Facing the Pandemic, a Big Restaurant Group Aims Small
Updated: Dec 31, 2022
Nishi-Ogikubo is known for independent restaurants. However, corporate-owned restaurants are increasing in the neighborhood. On March 31, 2021, amidst the corona pandemic, a small oyster bar with harbor-town decor opened in a busy alleyway South of the Station. Called "Oyster Bar & Tempura Nishi-Ogikubo Wharf," raw oysters and white wines are mainstays. Cozy outdoor table and bar seating appeal to the bar-hopping Nishiogi clientele, while the nautical décor adds a seashore vibe that is rather novel in this urban village. Behind this well-designed venture is a large gastro corporation based in Osaka, Operation Factory, which operates restaurants primarily in central urban districts in Japan.
Our question was why this large-scale F&B company decided to move to a peripheral urban market such as Nishiogi during a period in which restaurants around the world were struggling to survive. We interviewed Kasatani Kouta, the manager of the Nishi-Ogikubo Wharf.
Kasatani is soft-spoken with a Kansai accent. "Originally, we were a company that preferred to open restaurants in the city center, in major cities,” he explained. “But recently with the COVID situation, the city center is subject to stricter regulations, and for businesses, the limitations on business hours were strict. The requests [advisory policy directives from the government] were very strict.... Naturally, the flow of customers was also affected..."
The first oyster bar opened by Operation Factory was the Shinjuku Oyster Bar Wharf located at the South Exit of Shinjuku Station in the busy long-distance bus terminal. However, with the spread of COVID and the transition to telework and distance learning, traffic in this usually busy entertainment, office, and education district plummeted. The Bus Terminal, where Shinjuku Wharf was located, also faced restricted hours of operation and a great decline in traffic. At this point, the company began looking for a new strategy to survive the pandemic. “When we researched places in areas where there still were many people eating and drinking,” Kasatani said, “we realized Nishi-Ogikubo has great power as a locality. And, of course, the rent was cheaper than in the city center. So Nishiogi was a challenge, and it represented a shift in corporate strategy.”
The strategy was based on the idea that even though people were working from home, they still would be eating out in neighborhoods near where they lived. Other promising neighborhoods the company looked into were Noge in Yokohama, and several along the Chuo Line: Koenji, Asagaya, and Nakano. We asked why they chose Nishiogi out of all of these. A key factor was that families lived nearby. On weekdays, the customer base is a bit younger than Shinjuku, he said. but on the weekends, it widens considerably, and they see growth potential. “Of course, Koenji and Asagaya also have bars,” he said. “But Nishiogi was more attractive… There were more people out when I was researching.”
In Koenji, he said, the customers were too young, and they felt that it would be difficult to market a restaurant that sells expensive items like oysters. “At that time, the fact that there was no oyster bar in Nishi-Ogikubo in the same business format was probably the deciding factor. Actually, it doesn't exist anymore, but I heard that there was an all-you-can-eat oysters shop on the street two years before we opened."
In general, the principle in entering Nishi-Ogikubo was to go a bit down-market from the restaurants in Shinjuku that serve young office workers in that area. Along with the oyster bar, Operation Factory also opened another restaurant just a few meters away on the same busy alley. This is the Taiwanese dumpling shop Nishi-Ogikubo Choki (Zhang Ji), which is based on a famous restaurant in Taipei’s busy Ximending neighborhood. “Gyoza is a challenge,” Kasatani admitted, “but I think we approached the gyoza from a different angle, such as a new Taiwanese long gyoza…. As I mentioned earlier, Choki is our first restaurant that was not in the city center. Then, we wanted to challenge ourselves with a casual version of the Wharf in Shinjuku, and that's how we started Nishi-Ogikubo Wharf."
Kasatani himself worked as a store manager at Wharf in Shinjuku for three years. When opening a new outlet, most additional staff was newly hired, and only a few were brought over from the company. There was also a two-month training period. At the Shinjuku branch of the parent oyster bar, Kasatani was asked to acquire knowledge of oysters and store operations and was working to open in perfect condition at the end of March 2021. However, soon after, the Tokyo Municipal Government implemented intensive measures to prevent the spread of the virus from April 12, 2021, to April 24, 2021, and from June 21, 2021, to July 10, 2021. Tokyo Municipal regulations were only recommendations, sweetened by subsidies for those who followed them. For newly opened businesses, however, the subsidies were often not available. Wharf did close for about two months in the Spring. However, in June they decided to open for full business, a time during which many other neighboring restaurants were observing an 8 pm closure recommendation from the city government. For a few weeks, Wharf was the only late-night drinking spot on the street.
Originally from Osaka, Kasatani has been working at this company for fifteen years, eventually moving from Osaka to Tokyo. “Before I was able to do this, I worked in Shinjuku for about four years,” he said. “Before that, I opened a sushi izakaya in Harajuku, which is gone now.”
The Shinjuku Wharf is quite luxurious in comparison to the design in Nishi-Ogikubo. It is located in JR shopping center aimed at urban professionals and called “New Woman” The front is all glass and passersby can peer inside from the street, conveying a welcoming and stylish image. Shinjuku Wharf and Nishi-Ogikubo Wharf are both based on a concept developed by Operation Factory for Singapore. The first “Wharf” was in Singapore on Robertson Quay, a central waterfront entertainment district along the upper reaches of the Singapore River. “It had about 100 seats. It was a large restaurant, but with the situation in Singapore, it gradually became difficult to continue. We, therefore, brought it to Japan as a reverse import. The first store was Shinjuku Wharf, conceived as an open stand facing the sea. It's the same here, and the interior has the sea as an element."
The company Operation Factory takes a collective approach to create new restaurants. "The planning involved the president, other executives, someone who plays a role like an area manager, and then me, the local restaurant manager. We think about what kind of concept would be good for customers, and then come up with a plan. Since we start based on what kind of store and what kind of staff would be good, it is not a top-down approach, and I think the company's characteristic is to create a store based on the voices of the people on the ground.”
The interior of the store will be created together with an external design company. The person in charge of the restaurant and the design company, and when they have a rough draft, we bring it back to the company, report on the progress, have the design rough seen by the upper management of the company, and get their opinions. “They start from the framework of the restaurant, rather than just focusing on the local site.''
There is still a lot of work left for the store manager, Kasatani pointed out. Once a business starts, it must monitor the situation and make course corrections. Minor changes in the localization strategy are left up to the restaurant manager, but big changes require consultation with the company managers. After a year passed, there were quite a few details that had been adjusted. “There are a lot of them,” he said. “Raw oysters are the number one selling point, and we plan to continue doing so in the future. Tempura was the subtheme, and to be honest, that has been decreasing a bit. Of course, it's still recommended. Recently, kamameshi has been introduced, and this summer, hamayaki (beach-style grilled seafood) has been introduced. I'm trying various things. I haven't decided yet, but next time I'll use sea bream...Oysters and sea bream. I'll try using pairing sea bream with different things. Changing the oysters would make me quite uneasy, so I will leave it be…., I just try to challenge myself while paying attention to the customer reactions.”
Oysters are the main sale items. Since oysters are raw and need to be sold while they are still fresh, we asked him how he managed to avoid loss. "It's difficult, isn't it?” Kasatani said. “It would be nice if we could order according to the current sales trends and sell out every day, but sometimes that doesn't work. Sales are very good in Shinjuku, and the turnover rate of raw oysters is very high. There are times when I get a share of the oysters I ordered from there, or when I say that there are going to be some remaining here, so I bring them to Shinjuku. Of course. It's not like there's zero loss, but I think it's one of the strengths of our affiliated stores that we're able to reduce it as much as possible while maintaining that balance.”
As an oyster bar, Wharf sources unique oysters from all over Japan. In some cases, the store manager himself visits the producers and decides on the suppliers for the products. “Of course, there are companies in Tokyo that source oysters from various oyster producers, inspect them for sanitation, and sell them to restaurants,” Kasatani said. “But for us, oysters are our main business. So, starting with the Shinjuku branch, we felt it is important to connect with the local producers. I go to the producers in Fukuoka, talk to them, taste oysters, and make a contract. You can sense the passion of the producers... In this kind of internet society, oysters can be delivered by pressing a button.”
The personal touch helps as well as the internet, which allows direct sales from producers. Oysters are then sent directly from producers. “We aim to supply customers with items that have been raised by passionate producers who we can trust. I hear from producers that for them their oysters are like their children. They are not children of course, but you don’t want to marry your child off to some strange guy. To hear such things, we do need to do these local visits. We haven't been able to go to all the suppliers we currently serve, but we have been able to get to more than half of them, including in Hokkaido, Fukuoka, and many other places."
Tasting the oysters personally is key to purchasing, Kasatani said. He didn't eat many oysters before he took charge of the oyster bar. However, when it comes to being in charge, you can't sell a product if you don't know it. “Of course, if I like this oyster, I will talk about it, but if there are customers who like really big and sweet oysters, I will recommend that. On the other hand, some people say they don't like big oysters and prefer small and light oysters.”
Purchasing is done in loose cooperation with the store manager, the chef, and the Shinjuku store manager. while consulting with the area manager of the cooking department. Oysters are sometimes procured together with the Shinjuku store. To make the most of economies of scale, they also order the oysters together and distribute them between the two stores. “However, there are times when we are doing something completely different, and there are times when we work together due to contractual issues."
We ordered an assortment of raw oysters from four production areas that Kasatani and his colleagues had visited, tasting them in order from the light taste to the rich taste recommended by the store. Even the same oysters have different tastes depending on where they are produced. The lineup from light to heavy is decided by Kasatani together with the head chef of the branch. Of course, there are also risks with raw oysters, but they try to minimize these through speedy turnover and reliable suppliers.
Since this is an oyster bar, sparkling wine that goes well with raw oysters is the most popular drink. However, perhaps because of the local drinking culture of Nishiogi, lemon sours and highballs are often sold here. “I think it depends on the locality,” Kasatani said. “Speaking of Shinjuku, sparkling wine is overwhelmingly popular. I think there is also a way to use it.
Corporate purchases help with wines, including some at a very reasonable price of 2500 yen a bottle. For sparkling wine, they serve a Spanish cava called Castello Roc, a Spanish cava, which according to the Spanish producer himself is perfect for oysters. They directly import from the Spanish vineyard, and the name Operation Factory is also on the bottle. The owner of the vineyard visited the Shinjuku branch and gave a lecture about the product. It is sold at all the branches. Other wines are purchased from other suppliers. They are also trying to develop direct connections with other producers including farmers.
Being part of a larger group also has some flexibility in terms of staffing. Gyoza no Choki is right next to Nishiogi Wharf, so we asked if there was a sharing of labor between affiliated stores. "Basically, we don't have any [formal arrangements],” Kasatani said, “but if someone asks for help because we don't have enough people for Golden Week in our company's circulation board or on the Internet circulation board, or if there's room for shifts here. There is no such thing as a joint or a linked shift, but there are such adjustments within the company.”
Finally, we asked about Kasatani’s personal experience working in the food and beverage industry. "For me, it's been fifteen years since I joined the company as a new graduate,” he said. “The food service business did not have a good image then. Well, restaurants aren't like that now, but at the time, the turnover rate was very high. Well, and the level of pay didn't have a good reputation, but our company wanted to change the public's impression of it, so it is very well organized...” His work hours are reasonable for this industry, he said. “The average day is less than nine hours. However, there are times when I go to work in the morning and leave at nine.”
The case of Wharf shows how corporate restaurants are gradually gaining a foothold in Nishi-Ogikubo, a neighborhood with a reputation for independent businesses. Factors of scale clearly play a role. Also, COVID acted as a push factor making entry into a residential area more attractive. It remains to be seen if more corporate restaurants will be drawn to the area as its reputation grows and patterns such as telework continue in Japan. (James Farrer Dec. 28, 2022)
(Interview by James Farrer and Fumiko Kimura, May 26, 2022, transcription and Japanese editing by Fumiko Kimura, translation by James Farrer, copyright by James Farrer all rights reserved)