|< Example 2 >
Reactivating the Village with "Yakon," a Health Vegetable Native to the Andes, South America
|Tsuchi No Megumiya (The Kindly Fruits of the Earth Society, Kita Tachibana-mura, Gunma Prefecture, Japan)
Tsuchi No Megumiya (The Kindly Fruits of the Earth Society)
Tetsuyuki Tomaru (age 68)
Manufacture and sale of drinks and foods
#Year established, incorporated
1 worker (4 volunteers)
|1. Geographical location of the company
Kita Tachibana-mura, Seita-gun, Gunma Prefecture has a total area of 18.89km2 and is located on the southwestern slope of Mt. Akagi at an altitude of 140-653m. The village has the Tone River flowing in its southwestern part, and is bordered on the south by Maebashi-shi, the capital of the prefecture, beyond Tachibana-yama. The village consists of 16 administrative regions and is favored by convenient traffic, such as the Kan-etsu Highway and the Joetsu Line. A half of the working population engages in the tertiary industry. The culture of vegetables, flowers and trees, shiitake mushrooms, and other crops is the main industry of the village, with most of the households being complex part-time farming ones.
|2. Main business areas and characteristics
Tsuchi No Megumiya engages mainly in producing and selling health foods made of "yakon" native to the southern Andes. Yakon is a composite crop native to the Andean Highlands in South America. Resistant to cold weather, its bulbs are planted around April and is harvested in October to March. It is shaped like the sweet potato. When raw, it is crispy and chewy and gives a slight sweet taste. The leaves, stem, and root of the yakon contain an abundant dose of fructooligosaccharides, which increases probiotic bacteria in the intestines (bifidobacteria), and polyphenol, which has an antioxidation effect. Tsuchi No Megumiya handles a total of five items: "yakon tea" (a tea made by drying and processing the leaves and stems of yakon) and "yakon juice" (juice made by squeezing the root), along with the dry potato, kasu pickles, and miso pickles of yakon. The agency also sells seedlings to producers.
Last year's sales totaled 800,000 yen for 3 tons of roots and 1 ton of leaves. The main sales channels include cooperatives and trading companies. The agency also engages in retail through mail-order service. The differences between this agency and its competitors producing and selling yakon are: chemical-free culture, culture with non-chemical fertilizers, the use of yakon juice with 100% juice with no additives, prices 25% lower than those of its competitors, and individual packing where tea leaves are subdivided into 30 days worth of tea bags.
|3. How the agency was founded and how it relates to commercial and industrial associations and prefectural federations
Mr. Tomaru worked for laboratories, plants, and factories of Japan Carlit Co., Ltd. (a chemical company listed in the First Section of the Tokyo Stock Exchange) for 23 years, and resigned when he was in the mid-forties. Mr. Tomaru worked for a famous photographer for ten years, during and after his service at the company, half for pleasure and half for business. Using the experience and knowledge he had acquired from the days he worked for the photographer, he opened up a processing laboratory. For more than two decades since then, he has been running his business while working as manager and as officer of the local commercial and industrial association for 15 years including two terms as vice chairman. To reactivate the village as part of the activities of the commercial and industrial association, he worked actively by means such as helping to develop miso and buns with a bean-jam filling as local specialties. He also created a festival of a kind that had never existed in Kita Tachibana-mura before, and developed it to a scale so important as reported in a local newspaper. Through such activities of the commercial and industrial association, he came to believe that people should develop special products that are related both to agriculture and to commerce and that are characteristic enough to reactivate the village of Kita Tachibana-mura.
On the other hand, Mr. Tomaru came to wish to do something about the local environmental problems. He then first tackled the issue of garbage disposal in 1989 and set up a 17-member NPO corporation, Midori No Kaze (The Green Wind), for promoting environmental conservation and the use of fertilizers for organic culture in 2000. Through such activities, Mr. Tomaru acquired the viewpoint of environmental conservation gradually. Furthermore, since he was witnessing the increasing obsolescence of the developing equipment in the processing laboratory established and run by himself, he had come to want to tackle food manufacturing, which undergoes less frequent technological innovations, rather than industries where he would have to make technological renewals frequently, if he wanted to set up a new enterprise on his own next time. Based on such an experience and thinking, he came to believe that favorable products that are the chief players in village reactivation would be processed foods which are environmentally friendly and good for the health. At first, Mr. Tomaru paid attention to the Malta jute, which is now widely known as a health vegetable. To sell it as a processed food, he considered introducing it as a local specialty by means such as trying the freeze-drying of the Malta jute for the first time in Japan. However, he judged that the Malta jute would be appropriately used as a raw vegetable, to his regret, rather than as processed. He thought that, if sold as a fresh vegetable, the product would unavoidably have to compete in pricing with agricultural products imported from overseas. He therefore gave up producing and selling the Malta jute.
As he kept looking for products to reactivate the village, he met the yakon through the intermediary of a professor at Ibaragi University one day. Mr. Tomaru decided that nothing but the yakon was the vegetable best suited to be produced and sold as a processed food and decided to aim to establish it as a special product for Kita Tachibana-mura. The most important point that made Mr. Tomaru finally choose yakon culture as the main leader in reactivating the village was that it is a vegetable suited for processing, environmentally friendly, and good for the health. Another appeal of the yakon is that it is harvested in winter, thus not overlapping the culture periods of the turmeric, Chinese cabbage, Japanese radish, or spinach, which are the local vegetables.
Mr. Tomaru gathered eight farmers, founded a Gunma Prefectural Yakon Dissemination Association, worked hard to introduce the yakon as chairman, and conducted repeated surveys and studies to introduce it, by means such as visiting yakon producers in Miyagi Prefecture. Labor for agricultural work required to cultivate the yakon was secured by luring volunteers who agree to the organic cultivation of the yakon aiming to reactivate the village, from the members of NPOs for environmental conservation. To develop marketable products, he and his coworkers repeated enhancing their tastes, requested the local industrial laboratory to analyze their effective components. In terms of their safety, they obtained a permit from the local health center. They established "Tsuchi No Megumiya" at last in January 2001. While working hard to establish a production system for the yakon and secure sales channels for it, Mr. Tomaru went to the Entrepreneurship Workshop (initiated in 2001) organized by the commercial and industrial association in an attempt to acquire more managerial knowledge.
|4. Problems encountered so far
In initiating his business for Tsuchi No Megumiya, Mr. Tomaru secured office space by converting the floor above his stationery goods shop. For funding, he applied to the National Life Finance Corporation for a loan of 30 million yen for purchasing a complete set of equipment for integrated production and for building a workshop for packaging and other operations. Regrettably, the corporation turned down his application. He was then obliged to review and reduce his initial plan. He and his coworkers then gave up on his idea of integrated production with the organization's own equipment. They then decided to outsource the processing of tea leaves, which is one of five production processes (cultivation, harvesting, drying in the shade, processing of tea leaves, vacuum-packing), to a tea manufacturer in Shizuoka for the time being. Since they outsourced a part of the manufacturing process, the equipment that they bought when initiating their business was limited to equipment for vacuum-packing (1 million yen).
|5. Future prospects
Production of this fiscal year is projected to be 10 tons of roots (as opposed to 8 tons last year) and 1 ton of leaves. Sales to cooperatives and trading companies are projected to reach 4 to 5 tons. The organization is also scheduled to sell 3,000 of 10,000 seedlings, thus projecting a total of 2 to 3 million yen in yearly sales. Mr. Tomaru does not intend to limit the operations of Tsuchi No Megumiya to the yakon. In addition to the yakon, he wishes to provide high-value-added products and services for enhancing the health of the local citizens. To spread the yakon to the whole village as a special product of Kita Tachibana-mura, he has requested five members of the local producers' council to conduct test cultivation. If the test cultivation is put on track, the organization is projected to make a full-fledged start with an expanded cultivation area next year.
He and his colleagues want to build a log house for installing machinery and equipment. But they do not have leeway in their funding and hesitate to introduce it. Why? Because they want to build it by joining forces with agricultural volunteers engaged now in this enterprise. They intend to purchase equipment for drying tea leaves (6 million yen) and convert the processing of tea leaves, which they outsource now, to internal production, thus organizing a system for integrated production, if they gain a little more leeway in their funding.
They are scheduled to expand the lineup of yakon products, not limiting it to tea and juice. More specifically, they are now considering commercializing ice cream, sherbet, udon, bread, and yoghurt. Particularly notable is the udon version, which is made by kneading freeze-dried powdered yakon in it. It is chewy and glossy, and sweet but sucrose-free, thus being best suited as a dietary food item. It is therefore a promising product. As for yakon tea, which is a product already on the market, they are considering enhancing its components and tastes by introducing a technology for converting yakon roots and leaves together into tea.
(4) Opening up sales channels
They are scheduled to establish a homepage for Tsuchi No Megumiya with the cooperation of the commercial and industrial association. They are scheduled to start web sale.
|6. Summary of the considerations for making business startup a success
The startup of Tsuchi No Megumiya proved successful for two reasons: (1) it made full use of supporting services (such as the Entrepreneurship Workshop and the dispatch of experts) of the commercial and industrial association and (2) it obtained the cooperation of volunteers and other supporters. This year, the first year after its foundation, Tsuchi No Megumiya was able to devote its energy to developing products and open up sales channels without being concerned about its profitability. Why? It is probably largely because Mr. Tomaru, the president, earns his living with different operations in a separate company, thus not having to depend financially on the incomes of Tsuchi No Megumiya.