A Hong Kong food-tech startup is challenging the Japanese coffee market

A Hong Kong food-tech startup is challenging the Japanese coffee market

Kamakura Foods, a Hong Kong startup founded by a Japanese-educated former Sony engineer, is challenging the bento market in Japan, where boxed lunches originated. The company plans to make its entry not by providing the food itself, but by offering a technology platform for automatically serving bentos.

Bentos fill stomachs all over Japan every day, especially businessmen’s stomachs during busy lunch hours. Some are home-made, but many thousands are sold in convenience stores, specialty bento shops, and even in restaurants to meet peak demand during lunch hours.

The company, which uses the brand name Wada Bento, has sold more than 600,000 hot bento pieces in Hong Kong since its establishment in 2019. It has 40 machines at 30 locations on office buildings, university campuses and construction sites. In the city, she runs her own kitchen to prepare up to 1,200 Japanese-style bento dishes a day, and sells Hong Kong cuisine from her dining partners to cater to local tastes as well.

The first bento vending machine in Japan, in Kitahama, a central business district in Osaka, will be located in an Ubunto Monogatari outlet to sell ready-to-eat lunches for the small local chain.

“Japanese people are experts at making bento,” Jason Chen, founder and CEO of Kamakura Foods, told the Nikkei Asia. “So our direction is not to invest in kitchens.”

This article is taken from Nikkei Asia, a global magazine with a uniquely Asian perspective on politics, economics, business and international affairs. Our correspondents and external commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the largest and fastest-growing listed companies from 11 economies outside Japan.

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What Chen sees is a great opportunity in providing a logistics solution for hot bento service, including the supply chain between the kitchens and their bento vending machines. “From a business perspective, Japan is a huge market” where speed and labor shortages have become critical factors, he said.

Chen, who earned a master’s degree in electrical and electronic engineering from the University of Tokyo and worked as a software driver design engineer for display devices at Sony in Japan and then at Solomon Systech in Hong Kong, saw an opportunity in serving hot bento after seeing and experiencing difficulties in purchasing a meal. Lunch during peak hours in central office areas, especially in major cities.

According to an annual survey by the Japan Takeaway Association, sales of “steamed rice, etc.,” which largely consists of bento rice balls and onigiri, totaled 4.77 trillion yen ($31.6 billion) in 2022, an increase of 7.4 percent. percent of the previous year and exceeded the pre-Covid 2019 year.

The Osaka bento store, where the first vending machine will be located, is located next to 7-Eleven and Lawson, which are operated by two of the country’s largest convenience store chains. In Japan, convenience stores offer a wide range of bento selections and allow customers to heat them in microwaves.

Although local bento shops may be able to offer quality food at competitive prices, they face stiff competition, especially during weekday lunch hours, because people don’t want to wait in line.

“Normally, if there are more than three people in line, customers tend to go to any of the smaller stores,” said Seichiro Tsukuda, project manager at Osaka-based mid-sized brand Harada, Kamakura Foods’ Japanese partner.

Vending machine

Chen’s latest model of the vending machine is capable of delivering bento within 17 seconds after a customer places an order, and has been redesigned to be accessible to people who use wheelchairs. The machine holds multiple types of bentos, allowing customers to choose different options.

Tsukuda told Nikkei Asia that Ubunto Monogatari hoped the quick-service vending machine would prevent customers from fleeing to convenience stores.

Japanese retailers, especially smaller ones, face serious staff shortages. The new machine is expected to allow them to expand their sales opportunities after 6pm to a new market – dinner – without hiring new staff. “We can help increase their revenue,” Chen said.

The machines are rented under a subscription model where certain fees are charged according to the sales amount.

A key part of Chen’s technological solution is temperature control. Food is constantly kept at a temperature above 65°C throughout the supply chain in order to provide hot meals to customers and prevent the growth of bacteria that may cause food poisoning.

These “hot chain” logistics services are monitored and controlled by GPS and cloud-based IoT technology. After the bentos are made, they are placed in special warming containers, usually capable of holding 48 lunch boxes, where the heater is set to 70 degrees Celsius or just above.

The system allows checking and adjusting the temperature and humidity inside the container remotely if necessary. There are no special features required for vehicles delivering containers to vending machines. The company has received eight patents so far out of nine filed in Japan, the United States and China.

A Japanese shopper inspects ready-made meals in a convenience store
In Japan, supermarket chains such as 7-Eleven offer a wide range of bento lunches at competitive prices © Akikazu Ishii

Securing food safety is a critical issue, especially in the wake of a major food poisoning case in the northern Japanese city of Hashinohe in September, which was caused by poor temperature control by a local bento maker.

Local health authorities said that at least 554 people had been confirmed to have been affected by the bentos served by vendor Yoshidaya.

Hiroki Yoshida, president of Yoshidaya, admitted to reporters on October 21 that the main cause of food poisoning was “improper temperature control.” He admitted there was a “lack of comprehensive understanding of the risk of germs multiplying over time” and said the 130-year-old company, which he inherited from his father, succumbed to “arrogance and negligence” because it put in too much money. Focus on profits.

This may be a valuable lesson for Chen, who is about to set foot in the Japanese market, where Yoshidaya was subjected to an indefinite ban on doing business, which was only lifted on November 4 after more than 40 days, leaving a serious stain. On his long body. -Earned reputation.

Chen is seeking a fourth round of financing next year to support his expansion plans in Japan, and Harada’s Tsukuda told the Nikkei newspaper that Harada is in talks with other Japanese partners.

So far, Kamakura Foods has raised “several million US dollars,” according to Chen, including from three venture capital funds, the City University of Hong Kong and Cyberport, the city’s technology incubation center, where the bento machine operates.

Golden Resources, Hong Kong’s main rice trading company and one of the investors, said its goal is to “support startups in food chain expansion, food technology and artificial intelligence applications,” which would increase demand for rice imports into the city. The company, which also operates Circle K convenience stores in Vietnam, is working with Kamakura Foods to bring its vending machine system to the Southeast Asian country.

The next logical step for Kamakura Foods would seem to be mainland China, where wages are rising and automation in the food industry is growing. But this does not occur to Chen, as he believes that the market is “completely different.” Given limited resources, he wants to prioritize Japan over China.

Additional reporting by Kensaku Ihara and Peggy Yi

a Issuance This article was first published by Nikkei Asia on November 16. ©2023 Nikkei Inc., all rights reserved.

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