Investing in Japan: Kakiyasu enjoys a good reputation established for more than 140 years with its sophisticated cuisine such as Matsusaka beef

From luxurious Wagyu meat to appetizing delicatessen to Japanese confectionery with colorful appearance

Kakiyasu Honten Co., Ltd. is a food company founded in 1871 in Kuwana City, Mie Prefecture. Kakiyasu produces and sells prepared food products and is known for processing and selling Matsusaka beef, one of the most prominent brands of Japanese Wagyu Beef. Matsusaka beef is famous for its tender and heavily marbled meat. Only beef products meeting strict grading criteria can be marketed and sold as Matsusaka beef. 

Kakiyasu also developed its original brand "Kakiyasu beef" and sell the meat and processed products with that brand name at department stores nationwide. They have been very popular among Japanese consumers as a high-class ingredient. In addition, it also sells delicatessen dishes and traditional Japanese confectionery at restaurants, department stores and supermarkets. 

In particular, Kakiyasu has been well known for maintaining high level of standards of its products sold at their delicatessen by planning, developing and selling their products all at once in their facilities since the opening of the first “Kakiyasu Dining” shop in 1998. Kakiyasu Dining sells western and Chinese-style delicatessen prepared and showcased by professional cooks with seasonal ingredients. 

Kakiyasu Dining serves sophisticated food with not only incredible taste but also the appetizing and colorful appearance of the cuisine which carries a sense of the season at the time. Each Kakiyasu Dining has a kitchen so that customers can purchase freshly prepared dishes cooked by top chefs and served directly at the store. Kakiyasu has more than 100 stores nationwide. 

Kakiyasu also operates shops at shopping centers nationwide with "Koufukudo" brand for Japanese confectionery business, focusing on "Ohagi" "Dango" "Daifuku" and "Warabimochi" which have long been popular among Japanese as takeout sweets. Kakiyasu uses red beans from Hokkaido as an ingredient in Japanese sweets sold at Koufukudo. The ingredient is popular with consumers and are processed at their own factory, Kakiyasu Sweets Factory. Kakiyasu’s sweets are popular with people of all ages from children to the elderly.

The third wave of COVID 19 forced Japan to declare state of emergency again

However, Kakiyasu’s business performance in 2020 deteriorated rapidly due to the spread of the new coronavirus infection. Japan's Prime Minister has declared once again the state of emergency on January 7 for the nation's capital, Tokyo and surrounding areas as Covid-19 cases surge to the highest levels since the start of the pandemic. He has also declared a state of emergency for seven more prefectures on January 13 to curb the spread of the coronavirus. 

When the state of emergency was declared in April last year, most stores and shops have been forced to close due to the government's request to refrain from eating out to prevent the spread of the infection making Kakiyasu’s sales in the restaurant and stores heavily stagnant. Although personal consumption has been on a recovery truck after the state of emergency was once lifted in May, consumer sentiment will be stagnant and severe again in coming months. 

As for the consolidated earnings forecast for the fiscal year ending February 2021, Kakiyasu announced on January 14 that sales will be 36,800 million yen (16.2% decrease year-on-year), operating income will be 1,000 million yen (58.8% decrease). In order to overcome these adverse circumstances, the company is working to expand sales and improve operational efficiency by strengthening online sales of meat products and closing restaurants whose profitability are deteriorating. Kakiyasu had been accumulated cash before the pandemic hit Japan and its solid financial base may enable the company to streamline its business into leaner and more competitive to cope with this ordeal.