Tokyo's Catch of the Day: Flying Fish, Superior Margins (1)

(Bloomberg) -- Ryohei Nomoto wants to put fresher sashimi on your plate, and more money in the wallets of Japan’s struggling fishermen.

His venture airfreights freshly caught fish from across Japan, processes them on the grounds of Tokyo’s Haneda airport, and distributes the produce to the city’s notoriously choosy eaters and restaurants across Asia - but Nomoto’s goal isn’t just freshness.

He wants to reinvigorate a declining fisheries industry by cutting out the middleman and giving more income to the nation’s underpaid fishermen.

“We turn freshness of fish into money through speed and traceability,” said Nomoto, who runs CSN Chihou Sousei Network Co. “So much time is usually wasted getting fish to customers, which results in loss of freshness and an increase in expenses.” At Tokyo’s iconic Tsukiji market, fish caught on Monday might not be on sale until Friday, Nomoto says - he aims for same-day turnaround.

Flying Fish

Japan’s fish-loving but finicky eaters have a wealth of choices and a keen appreciation of freshness. CSN aims for “lightning fast fresh fish,” using a tie-up with ANA Holdings Inc. to fly the chilled cargo from ports around the country to the airport in Tokyo and out again.

In a pristine environment reminiscent of a semiconductor clean room, just hundreds of meters from the international terminal’s baggage claim area, workers clad in protective masks and caps scoop organs and bones out of freshly arrived fish. The processed product is vacuum sealed and shipped to restaurants and retailers by noon the same day.

Some 40 percent of the produce is sent overseas, and can be rotating on the conveyor belts of sushi restaurants in Singapore or Shanghai the same day it was caught. By eliminating fishing cooperatives that buy at a flat rate, or markets such as Tsukiji, CSN says it can pay fishermen more for their catch.

Read more: how Tokyo governor saved Tokyo’s famed fish market from the cull

The nation’s fishermen need any help they can get. Many are not far from the poverty line, with average income for coastal fishing households in 2014 at 1.99 million yen ($17,500), about half the national average of 4.15 million yen.

Makoto Higasayama, a 45-year-old fisherman in Kagoshima, southern Japan, sells fish to CSN. He works the waters of Koshikishima island and says the venture has helped boost the popularity of the island’s specialty, kibinago, a type of herring.

“It used to take more than a day to reach places beyond Kagoshima, but now we can sell kibinago anywhere in Japan on the same day as we catch them,” he says. “We’re hearing from customers that the freshness is like nothing they’ve ever tasted.” CSN has contributed to rising prices and better income stability, he says.

Fishermen Gutted

Although it has the sixth-longest coastline in the world, Japan’s population has been turning away from fishing. The number of fishermen has dropped almost by half since 1998, government statistics show.

“In order to survive, fishermen need to change their mentality and think about ways to sell at a high price,” says Kanta Kubo. After 10 years as an engineer, he joined a fishing company in Tsushima, an island in the Sea of Japan, after attending a job-matching fair for inexperienced fishermen. Now he runs the company.

The Haneda market buys at a price 1.5 to 2 times higher than the local rate, Kubo says. And customers are willing to pay for quality.

On a Friday evening at the upscale Takashimaya department store in Nihonbashi, Yusako Yoshida, a housewife in her 40s, bought a 2,500-yen ($22) platter of fish. It was caught that morning in Miyazaki and hauled 870 kilometers (541 miles) to the Tokyo Haneda Market.

“Freshness is key,” she says. “Sashimi isn’t that cheap at supermarkets anyway, so if the taste is significantly different and the freshness is outstanding, I don’t mind paying slightly more.”

CSN President Nomoto says a Ginza fish store he opened in January counts shoppers for Michelin-starred sushi restaurants among its clientele. The premium paid by those customers is crucial to restoring Japan’s struggling rural areas, he says. His company’s name - Chihou Sousei - means regional revitalization. “You can sell fresh fish locally for nothing, but people are willing to pay three to five times for freshness in big cities,” he says.

“People in rural areas send good quality products to cities, and people now living in the cities repatriate money by paying higher prices.”

To contact the reporters on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net, Komaki Ito in Tokyo at kito@bloomberg.net.

To contact the editors responsible for this story: Kazunori Takada at ktakada17@bloomberg.net, Gearoid Reidy, Colin Keatinge

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