Doing Good, Doing Well（Podcast）

Narrator: Doing Good, Doing Well is a series of podcasts from the Japan External Trade Organization or JETRO, targeting businesspeople interested in investing in or considering expanding into Japan. JETRO is a governmental organization promoting investment in Japan and business partnerships between Japan and the world.

Today’s society confronts a wide range of problems, including climate change, energy issues and aging populations. Companies and organizations around the world are tackling fresh challenges in an effort to solve these problems.

In this series, we bring you interviews with forerunners at foreign-affiliated companies that have established bases in Japan and are working on solutions.

Today’s theme is Sustainability Starts with Good Taste.

A food tech company from Singapore has arrived, with a mission to up-cycle surplus food.

What challenge is Crust Japan tackling to create a better future? Let’s find out.

Ayaka Kadotani: Hello everyone. I'm your navigator Ayaka Kadotani. Today I have the pleasure of interviewing Mr. Travin Singh, CEO of CRUST Group. CRUST Group is a food-tech company founded in Singapore in 2019 with a Japanese subsidiary established in February 2021. I'll be asking questions regarding the group’s business and its entry into the Japanese market. Travin, welcome to the show.

Travin Singh: Yeah, thanks for having me. Very nice to be here.

Ayaka: First up, can you quickly explain what exactly CRUST Group's business entails?

Travin: Yeah, sure. So basically everyday we throw out surplus food. Food that is basically still good to eat, but a lot of companies actually just still cut them, right? So the CRUST Group up-cycles this surplus food into different products, such as beverages and we basically transform this surplus into products of higher quality. So what we call them is valorization.

Ayaka: Right.

Travin: For example, we ferment the sugars in fruits, bread, rice and so on to convert them into alcohol. So for instance, for CRUST's side it is beer. So that's how we develop our products such as CRUST beer brewed from leftover bread. In Japan, we call it CRUST LAGER and CROP, you know basically a non-alcoholic beverage from fruit peels and in Japan, we actually use Amanatsu. So to create these products we connect with a wide range of partners, we share our awareness and values as well, such as companies that provide us with these leftover bread and also farmers who provide fruit peels that would otherwise be discarded. We couldn’t do what we do without this collaboration. In addition to making these B2C products, a big part of what we do is B2B business.

Ayaka: Yeah.

Travin: For example, CRUST Group collects food loss from large facilities such as supermarkets, hotels and we also up-cycles it for them. Our mission as a company is to reduce worldwide food loss by 1% by 2030. To that end, we do collect data as well on how well we reduce food loss and how much we contribute to reducing CO2 emissions, and we actually share this data with our partners as well.

Ayaka: That is fantastic. So I understand that the idea of up-cycling food waste and loss into beverage products comes from a certain sense of awareness about some of the issues that we have in the world right now. Can you tell me a bit about that?

Travin: Yeah definitely. I think for myself, a lot of my past and how I have been brought up have been a huge influence for me. I come from a really large family, and I'm also the youngest kid. I'm the fourth kid. Both my parents did not earn a lot of money growing up, so we had to make ends meet essentially. So like my mom if she cooks for the family today, and if we don't finish the meal today, she'll incorporate today's meal into something new tomorrow. And she did this, not because she was a sustainability advocate, she did this mainly because we didn't have a lot right and she had to maximize her resources. So that's the exact same mentality that I grew up with and it's something that I started CRUST with as well. It's essentially to look at what's around us and maximize every single resource that we have instead of buying or growing something new. Yeah so guided by this principle that I've learned from my mom and essentially, I've also been brewing beers for a while then, so naturally what I thought about was to always basically start a company where we can actually just up-cycle surplus food and whatever is around us and maximize it right into a beverage. And then you know we also started realizing that a lot of this B2B food and beverages companies were also throwing away or donating a lot of food waste and we thought that we could come in from a very B2B angle also. And you know the more you learn about the market right or the world right or food loss in general right, you then also realize that 1.3 billion tons of food are wasted yearly. According to the UN (United Nations), this food loss accounts to roughly around 750 billion dollars’ worth of food loss and not just that, it's a real detriment to the environment and also global warming for example. The volume of greenhouse gas emission from food waste is about 8% of the total amount of greenhouse emission gases. And that's 4 times the greenhouse gas emissions of the airline industry.

Ayaka: Right, that's definitely a huge amount and that's something we'll need to work on right now. So what do you think is necessary to solve such issues?

Travin: So as mentioned earlier, CRUST Group's target is to reduce 1% of global food loss by 2030. Of course, reaching that goal will depend more heavily on collaboration than on competition. We also have a goal in the company, like the way we look at the future, we believe that a future on food should be more collaborative and less competitive. And you know our efforts to promote our up-cycling business depends critically on collaboration with a wide variety of organizations. You know one company like CRUST alone, we can only do so much. You know we're also not naive right, so we know that we probably need to collaborate with a lot more other companies right, each one of us leveraging on our own strengths. We can potentially then achieve our goals you know that were once thought impossible.

Ayaka: Sure.

Travin: Then at the same time, the need for collaboration is also the main reason why our business is primarily B2B. In the last 30 to 40 to 50 years, the beverage industry hasn't really changed much and a lot of companies focus on just selling their own brand. You know so for us, B2B has been and also will continue to be like our main model. And you know we adopt a holistic approach, mostly taking a bird's eye view of an entire supply chain and ecosystem while we partner with a lot of different partners and organizations, not only to just like up-cycle the surplus, but also we also look at what's within the market and what is certain produce that we can even use as a substitute for your traditional raw materials to make any kind of beverage. Then we also do gather and publish data on our business results and their impact on the environment. You know we basically want CRUST Group to be the cornerstone for solutions for up-cycling in any market that we are actually in and we want to be able to show a lot of the other F&B (Food&Beverage) partners that there are definitely much better ways to do things and we don't have to be a detriment to the environment as we scale.

Ayaka: Well, I love how data-driven you are and how well you collaborate with different partners. It's so amazing. So you established CRUST Japan, your Japanese affiliate in 2021. What led to that move?

Travin: So we have been a part of various different start up programs worldwide back in 2020. I think some in Vietnam, Thailand, Singapore and the US, and two in Japan, actually. And you know we won an award at Hack Osaka and then you know in another program called Startupbootcamp Osaka. The idea for us to enter such programs was to share more about our company and understand more about the market as well, meet different mentors, companies who could potentially help or develop what we already have. And then what we'd realized was the Japanese government was like more less grappling the Sustainable Development Goals (SDGs) side as a matter of national policy. And you know we're trying to build policies revolving around food waste reduction also, so in the instance, we actually thought that okay maybe this could also be a really good market for us. On top of that, we won an award at Hack Osaka and it actually shows that maybe there really is a market for us here in Japan. And I think my upbringing as well of not wasting food is very similar to Japanese culture as a matter of fact. So yeah so I think these were some of the reasons and we started meeting a lot of different investors, companies, you know increasing our own network here in Japan and we saw a really good traction. People really bought in to the concept and then of course, in between we met JETRO as well, and we've had so much of help from JETRO. They have actually matched us up with different companies, we've also met government organizations like the Ministry of Agriculture, METI (Ministry of Economy, Trade and Industry) as well, and yeah, I think all-in-all that was essentially what led to us entering the Japan market, and yeah, no regrets.

Ayaka: Well that's great to hear. It seems like you’re enjoying your adventure. So what makes the Japanese market distinctive in your view?

Travin: The size. I mean, Singapore is a very small market. It's a great place for investor relations, test market and all but Japan is where you can actually really scale the model. I think just the size alone right and also because of the culture that I mentioned earlier, the concept of not having food waste, makes this market a lot more interesting for CRUST Group as well.

Ayaka: Right.

Travin: And when I talk about size right, a lot of the convenience stores here is in hundreds and in thousands of locations right. Not just convenience stores, but supermarkets, hotels, you know even F&B groups, for example. And you know so that's why I also want CRUST to become more advanced and improve our skill sets faster right so that we can respond to the Japan market. And Japan also has a lot of their own produce right, so the opportunity for us to actually come in and help a lot of the farmers you know could be a lot more fulfilling for us at the same time, because in Singapore, we actually import about 95% of our produce.

Ayaka: Well that's fantastic. So much good insight about the Japanese market, there are so many things that I didn't even notice from the perspective of a person who has been living here all my life. Thank you for that. So what are some things that you value the most to keep your Japan business on track?

Travin: So I think in Japan, or any other market we're in, we actually want to pioneer a movement and because of sustainability. But it's not just sustainability that we stand for. Our B2B model is also very different. Every other beverage company worldwide, they usually only make products for themselves, whereas for us, we actually do the same, but we also focus on the B2B model, because we believe that future of food should be more collaborative and less competitive. And aside from pioneering a movement and also the B2B concept, what we actually focus on is hyper local. In Japan you have 4 islands and 47 prefectures so it's going to be super interesting for us to work with different prefectures and up-cycle the surplus in those prefectures to make like a prefecture-focused CRUST or CROP. It could also potentially tie back to tourism maybe.

Ayaka: Sure.

Travin: In the future. So everything I've mentioned, I think one of the biggest focus that we have in the Japan market is that we don’t want people to look at us as a Singapore-company setting up a shop in Japan.

Ayaka: Right.

Travin: You know we want people to understand that CRUST Japan is a Japanese company for the Japanese market to up-cycle the food waste in Japan, to reduce food waste in Japan, to create Japanese driven products for consumption in Japan. So I think that's what we stand for and we hope that that would be the way forward for us in the future.

Ayaka: Well that's brilliant. I love the way you're customizing yourself in order to really cater to the Japanese market and consumers.

Travin: Yeah.

Ayaka: So you have been active in the Japanese market for about 2 years now. By now you must be getting a sense of how the market responds to you and resonates with you. Could you tell us about your business performance at this time and about your future outlook?

Travin: Yeah, I think so far, we have already collaborated with quite a number of big companies, like Japan Agriculture Group, Itochu, Kokubu, even a few hotels like Aman Tokyo is one of them as well. We just launched CROP in 82 Natural Lawsons locations in Tokyo and yeah, I think all-in-all, it's been good. Of course, it can definitely be much better but aside from just entering and working with big players, we've also been looking at different prefectures as I mentioned previously, working with different government organizations also, so we have started even a Kitakyushu project where we up-cycle tomatoes from Kyushu into beer. And yeah so, so far so good, there's still so much more for us to do, a lot more to achieve and I think 2023 would probably be a really good growth year for us but we have to solve quite a number of other small nitty-gritty stuff probably in the next one to three more months. And we definitely do make beverages, the whole world knows what we do, but aside from that, when you make beer, you have the by-products of beer and it's called spent grain. And right now, in Japan, we have even worked with I think about 5 or 6 different contract manufacturers, and they all have their own spent grain.

Ayaka: Right.

Travin: So what we have done is, we have done some early stage R&D (Research & Development) to actually convert our spent grain into a pancake mix, for example. So that could potentially be another part of the business that we want to enter. But the next 1 to 2 years in both Singapore and Japan, the beverage business will be the main focus.

Ayaka: Fantastic. You got the specific plan already and really excited to see what happens next.

Travin: Yeah, me too, because even I have no idea.

Ayaka: Finally, do you have any message and advice for other global companies considering to enter into the Japanese market?

Travin: So for me personally, when we were entering the Japanese market, we actually got a lot of help from JETRO. You know so they actually matched us up with different businesses, mentors, partners, etc. Setting any companies entering into Japan can always look to JETRO for some additional help.

Ayaka: Right.

Travin: Especially for market entry. And you know some of the advantages of the Japanese market is that first and foremost, it's a really big market. And secondly, it's really high in quality control. So if you can do well here in Japan, then you can probably do well in most parts outside of Japan.

Ayaka: Well that's great advice.

Travin: Thank you.

Ayaka: So that takes us to the end of the show. Thank you so much for joining us today, Travin.

Travin: Yeah, thanks for having me and it's truly an honor and I think lastly, thanks for the opportunity to share more about CRUST Japan.

Narrator: Crust Japan creates delicious solutions to the problem of food loss and waste. What did you think of the story of its entry into Japan?

We hope today’s episode provided you with some inspiration on how to seize the business opportunities available in Japan.

To learn more detailed information on entering the Japanese market or collaborating with Japanese companies, be sure to visit the JETRO website and our social media pages on Facebook, LinkedIn, and Twitter.

In future installments of Doing Good, Doing Well, we’ll continue to bring you interviews with key people in a wide variety of companies. Thank you for listening and see you in our next episode!

Narrator: Doing Good, Doing Well is a series of podcasts from the Japan External Trade Organization or JETRO, targeting businesspeople interested in investing in or considering expanding into Japan. JETRO is a governmental organization promoting investment in Japan and business partnerships between Japan and the world.

Today’s society confronts a wide range of problems, including climate change, energy issues and aging populations. Companies and organizations around the world are tackling fresh challenges in an effort to solve these problems.

In this series, we bring you interviews with forerunners at foreign-affiliated companies that have established bases in Japan and are working on solutions.

Today’s theme is Unleashing the Potential of Women in Japan.

A foundation from the United States has arrived, offering programs to foster women leaders in Japan.

What challenge is Fish Family Foundation tackling to create a better future? Let’s find out.

Ayaka Kadotani: Hello, everyone. I'm your navigator Ayaka Kadotani. Today we’re talking to Ms. Kozue Sawame, Director of Japan Program at the Fish Family Foundation. The Boston-based foundation established a representative office in Tokyo in 2019. We’ll talk about a wide range of topics related to the establishment of a base of operations in Japan. Very nice to meet you, Kozue.

Kozue Sawame: Nice to meet you, Ayaka.

Ayaka: I understand that the Fish Family Foundation trains and supports Japanese women in active leadership roles. To start off, would you tell us how it all started?

Kozue: The Fish Family Foundation is a Boston-based private foundation. Through philanthropy, we support undocumented immigrants in Boston and women leaders in Japan. I'm in charge of the foundation's Japan program called the JWLI, the Japanese Women's Leadership Initiative which started back in 2006. Since then, we have focused on women non-profit executives, social entrepreneurs and expanded by launching three other programs, the Champion of Change Japan Award in 2017, JWLI Bootcamp in 2019 and JWLI Scholarship in 2021. Our alumni community now includes 150 women leaders who graduated our programs so far. Here is how it all started. Our founder, Atsuko Fish left Japan in 1980, 42 years ago. Fast forward into 2005, Atsuko returned to Japan accompanying her friend who was giving a talk in Tokyo. Her friend was the president of a global public health organization, and the talk was about women's issues and challenges in Asian countries, for instance, girl's education, reproductive health and access to contraceptives in developing countries in Asia. During the Q&A many many women in the audience raised their hands, which I understand is very rare in Japan and asked the same question, "What about women in Japan? Is there anything you can do for us?" So that's when our founder Atsuko Fish came to the realization that nothing has changed for women in Japan since she had left the country in 1980. As soon as Atsuko returned to Boston, she and two other friends sat down and came up with the concept of JWLI.

Ayaka: I see. Wow, that's quite a story.

Kozue: It is.

Ayaka: So one of the pillars of your work is the JWLI, Japanese Women’s Leadership Initiative program. What do participants learn in this program?

Kozue: What do they learn? That's an important question. So the JWLI is our flagship program started back in 2006. It’s a two year women's leadership program for women non-profit executives and women entrepreneurs for social change in Japan. At the beginning of the two years, four fellows stay in Boston for four weeks, a month. This four-week training is the core of JWLI. And through the four weeks, the fellows gain confidence to lead, acquire knowledge and experience to manage and develop their action plan for social change. In Boston, they visit non-profits and social entrepreneurs to learn best practices. We also partner with Babson College, the college in Boston that has ranked number one in the study of entrepreneurship among all colleges and universities in the US.

Ayaka: Oh wow.

Kozue: Our fellows participate in Babson's program, a very prestigious five-day women's leadership program and on top of these, the fellows develop their action plan to present twice in Boston and to be executed in Japan with a mentor. So as I said, the four weeks in Boston are the core of the program and we create this world, almost like a cocoon away from their daily lives, responsibilities and expectations. So this is the world where they can focus on only themselves and what they want to do. So the fellows spend these 4 weeks constantly asking themselves what it is that they want to do, what their contribution to society is and what their callings maybe. So these four weeks are crucial as these women leaders never ever have a moment like this.

Ayaka: Right.

Kozue: And through the four weeks, JWLI becomes their source of confidence. I want the fellows to think like this: "Because I survived Boston, I can do anything, and I can overcome any challenge after this." So when I think about JWLI, I think about how my parents taught me how to ski. On my very first skies at my feet, they brought me to the top of a mountain and pushed me. They literally pushed me from the top of a mountain, I fell and I rolled but I managed to bring myself down to the bottom of the mountain and I was a bit less scared and more confident. That's what we're trying to do. JWLI may be a hard, long, tough program but we believe if you survived this program, you can and will survive any challenge after that. You may fall and roll like I did, but it’s okay. It's okay to fall but it’s not okay not to try. We talk a lot about failure so that we can build a strong immune system against it. Failure is okay and it’s good because it’s a chance to learn and grow.

Ayaka: Right. Well it's kind of interesting that how you compare it to survival. It sounds like a really tough program, but I'm really interested.

Kozue: Good. I'm glad.

Ayaka: Yeah, so how would you compare the strengths and characteristics of the JWLI program with the efforts of other companies, organizations and so on?

Kozue: I think about two of our strengths for this question: our philosophy and our alumni community. Our philosophy is open, positive, and inclusive, and our alumni community is based on this philosophy. With four programs graduating about 30 women leaders every year, our alumni community grew to include 150 graduates. These 150 women are mainly non-profit executives and social entrepreneurs but also some from the private and government sectors as well. So it's an extremely diverse group of women ranging from 30 to 80 years old.

Ayaka: Wow.

Kozue: Located all over Japan from Hokkaido all the way to Okinawa. And we now call this community the JWLI Ecosystem because it's much more than a community. It's an ecosystem with highly engaged members sharing their ideas, exchanging resources and collaboration. With our philosophy of open, positive, inclusive, this ecosystem is exactly that. With a lifelong connection and where these women leaders feel safe and support. And we do this for these women leaders, and we invest so much in them, financially and non-financially, and with our founders of the foundation being a banker for his entire career, we also ask for return of our investment as well. Our philosophy of our foundation is that in any situation in any circumstances, even for philanthropic reasons, we should ask and expect for return of investment. And when it comes to JWLI, and for these women leaders, what we expect as our return of investment is social change. These women are working, addressing issues most oppressing in their communities and to help solve these issues is their social change. So what we ask and expect as our return of investment is social change led by these women leaders all over Japan.

Ayaka: Wow, that's so impressive and you're so purpose-driven. I love it.

Kozue: Great.

Ayaka: How would you describe the environment for women in the Japanese society today?

Kozue: That's a very good question and it’s a hard one. We have come a long way. In 2005 when our founder Atsuko Fish first approached a number of organizations in Japan with a concept of JWLI for partnership, she was stared at like she had three heads. No one paid attention to women's empowerment, and women's leadership back then. But look at me now. I'm sitting here, being interviewed by JETRO. And also, Atsuko and our program were featured on one of the largest newspapers on their front page a few months ago. Internally looking at the progress within the country, we have come a long way. But there is still much to be done. And Japan's progress is slow, I think. We're severely afraid of failure and we're reluctant to do anything new. As a society, not just for only women, but also men and others like those with disabilities, immigrants and refugees and LGBTQ individuals, Japan's society needs to be more open and inclusive. And the flip side of high fear for failure and low representation by women means that this is an opportunity for women, but also for others as well. But especially women must act and try. Women must act and try. Women in Japan are highly educated and talented and they must unleash their potentials. What's worst is not to try at all. You will never ever know until you try. And remember, failure is good and it is a chance to learn and grow.

Ayaka: I totally agree. So tell us about some of the positive impacts there will be for the Japanese society when more women become active leaders?

Kozue: One of the positive impacts, I think, is diversity. And I think the country needs it desperately. Any country, any company, any organization that lacks diversity will be stale in its thinking and imagination. They will eventually stagger in its motion and activity. Diversity is the key to Japan. And I don't mean it just women, but also including others like those with disabilities, immigrants and refugees and LGBTQ individuals and so on. And also, Japan is facing a labor shortage. So why not tap into women? Like I said before, women in Japan are highly educated and talented and experienced. So why not use their talents instead of wasting them? So I think these are the positive impacts that women leaders and women can bring into Japan.

Ayaka: That is so true, absolutely. So you’ve been operating out of your foundation’s headquarters in Boston since 2006. What led to your decision to establish a representative office in Tokyo in 2019?

Kozue: So I'm excited to talk about this because JWLI has been expanding significantly in the last several years, starting with CCJA (Champions of Change Japan Award) in 2017 and the JWLI Bootcamp in 2019. With the JWLI program held in Boston in English, we've been asked so many times for the last several years for a program to be held in Japan in Japanese. Also, as JWLI expanded, our alumni community grew, and our presence increased as well. So we needed a permanent presence in Japan instead of our founder and myself flying to Japan a few times a year for short stays. We wanted to seize the opportunity and leverage the momentum. So we now have an amazing representative, Yuki Kusano, based in Tokyo, and our alumni community's more engaged, thanks to her. And JF’s CCJA is celebrating its 6th year this year, and after two years of hiatus, we've finally brought the JWLI Bootcamp back this year in person, so I cannot be happier that we opened the Tokyo office.

Ayaka: That's fantastic. Congratulations.

Kozue: Thank you.

Ayaka: So what challenges did you face in setting up your base of operations in Japan?

Kozue: Good question. I've been in the US for the last 18 years and I'm pretty much American at this point. And I'm completely lost when it comes to Japanese business customs or tax law or labor law, so it was extremely challenging to open an office all the way from Boston without anyone on the ground in Japan. It was just pretty much myself. But that's where JETRO came in. Thankfully for me, I was introduced to a JETRO representative in New York, who then connected me to JETRO Japan. Their support was invaluable. Without it, I don't think I was able to open an office so quickly in several months. JETRO has a wide range of resources and connections in Japan and that's what we got for free. Everything was free, from multiple consultations with experts like an accountant and labor lawyer, introduction to banks to open bank accounts which can be impossible for anyone outside Japan and also office space. We received all of these help for free. And these introductions by JETRO to experts and banks were crucial and those opened a lot of doors for me and for us. What I want to thank most is also the support I received from my point person. I actually had two of them, and both of them were culturally sensitive, knowledgeable, flexible and accommodating and most importantly, reliable.

Ayaka: Wow, that's so impressive.

Kozue: Yeah.

Ayaka: JETRO is your life-saver.

Kozue: Exactly, we got very lucky.

Ayaka: Yeah. So it is now three years since you established your Japanese base. How has female leader's position changed in Japanese society during that time?

Kozue: I continue to be hopeful for the advancement of women leaders in Japan. The past 3 years have been tough for women in the pandemic. For instance, many women leaders in our community are non-profit executives and social entrepreneurs, and in the wake of Covid, many issues have become more evident. Like single mother's poverty, food insecurity and social isolation among the elderly. And our community members, women leaders were addressing those. And as a testament, CCJA, one of our programs has received 203 applications last year, which was the record-breaking number. And I think that this means more needs for women leaders. We also started the JWLI Scholarship last year, a program that offers full tuition and live-in stipend for Japan based immigrants and refugee women for equal access to higher education. This is an encouraging sign of Japan becoming more diverse. These are amazing young women, they are fluent in Japanese, academically and creatively talented and most importantly, multi-lingual and multi-cultural. Another area that we focus on is women's leadership in rural Japan. I myself was born and raised in a small town in Hokkaido, so I know how difficult and isolating and frustrating at times it can be as women. Women are pillars in our community in rural Japan and their strong leadership is crucial. Our JWLI Bootcamp is a 3-day training for women leaders in rural Japan and instills the essence of our Boston training in 3 short days in Japanese in Japan. We have done 4 Bootcamps so far in Nagoya, Ishinomaki, Osaka and Tokushima and for each location, we've received 20 to 30 applications for 10 seats. As I said about CCJA, women leaders are in all over Japan from Hokkaido to Ishigaki and they are making a difference. So like I said before, there’s so much to be done and the progress is frustratingly slow. But I continue to be hopeful for women’s leadership in Japan.

Ayaka: But that’s so impressive and it seems like the future is bright for us.

Kozue: I hope so. Keeping fingers crossed.

Ayaka: Yeah. Finally, can you share any advice for female leaders overseas who are considering setting up their business in Japan?

Kozue: Yes, of course. As you know, Japan is an amazing country with so much potential. As much as I focus on women in Japan, I want you, yes, I’m talking to you, women outside Japan. I want you to enter Japan with your businesses and organizations and get help from JETRO. They are the best. You will be role models for Japanese women, break gender-based barriers and preconceptions and most importantly, you are the very diversity the country needs.

Ayaka: Exactly. Thank you so much Kozue. That's been so inspiring.

Kozue: Thank you, Ayaka and thank you JETRO for the opportunity. This has been amazing for me as well.

Narrator: The Fish Family Foundation broadens horizons for Japanese women. What did you think of the story of its entry into Japan?

We hope today’s episode provided you with some inspiration on how to seize the business opportunities available in Japan.

To learn more detailed information on entering the Japanese market or collaborating with Japanese companies, be sure to visit the JETRO website and our social media pages on Facebook, LinkedIn, and Twitter.

In future installments of Doing Good, Doing Well, we’ll continue to bring you interviews with key people in a wide variety of companies. Thank you for listening and see you in our next episode!

Narrator: Doing Good, Doing Well is a series of podcasts from the Japan External Trade Organization or JETRO, targeting businesspeople interested in investing in or considering expanding into Japan. JETRO is a governmental organization promoting investment in Japan and business partnerships between Japan and the world.

Today’s society confronts a wide range of problems, including climate change, energy issues and aging populations. Companies and organizations around the world are tackling fresh challenges in an effort to solve these problems.

In this series, we bring you interviews with forerunners at foreign-affiliated companies that have established bases in Japan and are working on solutions.

Today’s theme is Bringing smiles to logistics businesses.

A startup company has arrived from the United States, determined to advance Digital Transformation in the transportation industry.

What challenge is Wise Systems Japan tackling to create a better future? Let’s find out.

Ayaka Kadotani: Hello, everyone! I'm your navigator, Ayaka Kadotani. Today, I have the pleasure of speaking with Keiichiro Araihara, Country Manager for Wise Systems Japan, which was founded in January 2021. We’re going to talk about how Wise Systems is revolutionizing the shipping industry and how it entered the Japanese market. Thank you for joining us, Kei.

Keiichiro Araihara: Nice to meet you.

Ayaka: So, first, can you quickly talk about what Wise Systems’ business is all about? Please describe your operations and corporate philosophy.

Keiichiro: Wise Systems, which spun out of MIT (Massachusetts Institute of Technology) Media Lab in 2014, was founded with the purpose of using data to transform the distribution of goods and services. As the volume of deliveries explodes with the impact of the COVID-19 pandemic and the expansion of online shopping, the delivery experience until the arrival of goods is becoming very important. In the U.S., where our headquarters is located, packages frequently fail to arrive on schedule, but people used to live with that. In recent years, however, that perception has been changing dramatically, and customers are demanding increasingly higher quality from deliveries. Under these circumstances, the transportation industry is facing various problems, such as manual delivery routing, shortage of drivers, and the time required for new drivers to get accustomed to delivery routes. Wise Systems is a delivery route automation solution that uses AI technology to create optimal delivery plans and capture real-time situations.

Ayaka: Right. That was quite a comprehensive description of your company. Thank you for introducing. Now, let's dive a bit deeper. What does Wise Systems offer that we don’t see in other companies?

Keiichiro: For the transportation industry, the most important thing when delivering packages to customers is which route is most efficient and ensures reliable delivery. The delivery time consists of two main parts: first is the driving time to the customer's place, and the second is the time to park the car, take out the package and bring it to the customer. Wise Systems focuses on the delivery process’s second "non-driving" part. For example, the driver must wait for another truck in front of the line to finish unloading, or the cargo volume is large and takes time to complete the delivery. These processes could take up to 30 minutes or an hour. Our system learns what happened after the car was parked, how long it took, the impact of the number and size of packages, and many other factors. It allows us to improve the accuracy of the following delivery and reasonably design the driver's daily schedule. That is our strength.

Ayaka: That sounds like a pretty innovating solution, and thank you for sharing so many of the behind-the-scenes efforts. So, what sorts of social issues related to the transportation industry can we solve by introducing Wise Systems solutions?

Keiichiro: The transportation industry is facing operational efficiency issues due to driver shortages, deteriorating working conditions for the driver, increasing vehicle mileage and CO2 emissions, and delays in digital transformation. We are also facing the last one-mile delivery issue. First of all, not so many people want to become a driver. In this regard, most drivers are male in their 40s to 60s or older. And there is a concern about a future shortage of human resources if the older people retire without young professionals in their 20s to replace them. If the current situation continues, this generation gap will make it difficult to pass on the know-how and skills of delivery to the youth. Assuming that the number of young or female drivers will increase in the future, it is necessary to create a system to familiarize them with the delivery business. Wise Systems' solutions, which one can use with a web browser and a smartphone, can help not only drivers new to the transportation industry, but also dispatchers and operation managers overcome the various barriers they face.

Ayaka: Right. It's pretty interesting how you're going to solve the human resources issues that currently exist in the transportation industry. Would you tell us a bit more about some of the other issues that you have right now, such as the CO2 reduction and digital transformation?

Keiichiro: Administrators spend a lot of time, such as manually preparing transportation plans and responding to unexpected incidents on site. Before, telephone calls were the only way to obtain real-time information on the driver’s location, how many deliveries had been completed and how many more to go, and what the driver would do next. Digitalization enables this information to be managed centrally on a computer, significantly improving business efficiency. Also, repeated re-delivery leads to higher vehicle fuel consumption, which increases costs. At the same time, there is an urgent need to reduce CO2 emissions. Of course, reducing travel distance during delivery can decrease vehicle fuel consumption and thus contribute to cutting CO2 emissions. As an example, with our system, our U.S. customer has reduced delivery delays by 80% and travel distance by 15%, thus decreasing CO2 emissions. We have also seen cases such as a 20% improvement in truck usage efficiency.

Ayaka: Wow, I'm so impressed. It seems like you can actually solve a lot of issues that we have currently in the society, if you use the service. It's amazing. Thank you for sharing that. Now, I was also wondering why Wide Systems decided to enter the Japanese market in 2021. What were some of the reasons that led to that decision?

Keiichiro: When considering business expansion in the world, including Asia, the U.S. headquarters thought of growth and success in Japan as a significant milestone to achieve. The company chose Japan as a destination because of the high-quality standards and sensitivity required for products and services in Japan, which would provide an opportunity for further refinement and growth of our services. Another key factor was our decision to partner with Mitsubishi Fuso Truck and Bus Corporation, which is part of Daimler Trucks. Currently, Mitsubishi Fuso Truck and Bus is in charge of our marketing and sales activities in Japan, as well as the initial stages of customer support.

Ayaka: I see, so you took business in Japan as an opportunity for growth. That's pretty interesting. Thank you. Now, I 'd like to ask you about you personally. What events led to your involvement in Wise Systems’ entry into Japan?

Keiichiro: Delivery drivers who delivered my online purchases to my home always looked as if they were tired and somehow pressed for time. I was interested in Wise Systems because I felt that their system could change drivers’ working environment and make them work with a smile. Wise Systems is a "doctor for people in the transportation industry." We want to know what your problems are, what we can do to solve them, and what we can do to help you regain your health. We want everyone to enjoy working with smiling faces. It will also allow companies to make profits without strain and use them for investment in new things. The transportation industry is the backbone of Japanese business. If it can become healthy and competitive, not only companies but also Japan's entire society will be able to move forward in a sustainable direction.

Ayaka: Yes, definitely, sustainability is one thing we all need think about right now. But I really love how much you value making people happy. So, thank you for sharing that. Now, what were some of the challenges that you faced when establishing the base of operations in Japan?

Keiichiro: I could say that everything was a challenge. For example, when you try to open an account with a Japanese bank, the bank will spend a lot of time examining how to evaluate your company. Furthermore, a company cannot be run by salespeople and engineers alone; there are many less visible things, such as social insurance and bookkeeping. It took us many work hours just to figure out what needed to be done, including the differences between Japan and the United States, and to deal with them. Nevertheless, when I was appointed the representative of the Japanese subsidiary, corporate registration, opening a bank account and other things had already been completed together with a labor and social security attorney. I believe this is a testament to the great service and support we received from JETRO's incorporation consulting service. Now, in addition to myself, we have more engineers, but hiring them was not without difficulties. From the applicant’s perspective, they would think twice before applying for a position at a newly established company in Japan that had only begun to build a business track record. However, if you look at this situation and think that "I am going to create the structure and achievements from scratch," it may have been the best environment for you.

Ayaka: Right. It seems like you're really welcoming all the challenges and you're enjoying yourselves. Pretty exciting, thank you. Now it’s been about a year and a half since you set up your shop here. What kinds of responses and reactions have you had in developing Wise Systems in Japan? And what have you noticed in particular?

Keiichiro: There is still room for innovation in the Japanese transportation industry by promoting digitalization. Many people are already using computers, but only for creating documents in Excel, and they are facing challenges, especially in terms of improving the dispatchers’ efficiency of delivery route planning. With its ability to manage everything digitally and centrally, Wise Systems could solve this problem. Still, people who introduce the system are concerned about whether they will be able to handle it themselves. For these reasons, our business has yet to be smooth sailing. We need to be patient now. The key to success in Japan will be whether we can attract customers who feel digitalization is necessary and convert them to adopt the Wise Systems. From the standpoint of CSR (Corporate Social Responsibility), companies that use vehicles need to take measures against global warming, such as considering the introduction of EVs and introducing systems to improve the efficiency of vehicle use. To this end, we would like to promote our systems in cooperation with Mitsubishi Fuso Truck and Bus Corporation.

Ayaka: Right. Fantastic. Do you have any other commitments for the future?

Keiichiro: Software localization is also important. If you just bring the software from abroad as it is, it will not likely work. We need to consider not only Japanese language translation but also the road conditions unique to Japan. For example, in Japan, people drive in the left lane, but in other countries such as the U.S., they usually drive in the right lane. In Japan, we want to avoid making trucks turn right because of the increased waiting time at traffic lights and the risk of hitting pedestrians. In Europe and the U.S., this is exactly the opposite. Moreover, a unique delivery method, such as reloading cargo before heading for the next delivery, is standard in Japan. There are also other differences in the width of the road and vehicle. It is necessary to understand these differences in planning the delivery route.

Ayaka: Right. Of course. In any situation, I guess, you need to really think about the differences of culture and traditions. It's great that you're already working on it. So, finally, do you have any advice for other companies who are considering to expand their businesses in Japan?

Keiichiro: First of all, it is better to understand the differences in market conditions, commercial trends, and customers’ ways of thinking. For this purpose, finding a business partner, such as Mitsubishi Fuso Truck and Bus Corporation for us, who can serve as a good advisor is crucial. It is important to talk openly with an organization like JETRO, which has a network and support function. We were fortunate to have a business partner, Mitsubishi Fuso Truck and Bus Corporation. We feel very privileged to be able to combine our technology with their knowledge of the automotive industry.

Ayaka: Great advice. So, understand the market and have great business partners, and just generally, someone to talk to. Great advice, thank you. All right, so, that takes us to the end of the show. Thank you for joining us today, Kei.

Keiichiro: Thank you very much.

Narrator: Wise Systems Japan is brightening the future of the transportation industry. What did you think of the story of its entry into Japan?

We hope today’s episode provided you with some inspiration on how to seize the business opportunities available in Japan.

To learn more detailed information on entering the Japanese market or collaborating with Japanese companies, be sure to visit the JETRO website and our social media pages on Facebook, LinkedIn, and Twitter.

In future installments of Doing Good, Doing Well, we’ll continue to bring you interviews with key people in a wide variety of companies. Thank you for listening and see you in our next episode!