The Secret Behind the Meat Grilling Boom in Japan
(Bloomberg) -- Indoor grilling isn’t a new concept, but in the pandemic era, it can make the difference between a restaurant surviving or closing its doors.
Good ventilation is turning into a secret weapon for Japan’s yakiniku, or “grilled-meat” restaurants, where customers cook raw ingredients such as cuts of beef shoulder, pork belly and vegetables at the table.
While many eateries around the globe remain shuttered or offer takeout only, Japan’s establishments have remained open because the government doesn’t have the legal means to force closures. Before the government implemented a state of emergency last month, it was even encouraging people to eat out. Even so, the island nation saw a record number of restaurant bankruptcies in 2020, according to Teikoku Databank.
Restaurants have been one of the hardest hit industries in the pandemic globally: one in six eateries in the U.S. closed last year. To combat the risks of dining out, restaurants everywhere have been forced to adapt to survive: in the U.S., many are providing outdoors-only service while some chains in China have converted to fresh-food delivery.
Japan’s yakiniku eateries, however, saw a historically low number of insolvencies last year, according to Tokyo Shoko Research. Sales actually grew in some months compared with 2019, according to the Japan Food Service Association. What makes meat-grilling restaurants resilient is the dining concept itself: aggressive ventilation sucks away smoke — and airborne pathogens — quickly. The air inside a yakiniku restaurant likely changes over six times more than in standard eateries, according to Shinpo Co., a maker of restaurant-use yakiniku grills and ventilators. It’s also a dining experience that’s harder to replicate at home.
“The outlook for yakiniku is good even after coronavirus,” said Seiichiro Samejima, an analyst at Ichiyoshi Research Institute Inc. “Globally, when lockdowns were lifted, more people were eating meat.”
Watami Co., a national operator of izakaya pub-styled restaurants, announced in October that it’s seeking to convert a third of its locations into yakiniku joints. Shares of Monogatari Corp., which runs large restaurants in Japan’s suburbs, about half of them a brand called Yakiniku King, are up about 50% since last year. Yakiniku is a broad term in Japan that also encompasses Korean barbecue establishments.
“Even after coronavirus, the yakiniku segment will continue to grow,” Hirotada Shinmachi, the executive in charge of Watami’s yakiniku operations, said in an interview. Shinmachi, who’s been at Watami for almost two decades and most recently ran its national network of izakaya restaurants, is now fully immersed in the business of grilling meat. “The izakaya business won’t ever return to what it was.”
Yakiniku restaurants make up only a smidgen of Japan’s 34 trillion yen ($322 billion) restaurant industry, which is highly fragmented, with izakayas, sushi and hamburger shops occupying slightly bigger market sizes within the segment, according to market researcher Fuji Keizai. That’s giving restaurateurs confidence that there’s still room for yakiniku eateries, which saw 568 billion yen in sales in 2019, to grow.
Before the Covid-19 pandemic hit, yakiniku restaurants had been staging a recovery over the past eight years after the global financial crisis and a 2011 incident involving food poisoning at a well-known chain hurt sales, according to Kunitaka Dan, an executive director at the All Japan Yakiniku Association.
Outside Japan, yakiniku has also picked up more name recognition in recent years, alongside Korean-styled barbecue restaurants. Gyu-Kaku, one of the largest yakiniku chain operators, has made inroads into the U.S., with 52 locations.
Hisayuki Kato, Monogatari’s president, said changes in dining habits have worked in favor of yakiniku joints. The restaurant industry is shrinking as people eat out less, but the dining experiences consumers are least likely to give up are meals with their families, as well as special-occasion foods such as steak or sushi. Yakiniku restaurants typically fit the bill for both needs.
Yakiniku also caters to a broader range of customers, from couples to grandparents, and can typically attract people no matter the season, compared with izakayas, watering holes for business people. Izakayas can be seasonal, with much of the profit coming in around holidays, and are more labor-intensive because they’re service oriented. At yakiniku joints, many of the tasks can be automated; Watami’s yakiniku restaurants have conveyor belts and robots to bring food to tables. Monogatari is also deploying robots at its eateries.
“We’re meeting that last remaining demand for eating out, as well as riding the yakiniku boom,” Kato said. “That puts us in a good position.
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