It may not grab global headlines like Rakuten’s sports partnerships with FC Barcelona or the Golden State Warriors, or the company’s groundbreaking new mobile network, but Rakuten Agriculture is working to bring real change to Japan’s organic food industry — and the communities that rely on it for their livelihoods.
Think global, grow local
Launched in 2017, Rakuten Agriculture (formerly Telefarm) was born out of a desire to do something to remedy the slow but visible decline of rural Japan. Rakuten Agriculture CEO Shinobu Endo originally hails from Ehime Prefecture. Years ago, Endo worked as a service technician for medical equipment — a job that took him all over the back roads of his home prefecture to visit clinics across the countryside.
What he found there left a lasting impression: Abandoned schools, underserviced elderly community members and endless stretches of empty fields tucked in between mountains where crops once grew.
There were reasons, of course, that the fields had been abandoned. Some lacked natural water sources, others were too inaccessible to bring in mechanized farming, while others still were altogether too small to turn a profit. Endo knew he would need a new approach if they were going to build a business out of this abandoned land.
The answer, when it came to him, was surprisingly simple: organic farming.
How it works
With a significant portion of current agricultural workers approaching retirement age, the industry is in dire need of a new generation of workers and new approaches. With Rakuten Agriculture, the company hopes that by injecting a more interactive, e-commerce driven approach, younger workers will consider agriculture as an attractive career option. Rakuten Agriculture seeks to connect farmers and consumers throughout Japan directly online.
For the farmers, Rakuten Agriculture provides engaged customers willing to pay for produce up front, helping reduce some of the financial burdens facing farmers. This new system holds the potential to revitalize a flagging domestic agriculture industry. And for consumers, healthy and delicious veggies come along with the additional peace of mind of getting to know the people behind the produce.
Growing the organics market through education
Across much of the western world organic farming has become commonplace, with many consumers willing to pay a premium for certified organic produce. But in Japan, organic farming is still a fledgling segment of the market, with only about 0.2% of cultivated land area in Japan being used for organics**. To help educate the public on the value of organic produce and ultimately grow its potential market, Rakuten has enlisted the help of valuable partners, such as Tanita Cafe, where Rakuten Agriculture contributes produce and collaborates on menu selection, Gathering Table Pantry restaurant owned by Royal Holdings, as well as branded hotels like Super Hotel (known for being “natural, organic and smart”) and the Aeon Group’s organic supermarket, Bio c’ Bonz.
Reinventing a lost business
Rakuten Agriculture is doing more than just revitalizing the agricultural industry. In July 2018, Ehime Prefecture, where the company is based, was hit hard by a devastating flood. While Rakuten Agriculture survived, many neighboring businesses did not.
One of the businesses forced to close its doors was Shiromoto Foods. Their production facility in Ozu City was so badly damaged by the flood that they were forced to shut down.
Fortunately, the story has a silver lining: Rakuten was able to restore the local production facility and convert it into a 100% organic frozen vegetable factory. They then invited the employees who lost their jobs when Shiromoto Foods closed down to join the Rakuten Agriculture family and work at the upgraded facility.
“Rakuten Agriculture’s headquarters was also damaged in the flooding, but we knew we needed to reopen the business as soon as possible. We immediately started looking for a new shipping facility,” recalls Endo. “That’s when I met the CEO of Shiromoto Foods, Mr. Shiromoto himself. Originally we were only looking at their warehouse, which had been damaged and was unusable at the time, but then Mr. Shiromoto confided in us that he was thinking of letting the whole business go. He asked if we would be interested in repurposing their factory in the town, and that’s how our organic frozen vegetable factory was born.”
“The flood was so bad the factory was covered in water practically up to the ceiling on the first floor,” shared Mihoko Sasada, one of the newest members of the Rakuten Agriculture team. “We not only had to scrap all of the equipment in the factory, all of the products stored inside were wiped out. We were scrubbing floors and throwing out trash every day until the end of August.”
“After the flood, we were all so worried about work and even our daily lives,” commented Sasada. “When we learned that Rakuten Agriculture was planning to step in, we were relieved and happy that we would all be working together again.” Sasada and her team are now back and working at Rakuten Agriculture’s new frozen vegetable factory.
With the continued growth of the organic farming industry in Japan, spurred by a more organics-conscious public, Rakuten Agriculture hopes to see more farmers and food workers reap the fruits of success.
* Organic vegetables: Vegetables grown by certified growers in which production is inspected by accredited agencies as conforming to JAS standards for organic food based on law (JAS Law) relating to the Ministry of Agriculture, Forestry and Fisheries standards.
** Ministry of Agriculture, Forestry and Fisheries: The area of organic JAS fields in Japan (as of April 1, 2017)