An Insider's comments on Japan's high tech business world

* * * * * * * * TERRIE’S TAKE – BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.

General Edition Sunday, Feb 04, 2018, Issue No. 930

– What’s New — Alishan, the Organic Food Pioneers in Japan
– News — Robbed of US$523m, Coincheck says it will pay everyone back
– Upcoming Events
– Corrections/Feedback
– Travel Picks — Sushi at Haneda, Yoshidamachi in Yokohama
– News Credits

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Alishan, the Organic Food Pioneers in Japan

One of the delights of living in Japan is meeting other non-Japanese
entrepreneurs who are happy in their skin and who are contributing to
make peoples’ lives better in their adopted country – and better still,
without making a fuss about it. They are Japan’s unsung foreign-born
heroes. Two such people are Jack Bayles and Fay Chen, a couple who have
been instrumental in helping Japanese discover organic and healthy foods
even as the nation forgets its own heritage and takes on a Western diet.

And yes, for everyday food the Japanese really are forgetting their food
heritage. It’s weird because overseas the media talk in reverent tones
about the “Japanese Diet” by which of course they mean fish, veges,
whole soy products, etc. But in reality, the diet consumed by most
Japanese these days is highly Westernized, centered on high intakes of
meat, sugars, and processed foods. In fact, in 2011 the government’s
Internal Affairs ministry announced that Japanese families for the first
time spent more on bread than they did on rice. Unfortunately what they
call bread is usually a denatured chemical sponge… and is one reason
why metabolic syndrome is on the rise.

An interesting diet experiment conducted by researchers at the Japan
Women’s University in Tokyo and Kewpie last year took 33 middle-aged
(30-49 years old) men with standard modern diets and who also ranked
high for cardiovascular disease risk factors. The researchers put the
subjects on a strict, old fashioned Japanese Diet for 6 weeks, and by
the end of the experiment a convincing 91.9% experienced one or more
reductions in body weight, BMI, and waist circumference, leptin
concentration, LDL-cholesterol, plasma glucose and insulin
concentrations, and other factors. In other words they got a lot healthier. [The 2017 pilot study report]

The Bayles family (Jack, Fay, and their two adult kids, Jay and Kay)
have made it their mission to educate and support the Japanese public so
that consumers can keep the foreign-inspired flavors that motivates so
many young moms these days, but also have a diet which offers the same
levels of nutrition that their traditional farm diets would have
afforded in the past. We interviewed Jack Bayles, to find out what got
him into the organic food business, what his biggest challenges are, how
he and Fay are dealing with succession planning, and strategies for
dealing with competition from international big brands.

[Jack Bayles Interview]

TT: Why organic foods and why in Japan?

Jack: I was trained in Animal and Veterinary Sciences. Since childhood I
have always been interested in the effects and preparation of food.
Early on I was a big fan of home-canning and small home businesses that
made “killer” [Ed: killer tastes] jam, pickles or whatever, and who were
selling it from road side stands.

In early 80’s after traveling on a shoe string budget through Africa and
Asia, I just happened to meet some like minded folks in Japan, stayed on
a bit, and discovered the joys of collecting, restoring, and exporting
Japanese folk craft abroad – particularly scrolls and antiques. I
received an excellent hands-on education in shipping logistics and I
applied this knowledge to importing natural foodstuffs for myself and my
friends (we were all vegetarians). From there it seemed only natural to
start a mail order service and supply others in the same boat. Being a
vegetarian in Japan was not so easy back then.

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TT: How did you and Fay meet, and out of interest, with both of you in
the business who’s the boss in the family?

Jack: She ran a hotel in the village of Alishan, about half way up the
highest mountain in Taiwan, Mt. Yushan. Her place was famous on the
travelers’ trail (pre-Internet of course). I stayed there and was
impressed by her outgoing personality and confidence. A year later we
bumped into each other in Bangkok flying on the same flight to Hong Kong
and we started hanging out. As an aside – our first date in Hong Kong
was at the upmarket Peninsula Hotel in Tsim Sha Tsui, for tea. I
don’t think she knew that, in reality, I was living in the Chunking
Mansions in a 10 person bunk room!

The boss? Well, Fay is COO of our company for sure. From our original
antique business until now, she was the one who made sure we sent out
invoices AND got paid. My role is one of international communicator and
chief philosophical officer (smile)!

TT: Why is organic food growing in popularity here?

Jack: Japanese as a culture are deeply interested in what they consume.
As a country that has the highest application rate of pesticide and
miscellaneous other “-cides” in the world, I think many people are
starting to wake up to the idea that what goes on the plants also goes
in some small dose into your stomach. In the future anyone who can
afford it will choose to eat foods with lower chemical loads, and
furthermore will be eating a more plant-focused rather than meat/fish
focused diet.

Until recently organic food really only registered with people on the
cutting edge, but over the last few years, perhaps prompted by the
Daiichi nuclear power plant disaster, the population of cutting edge
people is expanding. This is a good thing and the authorities should not
keep the Japanese public ignorant about what goes into their food. At
the moment, Japanese food labeling is pretty poor from the consumer’s
perspective. Overseas there is mandated labeling of each product’s
contents, for example, by % (Australia) and/or the amount of added sugar
(USA), rather than just a total measure of sugar present.

TT: What is the biggest challenge to importing organic foods?

Jack: The global organic market is massive. Here in Japan, one of our
biggest challenges is dealing with the short shelf life for imports,
because of shipping times and of course the natural state of the
product. Most Japanese large account retailers want 50% remaining shelf
life time when they buy a product, so if you have a 12-month total shelf
life and it takes two months to get the product into Japan, then you
only have four months to sell it in.

TT: Who are your biggest clients and why?

Jack: Our foundation is built on commercial accounts of motivated
natural food stores. These stores are typically located in middleclass
to upper income urban/suburban areas where there are near the commuter
train stations.

TT: What are your biggest products and why?

Jack: Products related to breakfast. Our company’s first legal imports
were peanut butter and granola. We’re still with our original suppliers
because at almost every event we display at, we get someone coming up
and commenting, “…oh your peanut butter is so good!”

TT: What is your biggest competitive threat today?

Jack: Amazon looks like it could crush the retail food distribution
system as we know it – although unless the food import application and
regulations change, they will still have to buy the product from
someone. Our products are already widely available online both at Amazon
and elsewhere.

TT: In 10 years time?

Jack: That our cutting edge consumers can’t pass their enthusiasm for a
good diet to their friends, families, and neighborhoods – that the
conscious connection between good diet and health and personal success
is lost. Not a conspiracy, but due to many contributing factors
including the rise in convenience food and pseudo “health food”, the
Japanese are slowly being “de-educated” about buying food from people
they trust, sourced from places they know, and known to be safe and

Related to this, the Japanese government appears to be moving to open up
imports, reducing testing and documentation requirements, and thus
exposing the country’s consumers to predatory producers in countries
with little or no interest in product quality and control. To be clear,
I believe some consumer protection activity and control is necessary –
because there really are some unscrupulous suppliers out there.

TT: When did Alishan go online?

Jack: We were an early mover and had a shop online in the mid-90’s, with
code written by Fay’s brother. But over the years as our wholesale side
has grown so strongly we didn’t allocate the necessary resources to keep
the consumer site in top shape. I’m pleased to say, though, that
recently we completely renewed the shopping cart and it is much faster,
cleaner and easier to use. The actual homepage design will also receive
a total make over in March, so stay tuned. [Alishan store URL]

TT: How did you put together your team? Any people with amazing talents?

Jack: We’re a family company and so we rarely outsource – we like to do
everything ourselves if we can. Whether it’s container loading at
source, governmental documentation, warehousing, repacking, wholesaling
and retailing, or staffing the café – it’s best you enjoy physical work
if you’d join Alishan…!

We are a women-friendly company and many of the ladies who joined us as
simple baggers, packers, and labelers 28 years ago are still with us –
in more stimulating roles of course. Our staff helped us create an
environment that made Fay and I want to have our children grow up in
Japan. Although our kids got their tertiary educations abroad, they’re
back in Japan now, and the main reason is our family focus on providing
good food. So, yes, at the heart of our business we are a family, and
when our staff have issues at their own homes to deal with – parents,
children, etc., we let them take whatever time is needed.

TT: Amazing talents?

Jack: I would have to say, my wife Fay. She has been astounding over
these 30 years (we incorporated in September 1988). I have lots of
ideas, from visions and passions and connections I receive worldwide.
But someone has to manage our team of 50. So when I am inspired to build
a 4-story North American red barn in rural Saitama, I can organize the
containers but it was Fay who organized the local permits, dealt with
issues, and got the accommodation rented for the specialist carpenters
we brought in. She kept everything moving along.

TT: How is the team reacting to your children being involved in the

Jack: Luckily our staff are realizing that though we have been here
since the beginning, we will not be here forever. I think at the start
some staff forgot that Jay and Kay grew up inside the company and that
they were unloading containers, labeling jars and helping the ladies
since infanthood. Certainly now that they are back, they haven’t needed
all the training in all the departments as would be normal for a new hire.

More importantly, Jay and Kay have brought in a new product with a new
way of communicating it… Lemonaid+. The story behind this is that
before returning to Japan, Kay worked at a German Fair Trade, Organic,
Low-Sugar beverage company with stunningly good presentation skills. She
returned to Japan very excited and told us, “This is the real thing.”
This product is very attractive, and as an example, our son Jay was
presenting to a major fashion house another food project we have, and
the presentation was going NO WHERE. He then pivoted mid-meeting to
discuss Lemonaid+ and everyone in the room got excited. The twist for
this product is that separately to its Fair Trade certification, the
maker also donates seven yen from each bottle purchase, to a foundation
that invests in the rural communities the ingredients are sourced from.
In 5 years those donations have risen to 3 million Euro. We’re now
starting our second year with the product and are already doing multiple
containers per shipment season.

TT: So are the kids turning things upside down compared to how you have
been doing things, and how do you and Fay feel about that?

Jack: Upside down may be one way to describe it, but in reality they are
confronting us with an industry reality – that of urgency. If not now,
then when? And why not NOW? They are also helping us strengthen our
identity to a nationwide audience. Back in the day, Fay and I were deep
into the community and we would set up all sorts of little festivals and
events – our customers knew us. But as we have grown, we have gotten out
less and our kids, Jay and Kay are discovering a massive group of people
who know the name and recognize Alishan as the trusted original organic
company – but know NOTHING about us. So we’re now doing a lot more
collaborations and outreach – which frankly is much more fun and and
invigorating than counting beans.

As an example, one really fun event I’m looking forward to will be the
Alishan Collaborative Dessert Night on February 23, from 7 to 12 in the
evening (yes, this event runs late), at .Raw in Roppongi. Organic beer,
wine, cocktails and Vegan desert by visiting Chef Prooofs Place from UK.
There is more information on Alishan’s Facebook page. [Facebook page] [.Raw restaurant page]

TT: Your countryside cafe is a success story in and of itself. What are
the numbers and where are all those people coming from?

Jack: Winter is of course slow but with warm weather we easily fill our
location multiple times a day. We can seat 60 guests on the riverside
deck (we have a retractable canopy roof to protect them from the
elements). In the flower season of September things can really go crazy,
with over 500 customers a day at the peak! 50% of our customers come
from more than 40 minutes away and on the weekends they typically come
out from Tokyo. That’s pretty impressive, as it’s a 70-minute drive or
train ride from inner Tokyo.

TT: What’s the story behind your distinctive red wooden barn? How was
that structure even allowed in Japan?

Jack: I am from New England where these barns are everywhere. We decided
to make one in Japan so we sketched it out, got a Japanese
engineer/architect to draw it up, and had to provide a mountain of
building details, but finally the local city hall approved it. We bought
insulated walls in from Washington State, all the beams (as in
post-and-beam construction) were from British Columbia, all the doors,
windows, and cabinets came from Portland Oregon, and the flooring was
from Australia – Eucalyptus.

Everything arrived in seven massive 40-foot containers! To top it off,
we had an international team of carpenters and roustabouts, and we built
it in just 6 months. For anyone else considering this, a good tip is
that we had all the beams and walls precut overseas so that they could
be imported as a prefab with zero duty. The importation process itself
was relatively easy because we had prepared an application with massive
cross-referenced detail.

TT: How has Alishan been helping the local community? Is what you are
doing a template for other foreigners living in rural areas?

Jack: Our business template is very simple – we believe in being
self-financed at the start, then to have a unique product (perhaps our
most important advantage) that you can be proud of, then invest the time
to let the word get out. Of course, being in the food industry, we had
the added advantage that we could eat what didn’t sell.

As far as the local people are concerned, Alishan is always ready to
support any group attempting to do good for the community be it in Japan
or worldwide. Kids Cafes, ecological groups, peace studies, anti-nuclear
groups, family suppers, etc. We provide high-value gift baskets of our
organic foods for raffles or help out in refreshments. Most of the
groups that ask are bi-cultural and actually I wish more purely local
groups asked.

TT: Speaking of food and community, how did you get involved with Second
Harvest, the food recycling organization?

Jack: Before the conception of Second Harvest Japan, Charles was
organizing a summer party for the homeless men of the Sumidagawa
riverside camps and I called him up and offered to donate some party
goods. Since then I have gotten more involved because I love supplying
food to people. Selling it or giving it away – both are deeply
satisfying and fun. In fact being part of the logistical chain to give
it away is the most fun of all.

TT: Lastly, What’s your favorite cafe dessert?

Jack: Yawen’s vegan walnut/apple/fig pie. It tastes incredibly good, but
even more important is the ingredients used in it, which are organic
dried fruits & nuts, are sourced from people I’ve known for decades.

Watch here:

Oh, but hey, Jack’s Oatmeal Raisin Cookie is also hard to beat! It’s
secret is the infused orange flavor.

…The information janitors/


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+++ NEWS

– Smallest rocket launches satellite
– HIS Strange Cafe debuts robot barista
– Bottle of 50-year-old Yamazaki whisky sells for record
– Line stock price drops as it fails to deliver
– Robbed of US$523m, Coincheck says it will pay everyone back

=> Smallest rocket launches satellite

The Japan Aerospace Exploration Agency (JAXA) has just set a record by
launching a satellite on the smallest-ever rocket designed for payloads.
The SS-520 carried up an equally small 35cm satellite called the
TRICOM-1R to a geostationary orbit, to provide store-and-forward data
relay and digital imaging. The satellite belongs to the University of
Tokyo. ***Ed: Apparently these small rockets can carry payloads for as
little as JPY500m per launch, making it possible for private telco’s and
mapping companies to have their own constellation of satellites.**
(Source: TT commentary from, Feb 3, 2018)

=> HIS Strange Cafe debuts robot barista

You’ve got to hand it to Sawada-san over at HIS, he really knows how to
generate PR buzz. Following on the viral PR from the robot-enriched
Henn-na Hotel at Huis Ten Bosch in Kyushu, the company now has a Henn-na
Cafe in Shibuya (Tokyo). The robot is an arm and screen with cartoon
eyes, named Sawyer. He isn’t that engaging, but does apparently make a
passable latte. In fact, he can also create cappucinos, hot chocolate,
and green tea lattes. ***Ed: A coffee made by the robot costs JPY320,
which means HIS won’t be recovering its investment costs on human labor
any time soon, but on the other hand, the line of eager photo-taking
tourists will more than make up the costs in PR value.** (Source: TT
commentary from, Feb 3, 2018)

=> Bottle of 50-year-old Yamazaki whisky sells for record

While we’re on the subject of Japanese beverages, the phenomenal run on
aged Japanese whiskies is still alive and well, as evidenced from the
record price fetched for a single bottle of Suntory Yamazaki whisky
auctioned by Sotheby’s in Hong Kong last week. The bottle was the firm’s
50-year old top-of-the-line single malt limited edition, and sold for
JPY32.6m (US$298,879). As a limited edition, the original bottle was one
of just 150 bottles released in December 2011 when it sold for what
seemed a high price at the time – JPY1,050,000. ***Ed: Demand for
Japanese single malts is so great that even common bottles of Yamazaki
whisky procured in Japan are selling for 3-4 times their original price
online in Hong Kong and China. Great PR for Suntory of course.**
(Source: TT commentary from, Feb 01, 2018)

=> Line stock price drops as it fails to deliver

One of the challenges with having a megahit product is being able to
follow up with other products later, so as to keep the revenue growth
going and keep shareholders buying your stock. After aggregating 167m
users of its Line messaging app, the company still hasn’t cracked the
upselling code needed to start converting those users into customers for
its other products and services. The company reported disappointing
results (a loss of JPY4bn in the last quarter) from its various venture
investments, and shareholders promptly dumped the stock, causing Line’s
share price to drop 5.6% last Thursday. ***Ed: The company is
desperately trying to find a niche in the AI and financial services
spaces for itself, which fair enough, it managed to do in messaging in
2011 despite the presence of Facebook and others. However, we get the
feeling that they just don’t have the advanced engineering horsepower to
compete with the Facebooks and Googles of the world.*** (Source: TT
commentary from, Feb 01, 2018)

=> Robbed of US$523m, Coincheck says it will pay everyone back

Tokyo-based cryptocurrency exchange Coincheck was in the news last week
after being hacked and suffering the theft of 523,000,000 XEM (NEM)
coins – worth approximately US$523m. Following the obligatory public
apologies and FSA raid, the company has surprisingly offered to
reimburse all impacted investors. Roughly speaking this means paying out
the full amount lost to over 260,000 customers. Securities experts are
scratching their heads wondering how Coincheck will come up with this
much money. ***Ed: The company is capitalized at just under JPY100m, so
certainly it doesn’t have the capital to pay this compensation. However,
did anyone else notice that a co-founder of the company is none other
than James Riney of 500 Startups Japan? Perhaps, with that kind of
connection, the company has outside help on the way?** (Source: TT
commentary from, Jan 28, 2018)

NOTE: Broken links
Some online news sources remove their articles after just a few days of
posting them, thus breaking our links — we apologize for the inconvenience.



——— Australia/NZ Japan Travel Seminars ————–

Title: “Latests Trends in Japan’s Inbound Travel Boom”
A series of free travel seminars in Australia and New Zealand, by Terrie

Japan is in the midst of the world’s largest inbound travel boom in the
last 20 years. From 2011 until 2017, the number of inbound travelers has
increased 450%, from 6.2m to 28m (estimated) by March 31st this year.
What is exciting about this US$40bn+ travel boom is that more than 50%
of the market is held by non-Japanese firms, and that means great
opportunities for Australian and Kiwi firms as the growth continues.

As founder and CEO of one of Japan’s top inbound travel sites,, Terrie Lloyd is at the forefront of the market,
helping to make and shape trends as the market evolves. His particular
focus is on repeat travelers, who now account for more than 55% of the
flow, and who are demanding more specialist experiences that typically
define a maturing market. His presentation will share the latest news on
what trends are emerging, and where the opportunities lie for Australian
and Kiwi firms.

Terrie will give some specific examples of new travel products and
services now under development, particularly highlighting hiking and
trekking trails in Kyushu, a still-underdeveloped part of Japan (read,
low cost, great food, and no hordes of tourists)

Speaking Locations
* Seminars 1 & 2: Sydney, Australia, February 9, 17:30 in the Sydney CBD
(Training room @ Level 4/20 Bond St, Sydney NSW 2000), and February 10
18:00 at Quest Hotel at Sydney Olympic Park
* Seminar 3: Auckland, New Zealand, February 14, 16:00 at the Hobson
Room, Crowne Plaza Hotel, Auckland

The seminars are free of charge. Other details will be confirmed as they
come to hand. Interested attendees can reserve a space, by emailing us


No events or corrections this week.



=> Ariso Sushi
Mouth-watering sushi at Haneda Airport

Ariso Sushi is not the average sushi parlor you see on every corner in
Japan. Located at Haneda Airport’s International Terminal, this
restaurant is perfect for people craving a final taste of delectable
sushi before they leave Japan, or those who cannot wait to hit the
streets of Tokyo to look for a sushi outlet.

The sushi at Ariso lives up to its billing as “fresh and natural”. Tuna
belly is a common nigiri topping, but what’s special about the one here
is that you can feel it “melt” in your mouth. The fish is soft and easy
on the palate, and even non-sushi connoisseurs can tell that this sushi
is a cut above normal.

Mackerel (and horse mackerel) lovers are in for a treat as the saba and
aji (Japanese for mackerel and horse mackerel respectively) nigiri are
packed well and the fish is as fresh as you would expect. The mackerel
is sourced straight from Kanagawa, while the horse mackerel is from

=> Yoshidamachi: Drinking and Dining in Yokohama
Explore and bar hop in the lively neighborhood south of Tokyo

The Tokyo area is abundant with high profile drinking neighborhoods like
Shibuya’s Nonbei Yokocho and Shinjuku’s Golden Gai. Great to experience
once, these well-trafficked locations are often so filled with tourists
and large crowds that visitors may have little chance to enjoy a
conversation and drink.

This is where Yoshidamachi, the street walking, bar-hopping paradise
comes into the picture. This well-kept secret for evening drinkers and
night owls has an exciting selection of drinking destinations, an
engaging local crowd and a rich history. Dating back to the 1850’s when
Japan first opened its ports to the western world, foreigners and locals
have frequented Yoshidamachi for cultural exchange and festivities.
Minutes from Tokyo Harbor, the well placed street once acted as a
roaring trade market. Today, Yoshidamachi has transformed to a lively
entertainment district boasting nearly 100 drinking and dining



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