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We spoke to President Koichi Fujita, who has taken over the world-famous Fugetsudo Japanese sweets shop in Hitachi City, Ibaraki Prefecture. He discusses the reasons for inheriting the business from the parents, the challenges he has faced and the potentials for overseas markets.
My name is Koichi Fujita, President of Hitachi Fugetsudo Co. Our company was founded in 1948, and this year marks 76 years of our business. I am the third-generation owner. I was born in 1983, and Windows was launched when I was in junior high school. I felt that the age of computers was coming, so I wanted to become an SE during high school. But I failed the national certification exam in my third year of high school, so I was depressed. Then, my mother said she would allow me to move to Tokyo if I go to a confectionery college. I had grown up in the countryside and had a strong desire to go to Tokyo, so I enrolled in a confectionery college.
I learnt the depth and joy of Japanese confectionery for two years there. And after graduation I lived in and trained at a confectionery shop in Kanagawa Prefecture for about five years.
When I was thinking about changing to a different shop, I received a phone call from my father who said that his health was not well. And I decided to take over the family business.
I returned to my parents' home and worked there for about 14 years before taking over the business in 2020. I incorporated the business and became its representative director myself. Later in 2021, I attended a business school organized by Ibaraki Prefecture, where I discovered my desire that I want to make people smile with my actions.
My desire to make my loved ones smile led me to create our company's "Manyokan" （soft bean jelly with a luxury chestnut） product, which also won the top prize at that business school.
The most difficult question for me at that business school was: 'What do you really want to do in life?’ I think most people who are trying to start up a new company already have this answer in mind before attending such a business school.
Meanwhile, I grew up in an environment where there was no distinction between work and private life from a young age. And people always expected me to take over the family business. So, I never had the chance to think of what I wanted to do as an individual. It was painful to realize that I didn’t have any personal opinions, as I had taken the family business for granted.
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Obviously, it was too soon to take over the business when I returned. My parents thought that they could not leave it up to me until I had reached the level they admitted. They had taken out a 10-year loan to build the current shop and suggested that I would replace them when that loan was paid off.
I really wanted to, I had wanted to be a SE so I tried to do the administrative work, etc. on the computer. Progress was slow because I was the only one who could do it. So, I have been doing it little by little, and the same with e-commerce sales. I started both of these after 3-4 years after I came home.
Yes, it was. The first thing was to learn the taste of my shop. While I was learning that, I was making my own monthly sweets, trying to create my own colors, my own unique confectionery.
But back then, social media was not as big as it is now, and we had fewer people in the area than in the city. So, it was very slow to have my shop recognized. Even if we told people that we were going to launch this sweet this month and that sweet next month, they wouldn't realize until the end of the sales most of the time.
Sweets that are rarely available locally remained out of reach forever (laugh). People around our area are so laid back.
There are many other things I would like to do but keep the balance to 70% manufacturing. My father believes that you are a manufacturer only if you make things and I cherish the idea.
I incorporated at the same time as I took over the business, and I was very lucky because I didn't have to take over the shares. If there was a difficulty, it was the balance between my father and myself.
Our business is strongly local-based, so I was a bit concerned that my father's affiliates and peers from his generation might see me as unreliable.
When I was young, I was often told not to ruin the shop’s legacy. My parents sometimes asked me if I would want to buy anything from a pastry shop where a delinquent son roams.
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Mochi (rice cakes) are currently popular in France and the US. I heard that there are mochi-filled baked sweets in Paris. That shows how popular Japanese sweet is. And the traditional Japanese sweets are mostly vegan. Almost no animal ingredients are used. So, those increasingly health-conscious countries and overseas Chinese people can be our target group. There are many wealthy overseas Chinese, and Chinatowns are everywhere around the world.
The Japanese confectionery industry is very conservative: many people hesitate to raise prices even by 10 yen. It is old-fashioned and bound by a fear of change. There is a belief that if you raise prices, it's no good, it's bad. While raw materials and labor costs are rising, the need for selling at an accommodating price is not recognized.
Currently, we are selling our products in Taiwan via cross-border EC, but the selling price in Taiwan is 1.5 times higher than in Japan. We cannot sell at the same price as in Japan because of distribution costs and other factors. If profits are thin, the company and employees will be exhausted. We are fine if we can deliver the products to the people who want Japanese goods, who want them even at a higher price than in Japan, and who like Japan.
The cross-border EC is easy to start because EMS is very good, but it's difficult to scale it up. So, raising awareness through B2C sales, etc. is important. I think the key is connecting with the local people who could be the influencers.
Visiting the local area and understanding the atmosphere and local characteristics lead to place the timely and effective advertisements.
For example, China has the Chinese New Year and Mid-Autumn Harvest Festival. And people start researching souvenirs on the internet a month and a half before they return home. In Japan, this is just two or three days before going home.
We need to understand what kind of cultural background and lifestyle the local people have.
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I want to expand B2B. We need to connect with local agencies. There are a lot of challenges, but we are taking seminars on expanding our overseas sales channels. I hear that exporting to North America is not a problem once you find a distributor. The distributor is supposed to take care of everything up to retail.
There is also a matching service by JETRO and others. And if you register your business there, you may receive direct contact from local retailers. We don't have an English-language website for this, so we hope to launch it this year (2023).
I would like to do it. Actually, a friend of mine who is a company president lent me some space in his booth to do some demonstration at a symposium. The International Council of Museums was held in Kyoto for the first time in Japan in 2019. There were people at the director level of world-class museums and art galleries such as the Louvre, Orsay, the British Museum and the Metropolitan Museum there.
We did a demonstration at the booth. But people who watched our demo thought we were using wax. I didn’t know what to do anymore because we gave a wrong impression even though we were wearing kimono. The regulations did not allow us to carry out a workshop, but because we could not get enough people on the first day of the three-day event, we secretly started small workshops from the second day. Then suddenly we got a long queue.
That's right. Ibaraki Prefecture is also taking inbound tourism seriously. Recently, more and more people want to visit places that are not in the guidebooks, and there are people who are looking for experiences that are only available there. So if you come here, I would like to help any way I can.
Once, I invited people from overseas to give me feedback, and they said that anko (bean paste) is not well known and that we need to teach them about the ingredients and history of wagashi (Japanese traditional sweets), as well as the stories of the farmers. So, I believe that people will find value in such learning.
I believe that continuing the family business alone is far from enough. We need to incorporate entrepreneurship and resources into the family business, so we would like to explore the possibilities of NFT and FoodTech.
Fugetsudo : https://www.kasho-fugetsu.net/
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