Promoting regional sustenance over regional revitalization through the development of unique products leveraging the appeal of Hokkaido ingredients

This article was published in the Spring 2024 issue of Litterae Populi. The full issue can be found here.

Kiyohiro Houkin and Tomoyasu Marutani

Seicomart, a convenience store chain hailing from Hokkaido, continues its steady advance. Chairman Tomoyasu Marutani, who originally comes from the finance sector, has spearheaded the creation of a corporate group that encompasses the entire supply chain, from the production and procurement of raw materials to food manufacturing, wholesaling, logistics, and retailing. He now focuses on leveraging the Hokkaido brand to actively market products of that brand not just in Honshu, but also internationally. President Kiyohiro Houkin, who is driving reforms to make Hokkaido University an unparalleled institution, interviewed Marutani about his life, business strategies, personnel development, and vision for the future, including the prospects for Hokkaido.

Tomoyasu Marutani (Guest)

Representative director and chairman, Secoma Co., Ltd.

Born in Hokkaido in 1954. Graduated from the Faculty of Law at Keio University. Joined Hokkaido Takushoku Bank, Ltd. in 1979. In 1998, transitioned to Citibank, N.A., where he held various roles, including that of head of the Customer and Talent Development Headquarters. Joined Seicomart Co., Ltd. (now Secoma Co., Ltd.) in 2007, was appointed executive managing director the same year, advanced to vice president in 2008, and was named president in 2009. Has held his current position since April 2020.

Kiyohiro Houkin (Interviewer)

President, Hokkaido University

Born in Hokkaido in 1954. Graduated from Hokkaido University School of Medicine. Doctor (medicine) (Hokkaido University). Worked for Hokkaido University Hospital and other facilities since 1979. After working as a visiting researcher at the University of California, Davis, became an assistant professor at the Hokkaido University Graduate School of Medicine in 2000, professor of Sapporo Medical University School of Medicine in 2001 and professor of the Hokkaido University Graduate School of Medicine in 2010. After becoming the director of Hokkaido University Hospital and vice executive president of Hokkaido University in 2013, and the director of Hokkaido University Hospital and vice president of Hokkaido University in 2017, assumed the present position in October 2020.

Born the son of a politician

Houkin: You and I were born on the same day in Hokkaido, truly living through the same times. You’re from Ikeda Town, aren’t you?

Marutani: I originally come from what used to be Shihoro Village. We moved to Ikeda Town when I was about two or three years old, after my father unexpectedly won the mayoral election there—a victory nobody saw coming. Growing up while in the spotlight as the mayor’s son was something I found quite challenging in our tight-knit community.

Houkin: Can you recall any childhood memories?

Marutani: When I was a small kid, my father got into winemaking in Ikeda. I remember asking him why something so tart and sour could be considered delicious. His reply was memorable: “It’s the flavor of the world, so get used to it.” Another vivid memory involves delving into the philosophy books that filled my father’s bookshelves. Those books were challenging, but I was fascinated by the challenge of deciphering them with the help of a dictionary in my junior high years.

Houkin: Given that your father was a prominent figure in town, I imagine it might have been challenging for you to live a normal childhood. How did you view your father back then?

Marutani: When I was in high school, a TV crew that came to interview me about my father posed that exact question. I remember responding that I felt “a sense of awe” towards him. I admired him deeply, but our relationship was somewhat distant.

Houkin: After graduating from Hakodate La Salle High School and moving on to Keio University’s Faculty of Law, did you have plans for the future?

Marutani: I’d toyed with the idea of becoming a lawyer or a politician, but being a lawyer just didn’t seem like the right fit for me, and I wasn’t too keen on all that studying either. As for going into politics, my father ended up getting elected to the House of Councillors later on. Seeing his election campaign up close really opened my eyes to its massive responsibilities, the financial strains, and how much it could disrupt family life. The demands just seemed overwhelming.

Houkin: Having supported your father’s election campaign, could you not have also envisioned a career in politics?

Marutani: I think my father wanted me to, but it’s incredibly tough to stay true to the politics of integrity the way he did.

Houkin: I believe you’d have made an outstanding politician. Perhaps your father saw the potential in you and thus wanted you to pursue politics. After graduating from university, you joined Hokkaido Takushoku Bank (Takugin).

Marutani: I also applied to a trading company, feeling that globetrotting would suit me well. The banking sector also seemed appealing, and I believed that working at Takugin would enable me to make a meaningful contribution to Hokkaido. My first two years at Takugin, engaging in new loans for the horse racing and breeding industries, were exceptionally fulfilling.

Houkin: Then you moved to Citibank, N.A.

Marutani: After Takugin declared bankruptcy in 1997, I spent a year on transitional tasks before officially joining Citibank in 1998.

Houkin: It sounds like you went through Takugin’s bankruptcy firsthand.

Marutani: At that time, I was still relatively junior, so I wasn’t in a position to understand everything that was going on. I believe there were strategies for dealing with and addressing crises, but Takugin wasn’t entirely successful in executing them. My last work there involved finding new employment for my more than 80 subordinates.

Houkin: That’s not an experience many have, for sure. Moving to Seicomart in 2007, after Citibank, marked a significant transition, especially considering how different the industries are.

Marutani: It’s often said that the two industries are totally different, but I never let that bother me. Ultimately, the core principles of corporate management are the same. I felt no unease over practices like valuing employees and customers or employing organizational management methods, regardless of the industry. The presence of many young people and the welcoming attitude toward outsiders made working there extremely easy for me.

Opening stores where our competitors cannot

Houkin: Seicomart has garnered acclaim for its exceptional customer satisfaction in a fiercely competitive industry. What’s your view on achieving this, and could you share insights into some business strategies?

Marutani: To thrive amidst intense competition, it’s crucial to stay out of the fray. For example, when identical products are available across various stores, the stores with ample parking or proximity to stations naturally have an edge. Yet, by offering unique products, such as Seicomart’s Hot Chef pork cutlet rice bowl and the G7 Series of wine, we can entice people to go out of their way to visit our stores. Because there are numerous product categories unaffected by fierce competition, we can pursue sustainable business management by offering unique products.

Houkin: That’s quite interesting. Moving on, I’m curious about your community-based approach. In the convenience store industry, Seicomart seems unique in showcasing regional characteristics. How do you manage to offer varied product lineups across different regions, despite the industry’s challenges in doing so?

Marutani: In my lectures, I often mention that community-based business management is easier said than done. For national chains, offering products with distinctive regional characteristics can be difficult, especially when efficiency is a priority. Our ability to use ingredients sourced from Hokkaido allows us to create fresh products that national chains can’t. Beyond using locally sourced milk, ice cream, and vegetables for our prepared foods, our ownership of factories enables the production of distinctive items like Hot Chef rice balls filled with salmon caught off Nemuro. This approach allows us to maintain our uniqueness and flexibility.

Houkin: While other convenience stores may be taking similar initiatives, I get the impression that the level of commitment is quite different.

Marutani: Exactly. For instance, if someone in a mountainous region wants ika soumen (thin strips of squid sashimi), we make it happen right away. This individual then makes the effort to visit our store, becoming a repeat customer who contributes to our sales. One person can transform into the equivalent of hundreds of customers. A thousand daily visitors translate to 365,000 over the course of a year. So, we can establish a viable market area even in sparsely populated regions. I believe this approach is what sets us apart from other convenience store chains.

Houkin: I’m interested in hearing about your engagement with the Sustainable Development Goals (SDGs). When did you become conscious of them and how have you approached them?

Marutani: When it comes to the SDGs, sustainability, and recycling, I believe it’s crucial that we achieve them through our corporate activities. Reducing waste and utilizing resources lead to sustainability. For instance, in the process of cooking boiled eggs, about 5% end up cracked. We repurpose these into tartar sauce or sandwiches, minimizing waste and keeping prices low. We also recycle waste cooking oil from our Hot Chef kitchens into biodiesel fuel. Rather than adding value, we aim to cut costs while ensuring the profits needed for recycling. I refer to this approach as “reduction value,” a term I coined to mean the opposite of “added value.” It’s about reviewing costs to reduce financial burdens on our customers while preserving our earnings (value). This approach becomes increasingly significant as more individuals rely solely on social security income, especially with the advancing age of the population.

Human resource development and the 3D market

Houkin: I recently watched a program on NHK World- Japan titled “All-Rounder,” which features a convenience store employee as the protagonist. The job isn’t for everyone, as it requires a broad range of skills, including communication, inventory management, and even bathroom cleaning. I was surprised to learn that among international students, working at a convenience store is often seen as a high-status job. Developing such skilled personnel is a challenge, as language skills and other qualifications are required. Since watching this program, my perspective on convenience store staff has changed. Given that the success of companies hinges on their people, I’d be interested in hearing your approach to human resource development.

Marutani: At our Phoenix Academy, we provide customer service and etiquette training to all new staff members. The training incorporates methodologies used in the United States. It’s uncommon for companies in Japan to offer such extensive training to part-time and temporary workers.

For instance, when a customer arrives carrying items and struggles to open the door, our staff member will quickly come from behind the counter to assist. These actions often elicit words of gratitude. Our staff members value such thoughtful attentiveness, which I believe reflects the essence of Japanese hospitality.

Our stores are frequented by many regulars, fostering a sense of community that sparks lively conversations. This interaction is the heart of our service and the foundation of customer satisfaction. Ultimately, it all comes down to valuing both our customers and the communities to which they belong.

Houkin: Without fostering new communities, we can’t build a new society. I’ve found your insights truly valuable.

To wrap up, I’d appreciate it if you’d share your vision for the future and any advice you might have for students at Hokkaido University.

Marutani: In the rural towns of Hokkaido, where aging and depopulation are advancing, it’s essential to determine how to develop our business. It’s important to see the market not just as one customer, but as 365 individuals, reflecting the diverse needs present every day of the year. Rather than focusing solely on the number of people, emphasizing the provision of a necessary lineup of products can deepen our market penetration. Therefore, employing this three-dimensional approach is key to unlocking our full potential.

Hokkaido holds great potential to become a key energy supply base, to see tourism develop through the extension of the Shinkansen bullet train line, and to expand industry-academia collaboration. Our store in Shosanbetsu Village has seen increasing sales despite the declining population. Instead of lamenting population declines, we should focus on how deeply we can penetrate into local markets. I believe this potential exists across Hokkaido.

I use the expression “regional sustenance” rather than “regional revitalization.” By sustaining communities, opportunities arise. This is the stance we ought to take not just as a retail business, but also as a food manufacturer.

I want Hokkaido University students to appreciate the value of learning in the vast environment that Hokkaido offers. Considering how to utilize local and regional advantages is crucial. As Hokkaido undoubtedly serves as a vital food supply base, I wish for them to apply what they’ve learned right here in Hokkaido. With the region’s bright future, I look forward to Hokkaido University students finding places to shine in Hokkaido.

Houkin: From today’s conversation, I’ve realized that the emphasis on uniqueness, awareness of regional characteristics, and sustainability has a lot in common with what Hokkaido University is striving for. I was particularly moved by the approach to developing human resources and envisioning Hokkaido’s future in the context of current realities, which I find closely aligned with the principles of university management. Thank you for your time today.

This article was published in the Spring 2024 issue of Litterae Populi. The full issue can be found here.