and new ways of selling products,” he says. Mr. Sugino also sees opportunity in the international market, especially with the increased global popularity of Japanese food. “The biggest driver of Japanese cuisine growth across the globe has to be the UNESCO Intangible Cultural Heritage recognition that it received back in 2013,” he says. Combined with the depreciation of the yen empowering exports, Sugiyo is finding success internationally in the United States, East Asia and Southeast Asia.
Hunger and fascination for Japanese cuisine has driven over a decade of growth. Yet, this is nothing new for Sugiyo. A veteran of the international market, the company began exporting to the US nearly 50 years ago. Sugiyo started by partnering with United Airlines, an alliance that revealed demand for its alternative crab. Leveraging that demand, it pivoted to the US restaurant industry—specifically steakhouses, where crab is served on the same plate as steak.
Mr. Sugino explains Sugiyo's competitive advantage: “The price of snow crabs was increasing, and so many middle-class restaurants chose to use our alternative crab instead of actual crab.” A key part of this is the company's methodical approach to partnerships, domestic or abroad. Mr. Sugino describes Sugiyo's ideal partner of choice: “Finding the most appropriate overseas partner is very important in our international business expansion,” he says. “The whole point of alternative crab is to enjoy the product itself. Something we have learned is to share a mindset with a partner.”
Sugiyo continues to innovate and develop products to satisfy ever-evolving global tastes, adapting to changes in consumer habits and market trends. Key to this, for example, is innovating to meet the increasing emphasis on healthy living and sustainability—and Sugiyo's product portfolio caters to conscious consumers. “One focus we have,” Mr. Sugino notes, “is on strengthening the protein content of our products so that athletes and people who like to exercise or are looking to build muscle can intake these products.” Going hand-in-hand with health, sustainability is a major priority for Sugiyo, and Mr. Sugino says it is vital to adapt as global warming disrupts traditional supply chains.
For over a century, Sugiyo has continued to innovate and has proven that it can succeed no matter the market. With its forward-thinking approach and an eye trained on the market, Sugiyo is poised to remain a leader in Japanese seafood exports. “As a food company, it is important that we are constantly mindful of providing sustainable food to the people in the best way possible,” Mr. Sugino says.
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