Many of Japan’s tofu producers are struggling to stay in business, even as people eat more of the plant-based source of protein. Not Yamami, which is forecasting record profits thanks to automation and mass production.
At its newest factory at the foot of Mount Fuji, the tofu-maker, one of the few that’s listed, can produce 15,000 units of the bean curd each hour. That’s several times more than its rivals, the company says. Yamami is able to tap pristine groundwater with a stable temperature at the site — key for making tofu, an important part of Japanese cuisine for centuries.
Yamami expects to post all-time high profits and revenue in its financial year ending in June 2024. Its shares have soared 138% this year, beating all 10 of its Japanese packaged-food peers according to Bloomberg-compiled data, as well as the broad Topix and Nikkei 225 indexes. Its success stands in contrast to domestic competitors, who are suffering as high resource prices worsen their already tight margins.
"People’s image of tofu-makers is of workers coming in late at night and getting tofu out of cold water with their own hands, and cutting it with a kitchen knife,” said Toru Yamana, the company’s president, in an interview. "Many companies still do it like that, but that’s behind the times.”
The Shizuoka Prefecture plant and two other factories are giving the tofu company the advantage of scale, reducing costs and allowing it to sell its products at a lower price tag than competitors. That’s helped it increase share in a market where small, often family-run tofu-makers still account for significant portion of the industry’s sales.
Government data indicates that Japanese households are spending almost 30% less on tofu now than in 2000, even as the volume consumed rose by 9% during the same period, as they buy cheaper products.
Import prices for soybeans used to make tofu doubled in the five years to March 2022, resulting in about 40% of mom-and-pop shops suffering losses due to higher expenses, according to Teikoku DataBank data. The number of tofu-makers in Japan has more than halved over the past 20 years, while bankruptcies in the sector are set to hit a record high in 2023, the credit information research firm says.
Yamana, 39, said his love of machines may have helped the tofu-maker push ahead with automation, for a food that has a long history of being handmade.
"I always install the biggest machines possible,” said Yamana, who took over as president from his father in 2021. "If that goes well, that will hugely improve our efficiency. But I’ve made a lot of mistakes too.”
Initial attempts to make tofu in a big factory were met with skepticism. Bankers told Yamana’s father in 2000 that he had "no power, no profits, no outlook and no customers,” according to a presentation to investors this September.
Now with the opening of the Mount Fuji plant, much closer to Tokyo than two other factories in western Japan, the Hiroshima-based company aims to compete in what’s by far the biggest market in the country. Distance is important because tofu goes bad quickly. The company said the plant posted its first monthly profit in September since it began operating in 2019.
Yamana said that while the company is focusing on expansion in the Tokyo area in the near term, one day his company could look to do business overseas. "If we are to expand, we want to make people eat tofu not because it is healthy but because it is tasty.”
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.