Japan's Create group keeps up with changing palates

A Shabu Sai restaurant in Tokyo, where the traditional shabu shabu is given a contemporary touch with specially designed buffet counters equipped with mist sprays that keep vegetables looking fresh.
PHOTO: The Straits Times

Singaporeans are famously finicky when it comes to food, so being able to respond quickly to meet changing tastes can be a make-or-break proposition - just ask Japan's Create Restaurants Group.

The food and beverage chain opened its first Singapore outlet, Fisherman's Market, in a sprawling 10,000 sq ft space at Central in Clarke Quay in 2011.

But it soon became clear that the Western seafood buffet offerings didn't have the right ingredients for the local palate and it closed after just six months.

And then it got interesting. Create Restaurants wasted no time in implementing Plan B, and had a new eatery - a Japanese buffet outfit called Chiso Zanmai - up and running in the same two-storey space overlooking the Singapore River after just three weeks.

"We repainted the interior and put bonsai plants on tables for a more Japanese decor. It took only three weeks," said Mr Takakazu Tanaka, director of Create Restaurants Group's overseas business department.

Set up in 1999, the group has built an empire of 856 restaurants, cafes and foodcourts employing some 23,000 people in Japan, Singapore, Hong Kong, Taiwan and New York by being flexible enough to close flagging outlets and creative enough to constantly churn out new-look replacements.

It has shrugged off that inauspicious start in Singapore and now operates 10 restaurants here: Five shabu shabu (hotpot) eateries called Shabu Sai, three cafes under its Maccha House and PomPomPurin brands, charcoal grill restaurant Hamanoya and Japanese home-style food outlet Hifumi.

Chiso Zanmai was closed after four years when its lease ended.

Create plans to open at least 10 more outlets in the next four years, as Japanese cuisine becomes increasingly popular in Singapore, Mr Daisuke Yagi, team leader at the group's overseas business arm, told The Straits Times.

One of the additions will be Hina-Sushi, a conveyor-belt sushi restaurant that is one of the group's most successful brands in Japan.

The company also aims to create five new brands of Japanese cuisine for the Singapore market, but executives did not give more details.

"Food costs may be higher in Singapore but the business environment is stable and conducive, and prices are high enough for profitability," Mr Yagi said.

The company has adapted its menus to local tastes. At Shabu Sai's outlets here, for example, customers can choose from six types of soup, including a curry-flavoured one, compared with just four options in Japan.

"Singaporean consumers are spoilt for choice and like new ideas," Mr Tanaka told The Straits Times through an interpreter at the company's headquarters in Tokyo.

Singapore presents a good fit for Create's business model, which is centred on creating new brands tailored to the customer profile and existing competition of each location.

The company has launched 326 brands spanning Japanese, Western and Asian food, ranging from restaurants and foodcourts to cafes.

The key, said Mr Tanaka, is to provide a combination of the familiar and the novel.

For example, at Shabu Sai, traditional shabu shabu is given a contemporary touch with specially designed buffet counters equipped with mist sprays that keep vegetables looking fresh.

It also updates its menus every month for most of its brands or completely overhauls the menu once a year.

"Customers nowadays are more savvy," said Mr Tanaka. "Word gets around fast if they are not happy with a restaurant."

The Tokyo-listed company boasted sales of 103.27 billion yen (S$1.37 billion) for the year ended Feb 29, 2016, nearly double the 52.52 billion yen it reported for the year to February 2014.

For all its attention to detail, Create has had its share of misses.

About 128 brands, or 40 per cent of the 326 it has spawned, were shut down because they failed to make the grade after six months.

They include a Thai ramen brand and an eatery called Hunting Potato, which offered French fries with different flavours.

"Japanese think of French fries as a side dish, so the brand didn't last, although people thought it was novel at first," said Mr Tanaka.

Create also retreated from mainland China this year after five years in business. It ran 13 outlets in Shanghai, Chengdu, Ningbo, and even the ski resort in the Changbai Mountain region.

Mr Yagi blamed the exit on cut-throat competition and Chinese competitors who tend to bypass rules. "Prices were too low for us to make a profit," he said.

This article was first published on Oct 31, 2016.
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