Falling Seven Times, Rising Eight: Oolong Tea Strategy Hits Bull’s Eye

My favorite part of the Yomiuri Shinbun is called 七転八起. That means “tumbling seven times and rising eight times,” and or being tenacious through the ups and downs of life. Every few weeks, successful older businessmen recount their careers. I’d like to translate a few of their stories.

七転八起 – 本庄八郎 – ウーロン茶戦略 的中 (Original)

Hachiro Honjo

Falling Seven Times, Rising Eight: Oolong Tea Strategy Hits Bull’s Eye
Hachiro Honjo, Chairman of Ito En Ltd., Age 69

Giving Up on Politics
“When my dreams of becoming a politician were dashed, my older brother and I decided to start our own business. Raising capital was painful.”

In college, I practiced debate and so forth with the aim of becoming a politician, but I didn’t have a power base, name recognition, or funding. I thought that if I became a journalist, I could get into politics from there, so I took entrance exams for a lot of newspaper companies and failed them all. There was nothing else I could do, so I changed directions and went into business.

After graduation, I went into automobile sales, thinking that if I made a business more successful, I could become a president. I learned basic repairs at a shop and did repairs for my customers for free, and within half a year I was the top salesman. But I realized the company drew its directors from manufacturing, not sales, so my plans would come to naught.

I started a business with my brother, who is 6 older than me and who also worked for the car company. We bought things like ramen and tea wholesale and delivered them to apartment complexes. We expanded to buying food wholesale and selling it to supermarkets. You could call us a secondhand wholesale store.

It was hard to get funding. We’ve pawned our family’s things to pay employees before. Once, we thought we’d made a delivery to a new supermarket, but three days later learned that we hadn’t, so we had to pay 10 million yen in damages.

“I pushed the company into a gamble on oolong tea, and it worked.”
After our supplier dissolved, we took over a green tea store in Ueno, Tokyo with a large signboard saying “Ito En” and narrowed our merchandise down to green tea.

At the time, green tea was sold in bulk in supermarkets, and after 3 or 4 days, its taste would change. Our innovation was adding aluminum foil to the plastic bottles holding the tea. This moisture-proofed and deodorized the bottles, and in turn our tea became popular. In just five years, we were the top tea company in the country.

But all along, I was wondering if we could expand into other drinks. A tea teacher taught me about oolong tea. Green tea is the tea of priests; oolong tea has a more full-bodied flavor. “This will do,” I thought, so I started ordering it from China.

At first, it didn’t sell at all. I was the only one drinking it. When I was 38, the supplier wanted to sign a contract, so I committed to importing 60 tons. My older brother and the directors asked me, “Are you trying to destroy the company?” They were furious, but I had a feeling it could sell.

A year later, Pink Lady, one of the most popular idols, said on TV, “I lost weight by drinking oolong tea.” After that, it sold and sold, and we started selling it in cans, as well. At the time, our company and our supplier were the only ones in the business, so we made supply contracts with the big companies like Suntory, and our profits exploded.

The next challenge was canned green tea. We went crazy trying to develop a product that wouldn’t discolor over time. We finally released Roasted Tea, the forerunner of Oi! Tea, in 1985, and our company went into orbit.

Decisions and Power Transfers
“At 47, I became the president. My brother was my model.”

When I became the president, the first thing I did was take our company public. I wanted to increase our client base by increasing our name recognition throughout the country. I’m confident we are the most passionate company in Japan about transparency with our shareholders.

I took over for my brother, who was an incredible president. I tried to imitate him. Last year, I handed over the presidency to my nephew. I’m also entrusting our business in the United States to the younger generation.

I often tell the employees there will be failures. I’ve made some big blunders myself. Even if the mistake makes people angry, it’s best if those doing the scolding limit themselves to two hours and those being scolded keep their heads down and listen quietly. I believe that if you reflect deeply about what you’ve done, it will become future strength.

Yu Toda conducted this interview.

Hachiro Honjo was born in Hyogo Prefecture in 1940. He graduated from Waseda University Law School in 1963. In 1964, he and his older brother, Masanori, formally established a business. In 1988, Hachiro became the president, and he has been the chairman since April 2009. His hobby is golf. The brothers personally invested in the creation of the Great Island Club, a golf course in Chonan, Chiba Prefecture which opened in 1993. Since Masanori passed away in 2002, Hachiro has checked the state of the course while playing a round there every week.

Ito En, Limited was established in 1969. It joined the ranks of the large manufacturers on the huge success of “Oi! Tea.” In 2009, it sold about 173,800,000 cases of cool beverages, its highest volume ever. The Tully’s Coffee chain of coffee shops is its subsidiary.

February 4, 2010

Translator’s Notes: Ito is a family name containing the word “wisteria,” and En means “garden.” Ito En is responsible for many of the vending machines that are ubiquitous in Japan. Cold oolong tea is now the drink of choice for those who are forgoing alcohol at parties.

Explore posts in the same categories: Business, Cuisine, Japan, Translations

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