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Beppu : KOMPEITO is developing a service that delivers healthy meals to offices and offices, with a focus on “OFFICE DE YASAI” but could you tell me the circumstances that led to providing such services?

Watanabe : Well, it's going to be a little long, but let's start by talking about how it was founded. I left college and joined a Japanese consulting firm called Japan Management Association Consulting as a new graduate. Therefore, the first thing we worked on was operation consulting on business improvements etc. at regional factories. When I worked as an operation consultant for about 3 years, I joined a team that creates agricultural consulting services, and that led me to get involved in agriculture and food businesses.

From there, while talking and working with various agriculture-related players, I heard many voices from producers that they were having trouble with sales channels. Nonetheless, there are not many options for distribution structures for agricultural products, and it has come to be understood that they have not changed much since the past. It is true that an EC site for agricultural products has been created, but it did not bring about major changes in the distribution structure at that stage.　　　　　　　　　　　　　

If that's the case, I thought I could do an initiative to liven up this industry with my own power, so I left the company and started a business. At first, I made an EC site, but it didn't cry and didn't fly away. An acquaintance bought it for me, and after about 2 laps, I was in a state where they wouldn't be able to repeat the next one, so I thought this wasn't going well. Before Oisix, radishbo-ya, and DAICHI wo MAMORU KAI were acquired, there were a lot of players in the industry, so I decided that it would be a little tough at this rate and stopped.

The next challenge was a greengrocer. Greengrocers are major distributors of agricultural products, so if you try a greengrocer, I thought there might be something new to discover. So, I rented a corner of an acquaintance's liquor store in Azabujuban and started a greengrocer.

In order to avoid waste loss, I went to sell unsold vegetables to a company I know in the evening. In the meantime, I told the president of a company, “It would be troublesome to get on the train with daikon or cabbage and go home. I received advice saying, “At IT ventures in Silicon Valley, there are salad bars, etc. as welfare programs, so it would be interesting to do that low-cost version of the service,” and I was convinced that that was certainly the case. So, when I packed cherry tomatoes and brought them to the office, I received comments from employees saying, “It's healthy and good,” and “this one is healthier and better than eating sweets when you're a little hungry.”

At that time, interest in health was increasing, and even in terms of workers' satisfaction, when considering population decline and aging, I thought that needs would increase even more in the future, and this became the prototype for OFFICE DE YASAI.

Beppu : Did 　you have a lot of trouble expanding the service from there?

Watanabe : It went relatively well at the beginning of the service. I was able to have about 50 companies introduce the service by calling out to companies I know and doing business in person. The refrigerator was placed and cherry tomatoes were delivered once a week. Then, it was picked up by WBS (World Business Satellite) and attracted attention.

At that time, Kewpie's business planner sometimes came to the shared office where we were working at the time, and we met by chance. “I know that service, I wanted to meet you,” and in the meantime, “Don't you need funds?” It suddenly developed to the point where “it is there.” Actually, at that time, there was a major incident where vegetables spoil in the supplier's refrigerator. Looking back now, we were amateurs at the time, and the reason was that temperature control etc. were not done properly. After much hesitation about whether to say this to Kewpie or not, I made up my mind and told them, a response like “I thought that would be the case” came back. Then, they even received quality control guidance, saying, “Then it's not just about money, it's because it makes sense for us to team up with each other,” and we worked on creating cold chain logistics.

Beppu : Your encounter with Kewpie led to the beginning of improvements in the backyard, such as how to make products, how to manage them, how to do logistics, etc.?

Watanabe : Exactly. At that time, there was no technology to cut and process vegetables, so they purchased and sold thinned cucumbers, small non-standard carrots, grapes that had come out of bunches, etc., but since they joined Kewpie, the movement of purchasing vegetables etc. from their routes and asking Kewpie Group factories for processing spread.

Beppu : After that, the scale was steadily expanding, wasn't it? Can you tell me the current number of domestic locations and the number of implementation results?

Watanabe : Currently, there are 6 manufacturing and logistics bases in Japan, and the cumulative implementation record has spread to 7,000 locations.

Beppu : As a characteristic of KOMPEITO's business, I think it can be raised that the last mile part to the customer company is carried out through the company's own logistics network. What was the idea that led to the idea of doing that part in-house?

Watanabe : The reason we handle last mile logistics in-house is pretty simple, and I think assets are money, real estate, internet access, and logistics. So, for me, logistics is an asset. In addition to simply creating a channel, we set up logistics there, and proceeded with the idea of creating our own distribution in order to increase value as an accumulated asset.

Beppu : Have you been proceeding with that kind of thinking since you started building domestic bases?

Watanabe : You're right. We asked companies that deliver products to each household, such as newsagents and milk dealers, and asked them if they could carry the last mile. In the past, delivery to the final base began when Kewpie had people carpool on a flight that delivered side dishes, and now it is on a scale where it can be carried out independently, so it is carried on a refrigerated charter flight.

Beppu : As regional bases were established in various parts of Japan, the number of things such as developing our own logistics network and processing local foodstuffs in that region increased. Have business models such as regional revitalization and local production for local consumption been built through the accumulation of such things?

Watanabe : Yes. From the beginning, I wasn't thinking about aiming for local production for local consumption. That's because we haven't been able to build that many bases either. However, the origin of starting this business was that while being involved in agricultural consulting, I heard many voices from producers saying they were having trouble with sales channels, and I had a desire to be able to eat what farmers from all over the country produced in various places. This is because if you do that, new sales channels will open up.

Our business is not eroding existing channels; we are creating a completely new channel, creating demand for eating vegetables and eating fruit. In other words, it creates the value of an environment where you can eat salads, fruits, and side dishes in a place called an office to work. For example, in Kyushu, vegetables harvested around Fukuoka are made into salads, and office workers around Fukuoka consume them. We're creating a new movement where people who haven't eaten until now eat in places where they haven't eaten until now, and I think it would be nice if we could make this even bigger.

Local production for local consumption efforts to purchase local ingredients and provide them to local customers have also been evaluated by regional banks for new possibilities and fun, and they have cooperated in various ways.

Beppu : How did the point of contact with the regional bank you just mentioned come about?

Watanabe : Digital marketing is the basic method for us to acquire customers, and the main process is to display a web advertisement, receive an inquiry, and ask a company to sign a contract, or have them come to an exhibition to sign a contract.

I thought it would be better if there were other ways to acquire customers, so at first, we went around consulting with office furniture agency companies to see if they would sell our services. We were able to obtain cooperation from about 20 to 30 companies, but unfortunately it didn't lead to much results. However, only 1 of them introduced customers from 2 to 3 companies every month. I was wondering why this company was able to find customers. I thought it would be better to ask about this directly, and when I listened to the story, I learned that this company is a regional bank group company, and information from that bank's sales person is linked to referrals. If you think about it, it is natural that regional banks are connected to companies in that region, and then relationships with regional banks expanded.

Beppu : That's what led to it. How many banks do you currently have relationships with?

Watanabe : We currently have agency agreements with around 40 banks. The advantage of partnering with banks is that you can not only develop customers, but also introduce processors, etc. I think being able to introduce legacy processors and producers that have not set up a website is also a big advantage.

Beppu : The OFFICE DE YASAI menu is also unique to that region, and there is a difference between products distributed in Okinawa and products distributed in Hokkaido, right? Will they be offered in other areas in the future?

Watanabe : It's part of it, but it's already started. Even at present, yogurt etc. from Iwate prefecture are distributed in Okinawa prefecture, and conversely, jelly using mangoes, pineapples, and acerola from Okinawa prefecture is being developed nationwide for jelly, etc.

Beppu : It's already started, hasn't it? To that end, it is necessary to extend the expiration date of products, and I think this will also lead to preventing food loss. Can you tell us about such initiatives and what you would like to work on in the future?

Watanabe : Originally, vegetables that were not standard and could not be sold to agricultural cooperatives, and grapes that fell out of the bunch were used as products. In other words, it started with an effort to support producers by turning what didn't turn into money into money.

There are times when inquiries are received from various companies such as JA due to this relationship, and an example leading to commercialization is asparagus potage soup, which was jointly developed with JA Aichi Keizai Ren. This uses the lower part of the shaft cut to adjust the length of asparagus produced in Aichi prefecture. The cut asparagus stalks are stretched, so they were discarded because they had no use. It was a real waste, but it was processed into a paste and commercialized as a potage soup that made use of the characteristics of the ingredients. Our product planning team, which also has registered dietitians, repeatedly made prototypes, and it became a product where you can enjoy the flavor of asparagus.

Also, the stem part of broccoli was also discarded, but broccoli ice cream was developed using this part. Going forward, I would like to increase efforts such as processing and utilizing the outermost leaves of cabbage.

If vegetables and fruits are produced, they may be left over, and parts to be discarded will also come out. I would like to successfully distribute such things as food.

Beppu : What measures are being taken to extend the expiration date?

Watanabe : In the case of cut fruits, they absorb water well and are deoxidized so that they can stay fresh for 1 week. In the case of vegetables, they are lightly pickled, made into kimchi, or processed to improve their shelf life. There is also an advantage of reducing logistics, inventory, and food loss when shelf life improves.

Beppu : Speaking of KOMPEITO, the management interview before the investment left an impression on me. All of the directors and executive officers came, starting with President Watanabe.

Watanabe : It was unusual for everyone to participate in the interview. That was because Beppu-san said “with everyone” (laughs).

Beppu : They said, “Can we all ask?” and they said, “Yes, please.” More than that, the impact of the vegetable cover that Mr. Watanabe was wearing was huge, and furthermore, everyone's cohesion as team members left an impression on me.

Watanabe : I was also happy that they accepted that figure. And I'm glad we all went. That's because I was able to have the other members see the president doing his job properly. The president's main job is fundraising and recruitment. Therefore, there is usually no opportunity for executives to see that kind of work being done. I think they were able to feel something in front of the serious situation at the fund-raising site.

Beppu : Were there any advantages associated with our investment?

Watanabe : Of course it is. There are direct advantages of receiving an investment, but I feel that the other benefits are also huge. For example, we receive support not only in terms of money but also in the business part in order for us to grow, such as being introduced to our partners or being introduced to potential customers and being able to connect them to sales. They also receive advice through regular meetings, so I am very grateful.

Beppu : There was talk that it might be okay for us to increase our investment a little more. However, when I heard the story, it was said that other people would also invest, and in the end, it was decided that Incubate Fund KK, Nissay Capital Co., Ltd. and JIC VGI would be equal. I thought it was a good distribution, and I felt that they made difficult decisions quickly.

Watanabe : Actually, I had decided on a trigger. Nissay Capital said “we can move” about additional investment. Nonetheless, since they were invested in Series A and B as lead investors, we took stock ratios into consideration and moved to search for others ourselves first. There were about 3 candidates, and I was thinking about asking Nissay Capital if they all failed.

Then, on Friday evening every week before I spoke with Ms. Beppu, I received letters of apology from the 3 companies.

I went to Nissay Capital for a consultation about this situation. A few days later, I met Mr. Beppu and received a positive response. Then, at almost the same timing, I was contacted by Incubate Fund to receive investment.

For our part, we want to raise the most, and we also want to consider the shareholding ratio. As a result, the three companies decided to invest equally. Searching for follower investors after that was easy compared to past rounds.

Beppu : How many banks did the regional bank VC invest in?

Watanabe : TOTTORI BANK,the Bank of Kyoto, the Chugoku Bank, and the Juroku Bank, then there were 4 banks. The Shizuoka Bank, the Bank of Iwate, and Hiroshima Bank were in the funding round before that. That's 7 lines in total.

Beppu : In a　ddition to OFFICE DE YASAI, we are also working on various new movements, such as working on vending machines, promoting overseas expansion of OFFICE DE YASAI, and the application service “WELLMOG.” What are your future goals?

Watanabe : One core part of KOMPEITO's progress is to further expand and dig deeper as a health-related welfare service in companies. Products using existing assets and using their distribution to slightly expand their focus into the vending machine business is also a major trend we want to advance.

When I thought about the current situation from a plus alpha perspective, I thought the company was there to solve social issues, and I started with the desire to revitalize the region, but there is also an aspect where the sense of revitalization becomes diluted as our business expands nationwide. Therefore, I have a desire to define a specific region, create an industry centered on the supply function of our business, and develop a city there.

Another thing is that our national power is declining now, so I would like to expand our business overseas, create an environment where people working at KOMPEITO can easily go overseas, and continue the OFFICE DE YASAI business from now on.

Beppu : It's about town development in a specific region, but does it mean that we will go beyond providing OFFICE DE YASAI in that region and aim to revitalize agricultural producers from the perspective of agriculture, etc.

Watanabe : I'm thinking about that in a slightly broader framework, and for example, I'm thinking about creating an industry first, regardless of whether we build a factory etc. in that area and do it as a partnership or ourselves. Also, I think it would be interesting if city development efforts centered around that industry could be promoted together with the administration so that the population of regions where population decline continues to increase.

Beppu : Can you explain about the new business “Well Mogu”?

Watanabe : This is also a welfare service for companies, and when an employee takes a picture of what they bought at a convenience store or ate out, the company uses image recognition to identify that food, score the degree of contribution to health, and subsidize the amount of money corresponding to the score.

Since the food is in the refrigerator installed by the company, OFFICE DE YASAI cannot be used without coming to work. Due to the seasonal situation, the number of remote workers is increasing, and it was difficult to introduce OFFICE DE YASAI services at companies with many direct return salespeople. When I thought that such issues could be solved, I took a picture of what I had eaten, and it led to the idea that if it was healthy, the company should provide cost support for that amount as a welfare program.

Beppu : Remote work is certainly increasing, so I'm thankful that benefits are also delivered to meals when working from home. Is this “WELLMOG” positioned as an additional service for existing customers using OFFICE DE YASAI?

Watanabe : It is also offered as an additional service for existing customers, but we will proceed with new implementations in the future.

Beppu : As another new business, the development of salad vending machines has begun.

Watanabe : SALAD STAND. This is a completely cashless salad vending machine and is currently installed at Shibuya Station on the Keio Inokashira-Line. It is characterized by having a patented “dynamic pricing function,” and it is a mechanism that changes prices according to time zones, inventory, and expiration dates.

Dynamic pricing itself is also drawing media attention from the viewpoint of recommendations for food loss, and it is covered in the news about once a week.

I feel that this business model can change the world. For example, we can join hands with supermarkets in various regions. Even when the store is closed, side dishes can be sold at vending machines in front of the store, or local supermarkets can open branches with only vending machines. I would like to carry out such initiatives as well. Vegetables harvested in the morning can also be sold through such a route, and it would be nice if the price changed steadily over time.

Beppu : The superficial form of the business, starting with OFFICE DE YASAI, is simple, but advanced IT is working behind it.

Watanabe : Yes. OFFICE DE YASAI is also developing an original system in-house, all at once for its management system on the back side. This is because it is also a business where it is difficult to make a profit without thorough operational excellence.

Beppu : Speaking of in-house development, all applications called YASAI PAY that can be used to pay for OFFICE DE YASAI have also been created in-house. In the future, will payments be limited to YASAI PAY, cash payments will be eliminated, and as a result, there will be no cash collection?

Watanabe : The service has already been completed, and the name YASAI cash register has been decided.

Beppu : You mentioned in the story that “companies exist to solve social issues,” but I don't think all business owners necessarily think that. I wonder if the reason Watanabe came to have such an idea is related to being at a consulting firm.

Watanabe : I don't think it was a special trigger, but I was vaguely thinking about it that way. The reason this company was named KOMPEITO is because when starting the company, we wanted to make efforts to make the world better.

The consulting fee isn't bad, so it's a bad way of saying it, but if you do a business that earns coins, you can leave it as consulting. However, since we started our own company, we wanted to take initiatives that would change something in the world. At that time, I still didn't have enough confidence to say “I'm going to change the world.” We wanted to do new initiatives ourselves and create an opportunity for “the world to change.” I think stimulation (shigeki) is necessary to trigger things to change, and that's why KOMPEITO's mission is to “Stimulating" the world. I thought that in order to stimulate the world, people with thorns and people of various colors must be gathered, so I thought kompeito, which has thorns and colorful, would be appropriate as a symbol, so I chose the company name KOMPEITO.

I had that thought from the time the company was established, and it hasn't changed even now, but now that it's been 11 years since starting a business, looking back, I think these 11 years have been my best time just surviving and growing. From here on, we can't say we can afford it, but we've reached a point where the organization has grown and the stage has risen a notch. Therefore, I would like to make it an organization capable of more socially useful initiatives so that social issues can be solved.

Beppu : I'm looking forward to it. Thank you very much for today.