Cheese Revolution #5: Interview With Terra Foods Founder Ike Nakayama

The story of a vegan entrepreneur in Japan

Hello, Market Shakers! 

Today, we share an exciting interview with Ike Nakayama, founder of Terra Foods and the Terra Burger & Bowl Cafe. 

After embracing veganism ten years ago, he realized Japan lacked alternative options for vegan people. So, he took matters into his own hands. After much trial and error in his kitchen, he came up with a konjac and soy-based meat substitute. Today, Ike Nakayama sells his products online, distributes them to food services providers and retailers and manages a food truck, a cafe, and has new products in mind. 

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The lack of vegan options in Japan pushed Ike Nakayama to come up with his own.

Ten years ago, Ike Nakayama embraced veganism but quickly realized that Japan had no options for vegan people. The lack of alternatives drove him to fill the gap by developing his recipes… from his very own kitchen. 

At the time, it was challenging to find products. I joined a meetup group for vegans in Tokyo and realized how everyone had a hard time eating according to their dietary choice. So, I decided to experiment in my kitchen and got the idea to use konjac and soy protein as a substitute for meat. My first version of a vegan patty was successful!

So successful in fact that he applied for and obtained a production patent for his konjac-based “T-MEAT”. Based on the same patented technology, he has also developed vegan sausages under the brand name MARUDE Sausage and is currently developing other meat-substitute products.  The company also sells other meat-substitute products such as the Marude Chik’n (nuggets & fillet type), Marude Cheese (block cheese), and a tempeh-type product.

Believing in the quality of his meat substitute, Ike Nakayama first started with a food truck business. He rented his first vehicle for a year, going to Farmer’s Markets and local food festivals. To do so, Ike Nakayama needed to obtain authorization from the organizers and obtain the license to sell food, which is prefecture-based. 

In parallel, he partnered with a manufacturer in Gumma Prefecture, which helps with product development and manufacturing. While he outsources the production of his sausages there, his minced meat is still handmade from his professional kitchen. Terra Foods has an online shop and also sells products on Amazon. 

When I started my business, there was nothing on the market. A company backed me up and sponsored my food truck business. Today still, the market in Japan is small, though it’s growing slowly. People can find more options when eating out. 

In September 2020, with two other partners, Ike Nakayama opened the Terra Burger and Bowl Cafe in Daikanyama, an upscale neighborhood of Shibuya Ward, also nicknamed the Brooklyn of Tokyo. Opening in the middle of the pandemic, as Japan went through states of emergency, gave him pause. But life and business eventually have to go on. At his cafe, a large portion of the clientele is vegan or vegetarian, but some come for the experience. 

I would say around 30% of our clients are not vegan. They come to the cafe out of curiosity. They want to experiment and give plant-based foods a try. 

Veganism is still misunderstood in Japan.

With only a tiny portion of the Japanese population vegan, Terra Foods’ target market isn’t limited to vegan consumers but includes mainstream consumers, too.

The vegan consumers will always find my products. It’s easy. For my company to thrive, I’m aiming at the general population. I need to convince meat-eaters, people curious about alternative foods, and those becoming flexitarian. 

An approach very similar to Gâteaux de Voyage and EECO, for whom the objective is to provide suitable products for everyone regardless of their diet. In our interviews with these companies, we noticed that they even want to stay away from veganism. They develop and sell 100% plant-based products but would rather have them labeled healthy and plant-based rather than vegan. Because for a long time, veganism was perceived as too extreme by Japanese people.

A few years ago, when I would tell people I’m vegan, I faced relatively adverse reactions. Veganism was badly perceived, plus Japanese people love meat! People also wondered if I was religious but I would tell them I do it for my health and environmental reasons and usually ending up with puzzled looks.

I feel there’s an education problem on what veganism is and what it entails. But there has been some progress. Today, when I tell people I’m vegan, they ask me more questions than before. 

No wonder then that the mix-up between plant-based and vegan is a common issue in Japan. The lack of a clear label makes things difficult. Vegan consumers rely on word of mouth and the community to fact-check products available on the market. We mentioned multiple times how some products made in Japan are advertised as plant-based but do contain animal ingredients. The industry should embrace transparency to help consumers understand more clearly the difference. 

Many big companies launched new products in the past years, and they’re presented as plant-based or soy-based, but in fact, they contain eggs. You also have this brand that’s advertised as zero meat, but it’s deceptive for the consumers. 

In the tourism industry, however, veganism is very much on the radar of businesses. The plant-based revolution in Japan has been partly fueled by the tourism boom the country experienced in the last decade. In addition, the Olympic Games scheduled for 2020 had notably pushed food manufacturers, restaurants, and hotels to look into providing more plant-based products. Thus, while the pandemic significantly disrupted the industry, the hospitality industry is turned toward the future.

We get inquiries from hotels that are interested in our products. They know that they’ll have to cater to customers with dietary restrictions when the borders open again. So, they’re preparing for that.  

The demand for plant-based cheese is not there yet.

Terra Foods sources its vegan cheese from a large manufacturer and is marketed under the MARUDE Cheese brand name. MARUDE Cheese is one of the rare options on the market, next to Beyond Tofu, Vegetive, and Marin Foods. 

I receive some excellent feedback from our customers. It is a very neutral-tasting and versatile product that you can use for many things.

Most plant-based cheeses are very good for cooking — some not so much for eating raw because the soy flavor takes over. But melted on toast, pasta, or pizza, they’re good enough to pass for conventional cheese.

However, contrary to overseas markets, the plant-based cheese category in Japan is a niche, and the growth remains uncertain. In the past months, large companies have launched new products and visibly invested in research and development. But if asked, most Japanese consumers are still pretty much unaware of alternatives to conventional cheese.

Sales-wise, Terra Foods didn’t notice a particular craving for its Marude Cheese, at least not now. But the product found its way on vegan blogs and in the community for sure.

I haven’t noticed an increase in the popularity of our plant-based cheese. I focus a lot on new product development, and we will restart our food truck business this month. So perhaps, I have not pushed the marketing as much as I should. But I feel the demand nor the awareness is not there yet to invest in an aggressive marketing strategy. Maybe it will grow in the future. 

The plant-based cheese category is a difficult one. The most popular recipes are based on nuts, notably cashews, which would make any product for retail too expensive due to the production cost. But Ike Nakayama is taking on the challenge to develop its own plant-based cheddar cheese, as the need came up with the success of its Terra Burger and Bowl Cafe. 

I started developing a vegan cheddar cheese after our cafe manager requested such a product for our burgers. Nuts are the most popular base for home recipes, but that wouldn’t be viable financially for a company. So, I’m working on a new no-nuts cheese recipe. Hopefully, I can launch my product in the next couple of months. 

On top of coming up with a new vegan cheese, Terra Foods has released a 2.0 version of its Marude Sausage and is looking into a vegan chorizo-type as well. Ike Nakayama noted that large companies purchased sample products from Terra Foods, most likely for R&D purposes. 

I wish I had more competitors in Japan, but the market is still small. The number of products available is limited, and they’re not great, at least not yet. So we can’t compare the growth with what’s happening in North America or Europe. I’m currently searching for a good bacon alternative I could import to Japan, as this is missing. 

See you next Tuesday! 

Next week, we will share a terrific interview with Vera Tinkova, founder and CEO of CheeseThe Queen, a vegan cheese start-up founded in 2017.

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