Yoshihiro Hayashi: Commitment to "Organic Miso" and Delivering Japanese Flavors to the World

Originally, my great-grandfather was a roofer from what is now Joetsu City in Niigata Prefecture, and he had nothing to do with miso. It seems he came to Suwa to roof the Suwa Taisha Shrine.

However, roofers have no work in the winter when the weather is bad. So, looking for a business he could earn from year-round, he got some miso from a fellow trader in Suwa and walked around selling it in Tokyo, where it sold very well. At that time, the "Shinshu Miso" brand was already established. So, he decided to try making miso himself.

The brewing industry has a long history, and since miso is a preserved food and a source of protein, the Date Clan, for example, fostered miso production as a policy, and the distinctive Sendai Miso has existed since the beginning of the Edo period. Therefore, being founded 200 or 300 years ago is not unusual at all, and Hikari Miso is close to being the latest comer in the industry.

Well, that's true. However, miso is in a state of gradual decline domestically. The market size used to be around 500,000 tons for a long time, but now it has almost stopped falling at just under 400,000 tons. Some industry groups say that educational activities about miso being good for health are working, but that might be a bit of "temae-miso" (self-praise) (laughs).

There are also pessimistic opinions. The current domestic demand for miso is supported by the baby boomer generation, and there is a fear that once they are gone, it will drop sharply.

I think the domestic market will be tough. Demand will shrink further due to the declining birthrate, aging population, and the resulting changes in lifestyles.

On the other hand, to put it bluntly, I have a sense of confidence that overseas markets will surely see double-digit growth every year for the next 10 years or so.

The status of Japanese food is very high overseas now. In major cities like London and New York, the restaurant people want to take their girlfriends to is a high-end Japanese restaurant. It's far above French or Spanish.

Furthermore, there is another trend: so-called "B-grade gourmet." For example, in London, everyone knows "Katsu Curry," and they even sell "Katsu Curry Soup" in supermarkets. And right now, the most popular thing worldwide is ramen. There's a rush of shop openings everywhere. Retail ramen products not involving Japanese people have also appeared.

Because they have an image that "Japanese food is healthy," they use rice flour instead of wheat flour for ramen. When we eat it thinking it's ramen, the salt level is so incredibly low that it's inedible (laughs). Yet, it still sells.

Therefore, it's outdated for us to only chase the traditional set meal of rice and miso soup. We have to think about how to get people to use miso amidst these big changes.

Currently, in the United States, it is widely said that improving the intestinal environment is the basis of human health. Because of that, it has recently been said especially that "miso, a fermented food, is good." Another factor is its antioxidant effect, but overall, it's a fact that fermented foods and Japanese food are currently enjoying a very strong tailwind.

Regarding salt content, products for overseas are designed to be low-salt, at least 10% lighter compared to Japan. The standard daily intake is regulated by the FDA (U.S. Food and Drug Administration) in the U.S., and there are guidelines in each country, so we try to create recipes that fit within those.

However, it's not that we have to follow them all strictly. In the end, it comes down to who we are selling to and what the channel is. Supermarkets where health-conscious customers go are different from Asian supermarkets. The U.S. is a large market with various races and regional differences.

Yes. Almost 60% is for the U.S., and I emphasize the West, with the U.S. at the top.

One reason is the high price level. Local retail prices are established at 1.5 to almost 2 times the shelf price of Japanese supermarkets. Moreover, in the U.S. now, we use refrigerated containers for the entire volume, so unlike Japanese supermarkets where miso might be left at a wholesaler for a month at 30°C or 40°C in the summer and turn red by the time it hits the shelves, our miso is lined up in a shiny, excellent condition.

Also, in the U.S., the population is still growing, and the legal and tax systems are well-established. Furthermore, the large Asian population is also attractive to us.

When trying to sell in the U.S., Japanese food groceries adopt us immediately. And people who come to Chinese and Korean supermarkets buy miso without hesitation, so we build a foundation there first. Once we understand the situation, we can move to a two-stage expansion: selling in the mainstream markets and restaurants where locals go, regardless of whether they are Asian.

Europe doesn't have a large Asian population like the U.S., so there is no receptacle for that first step.

In terms of practical work, I am still 70% Epson-style. At Epson, I was blessed with good bosses from the time I joined, and they taught me very well.

I was told to distribute meeting minutes within an hour after a meeting ended. Everything followed the "one page per case" principle. Don't write more than two pages; thoroughly shorten the text, use bullet points, and fit it onto one page. I was drilled in the basics of business like that.

That's why I often say within the company, "Meeting materials don't need many pages," or "What do you mean, minutes a week after the meeting?"

At Epson, I was mainly in overseas sales, but when I joined, only the U.S., UK, Germany, and France were local subsidiaries, and we were in the process of sequentially acquiring distributors in various countries to turn them into subsidiaries. You have to build the brand and sales channels yourself. There are no shortcuts or magic counts beyond that.

Therefore, for Hikari Miso's sales channels and brand, there is no choice but to accumulate hard work. This is the lesson I learned at Epson.

Yes. However, when I graduated from university, I wasn't thinking about returning home at all. I just wanted to do overseas work, so I interviewed with Shinshu Seiki (at the time), and I was able to achieve that after joining. So, I enjoyed my work immensely.

For the last five years at Epson, I was seconded to a subsidiary in the UK, and I would get calls from home almost every day saying, "Please come back" (laughs). Hearing that, I started to think, "I can't just abandon my parents."

No, I really wasn't thinking about it around the time I graduated from university. Until then, I had seen my father working really hard, so I didn't have the feeling that I wanted to succeed him.

I didn't have the consciousness of taking over a family business or being an owner-manager from the start. I thought, "I didn't take over my father's business because I was struggling to put food on the table. I changed jobs." So, I decided that if I was going to do it, I would change it thoroughly, and I have consistently worked on "changing family management into organizational management."

I went through various hardships. In the composition of the board members, I worked on how to reduce family members and run it with non-family members. Now, everyone is non-family. Also, the biggest problem in Japanese SMEs is shares. In the end, the business manager equals share ownership, so you can't hold the casting vote without taking the shares. I have been doing this steadily over the past 20 years, and now the family's holding is just a tiny bit held by my father.

Even now, many distribution and food companies have owner-managers, but places that set rules even among relatives and properly separate the outside from the home are doing well. Places where that is messy don't go well. Excellent employees won't come to a company that shows such an unseemly side to its staff.

When I said at a board meeting, "This meeting is below an Epson section manager's meeting," my father got terribly angry (laughs). I think our company is probably the only one in the miso industry that has denied what the parents did to this extent and changed its form and shape.

I desperately created a support group, or cabinet members, to back me up, and most of the members lent me their strength. In that respect, I think I was very blessed. They are the members who are the core of the company now, and without them, the company wouldn't have changed. I can't do much by just being frantic on my own.

Well, I didn't study much (laughs). Even now, I regret that I should have studied more.

Among that, Professor Itsushu Totoki's sociology remains well in my memory, and I treasure the books related to Max Weber that he introduced during class. I was very impressed.

I feel that Japanese people still have a feeling deep in their hearts that "earning money equals being lowly." I think that comes from the Edo period's class system of samurai, farmers, artisans, and merchants, which looked down on "merchants." On the other hand, Protestants have a feeling that "money earned by working with sweat and tears is precious." I think that difference in thinking still has an influence today.

Also, I go overseas almost every month now, and Japanese people are thoroughly good-natured. They think that if they work hard, profits will surely follow. But Westerners and other Asians don't think that way. They try to lock in profits in a shorter term and run away early if a loss occurs. For some reason, only Japanese people have a tendency to say, "Let's think about everything with a long-term perspective."

This is a good point, but I am worried that in today's globalization, we might be left behind.

In the first place, the rapid deterioration of the Japanese diet happened after we lost the war. The U.S. had a surplus of wheat flour since before the war and sold it to Japan under the guise of aid supplies. And Japanese people were forced to change their protein sources from fish and beans to milk and meat. I think the diet gradually started to go wrong from there.

Since we were a defeated nation, it can't be helped, but changing even the diet shows the shrewdness of the U.S. strategy.

Miso is one example, but most basic Japanese foods have a food culture of over 1,000 years. The fact that it lasted that long means it is safe and secure. In fact, Japan is a world-leading country for longevity, and I think the reason is the regular use of fermented foods and low intake of animal fats. Therefore, I think we should proudly spread that overseas.

I have no intention of becoming a politician or a religious leader, but I want to promote the goodness of Japanese "food" overseas through the food business.

I have no desire to become a general food manufacturer, either in Japan or overseas. I want to become a pioneer in specific markets and create pillars of products that are only-one and number-one.

As a premise for that, having miso as a core business is very advantageous. Overseas, miso seems to be about 20 years behind soy sauce in various ways, such as application development. I think it's only beginning for miso to be arranged in a local style and enter the lives of local people.

Currently, the area Hikari Miso is focusing on most overseas is the organic miso series, and in the U.S., we have more than twice the number of products as in Japan. In the U.S., organic has become normal, to the point where even supermarkets like Walmart have organic PB (private brands).

We have been focusing on organic for over 20 years, and even in Japan, we hold about 70% of the organic miso market share, but I think it was good that we made this the main pillar overseas.

Especially in the U.S., consumer expectations for health are different. Taste is secondary; the more claims like gluten-free, sugar-free, or GMO-free (non-genetically modified) are attached, the better it sells.

Hikari Miso obtained gluten-free certification from a private U.S. organization a long time ago and displays that mark on its products. I believe that continuing to display certifications and marks and proclaiming "it's naturally organic" is the biggest pillar in our overseas strategy.

The vegan (not eating meat, eggs, dairy, or honey) and vegetarian movements have been increasing recently. For sensitive Western consumers, what they expect from Japanese food equals organic, so the environment has become favorable for miso.