Japan’s food-related exports have surged in recent years, surpassing 15 trillion JPY for the first time last year. At the same time, global popularity of Japanese cuisine has grown, with the number of Japanese restaurants tripling over the past decade. What do you believe has driven this sharp rise in popularity in just the last three years?
That is a big question. First of all, I think the increase in the number of travelers visiting Japan has had a significant impact. Many people experience authentic Japanese cuisine in Japan and then take that experience back to their home countries. As a result, understanding of “authentic Japanese food” has advanced considerably overseas. It is no longer just a passing boom but something that has firmly taken root in many countries. Japan is a unique country with a rich culture, and I believe that cultural appeal has also contributed to the growing popularity of Japanese cuisine. I am very excited to see how far this trend will spread in the future.
You mentioned tourism. Last year, 37 million foreign visitors came to Japan, and this year the figure is expected to surpass 40 million. Many travelers visit specifically to experience Japanese food culture, especially sushi. How has this tourism boom affected your company, and what strategies are you using to meet growing demand?
As a chain, we aim to provide services to a broad range of customers, not designed solely for inbound visitors or specific groups. That said, we have recently started seeing tourists even in our neighborhood locations. For example, some stay at nearby Airbnbs or hotels and order takeout from us every day for a week. While our business is not designed around tourism, we don’t want to miss out on customers who discover us. Our core model is takeout, but we are planning to expand our eat-in locations. This way, we can provide a more enjoyable experience and create appealing stores for international visitors as well.
Let’s discuss challenges facing the market. Japan is the most rapidly aging society in the world, with a declining population. In labor-intensive industries like hospitality, labor shortages are serious, and the consumer base is shrinking. At the same time, Japanese eating habits have changed over the past decade, with rice and fish consumption falling as westernization has increased. How is your company addressing these societal challenges?
Labor shortages are indeed a long-standing challenge we strongly feel. The food service industry has never been especially popular among students as part-time work, so hiring has always been difficult. As a result, many of our hires are mid-career from other industries. About 90% of our employees are part-time, so securing a stable workforce is crucial. There is no magic solution. We are steadily working on raising hourly wages, improving the work environment, and expanding benefits that the company can provide. While there is no silver bullet, our stance is to do everything possible to attract and retain the necessary workforce. Building a sense of unity and belonging within the organization is also essential.
Chiyoda Sushi Platter
The impact of a shrinking market became especially clear after COVID-19. Raw material prices have also risen. At the same time, large corporations have increased their presence, making the gap between winners and losers more pronounced. Under these conditions, our top priority is survival and maintaining competitiveness. For a takeout-focused company like ours, our biggest competitors are supermarkets that sell sushi. That is why we focus on differentiation, emphasizing expertise and products unique to Chiyoda Sushi that supermarkets cannot provide. We devote significant effort here.
Chiyoda Sushi was founded in 1959 as a food-related business and has since developed into a mid-sized player with a strong presence in the takeout market, currently operating about 180 outlets nationwide. Could you share the company’s history and the turning points in its development?
Our company was originally founded by my grandfather as Nakajima Fisheries, engaged in wholesale and retail of seafood. The business grew significantly, and in thinking about how to sell more fish, we started operating a cafeteria in the Mainichi Newspaper building, later spinning it off as an independent company. That eventually led us into the sushi business. Later, we opened a standing “10-yen sushi” shop in Ikebukuro’s Tobu Department Store, which was also very successful. That was the turning point where we shifted from being a fish-selling company to one focused on sushi.
About 35 years ago, my father, now honorary chairman, became president. He was the one who shaped the business as it exists today, greatly expanding the store network.
I am always impressed by your ability to provide high quality at affordable prices. At the take-out restaurant, the set price starts at 499 yen and 116 yen per piece (both without tax), and at the stand-up sushi restaurant, the set price starts at 840 yen and 90 yen per piece (both without tax). Your mission is “to democratize sushi.” What initiatives are you taking to achieve this mission?
Our goal is to provide products of superior quality and freshness at accessible prices. This is our basic policy for democratizing sushi. To achieve this, we have mechanized certain processes. However, the key lies in standardizing operations. We train each part-time worker so they can perform all tasks in the store. Our aim is that whoever handles a task, whenever they do it, the result will be the same high quality. To achieve this, we have developed detailed procedures to improve efficiency and maintain standards.
Chiyoda Sushi @ St Luke’s Garden
When I joined the company 30 years ago, each store had a skilled sushi chef. Ideally, we would have kept that system, but with today’s labor shortages, it is simply not realistic. Given our chain-store strategy and expansion goals, we had to design operations that could run primarily with part-timers while keeping costs down. We tried various approaches. At one point, we set up a processing center where fish was prepped and then delivered to each store.
Of course, ideally, everything would be prepared in-store for maximum freshness. But for a company aiming for a network of 1,000 stores, that is not realistic. After much trial and error, we recently introduced specialized machines for cutting tuna sashimi. While in-store preparation is ideal, it is hard to balance that with rapid expansion and maintaining affordable prices. We are constantly searching for that balance.
From a technology standpoint, your company has been working with Daybreak on its “ARTLOCK Freezer” technology. Traditionally, sushi has been difficult to freeze and thaw without losing quality, particularly with the rice texture. Frozen sushi may sound counterintuitive. How have you overcome these challenges?
Frozen sushi has existed for about 10 years, but frankly, it has not tasted very good. There are even shops in Ginza selling very expensive frozen sushi, but when you eat it, it can be surprisingly disappointing. Because costs were high and quality low, the market did not develop.
However, with COVID-19 and shifts in global conditions, the market suddenly emerged. Combined with ongoing labor shortages, especially outside major cities, hotels sometimes stopped providing in-house meals and instead directed guests to restaurants. At the same time, travelers still wanted the option to dine in their rooms, fueling demand for frozen sushi.
Until recently, quality did not meet that demand. We had long been interested in the potential of frozen sushi, so we approached Daybreak and began product development. With the cooperation of many stakeholders, we were able to raise the product to its current level. As you pointed out, rice texture was the biggest hurdle. At first, this was very weak and difficult to replicate, but ultimately, we overcame it.
There are many freezing and thawing technologies, but usability is critical. Some companies provide complex defrosting systems, but we developed sushi that can be eaten with a simple method. Just take it from the freezer, place it in the refrigerator overnight, and it’s ready to eat the next day.
Do you plan to export this product to overseas markets?
In fact, we have already received inquiries from the United States to export sushi made with this technology. Since the U.S. takeout market tends to have higher prices but not necessarily high quality, we see this as a very promising opportunity.
Let’s discuss your overseas strategy in more detail. You have entered Vietnam and last year expanded into Singapore. Which regions will you prioritize for future expansion?
For the time being, we will focus on Southeast Asia. Maintaining freshness is the biggest challenge for sushi, which requires high-density management. Being geographically close to Japan is therefore a major advantage.
Additionally, in terms of food culture and work practices, there are many similarities between Japan and Southeast Asian countries. Since our operations are labor-intensive, expanding in regions with similar labor practices is important. Above all, Southeast Asia is a rapidly growing market.
That said, we are also interested in the U.S. and European markets. We have not visited since COVID, but this year I plan to visit both regions to see changes in the market firsthand.
Particularly in Vietnam, partnerships have been central to your overseas expansion. In Vietnam, you operate jointly with Lotus Group. How important are partners to your growth strategy, and what qualities do you seek in an ideal partner?
By way of background, we once formed a joint venture in Taiwan and opened eight stores. But over time, differences in opinion and perception regarding business direction emerged, and ultimately we decided to dissolve it. This experience reinforced for us how critical it is to choose the right partner. You could say that 80–90% of success depends on it.
We were fortunate to meet Lotus Group in Vietnam. Before entry, we analyzed both Oceania and Southeast Asia in depth. Vietnam was showing remarkable growth, with an average age in the 20s, offering tremendous opportunities for Japanese cuisine. The timing was right. Importantly, among Southeast Asian countries, Vietnam also stood out as one where locally sourced fish could be eaten raw, a major advantage for us.
Lotus Group was introduced to us by key Japanese stakeholders. They had extensive experience working with Japanese companies, a deep understanding of Japanese practices, and communication and collaboration were extremely smooth. That is how our partnership in Vietnam began.
In Singapore, we operate directly since we can fully comply with regulations. But in many countries, due to legal frameworks and logistical complexity, launching and operating alone is difficult. A partner who understands both our business and local circumstances, and can provide support, insights, and guidance, is essential. Even now, we face many challenges in Vietnam, but because we have a strong partner like Lotus, we can continue to grow the business.
A personal question: what is your favorite type of sushi?
Tekkamaki, which is what you would call a tuna roll
Uni has become very expensive lately, hasn’t it? However, I found astonishingly delicious uni in Vietnam. You might not expect much from uni in warm seas, but it was truly delicious. Vietnam has already started aquaculture, and local procurement is progressing. We are now working to build a supply chain for exporting it to Japan. These kinds of discoveries in overseas expansion are fascinating.
Finally, what do you hope your company will look like 10 years from now?
Our mission is to make our employees happy. This is a philosophy I firmly believe in. The company belongs to its employees. I want it to be a place where people truly feel they were right to join, and that they are glad they worked here. Of course, given today’s environment, this is not easy, but we aim to remain a company employees can be proud of.
As a concrete goal, what I most want to achieve over the next 10 years is to firmly establish and put our overseas business on track.
For more information, please visit their website: https://www.chiyoda-sushi.co.jp
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