Torikizoku (鳥貴族), a Japanese izakaya restaurant, recently crossed the sea to Taiwan. All items are priced at NT$ 100 each, which is about 22% more expensive than Japan's 360 yen. Following the opening of the first Torikizoku store in Taiwan in September, the second Torikizoku store also officially opened on the 1st, located at ATT 4 FUN in Xinyi, Taipei, open until 12 midnight.
Han Jiayin, vice president of DaChan Group, once stated that he will continue to open stores in the future, with the goal of opening 3 stores by the end of 2024; he plans to expand the territory at a rate of 4 to 5 stores per year.
The Torikizoku store has a relaxed atmosphere, a wide variety of skewers, and affordable prices. It has become a must-visit place for many people in Japan. However, from the perspective of consumers, the skewers business of Torikizoku seems good, but in fact skewers is not an easy business in the catering industry. The movements of the Torikizoku in recent years illustrate this point.
We can't return to the glory we had 6 years ago! The helplessness and dilemma behind Torikizoku: Consumer habits can't go back
There are many factors that affect the operating foundation of the catering industry, and business model decline factors will occur within a few years. From the turbulent turnover of Torikizoku from 2017 to 2023, we can know the difficulties faced by catering companies.
In 2017, due to rising material costs, logistics costs, water and electricity costs, Torikizoku adjusted the average price of all products from 280 yen to 298 yen. This resulted in a continuous decline in the number of customers, and the turnover of existing stores began to decline in October of that year. In July 2018, compared with the peak period from March to May in 2017 before the price adjustment, the turnover was about 10% lower. Until July 2019, compared with the previous year, it had only "recovered" to about 96%.
By October 2019, Torikizoku encountered an epidemic again, and the sales of existing stores fell to the bottom again. In July 2021, only 30% remained compared with last year. Even by 2023, it will not be easy for the operations of Torikizoku's existing stores to surpass the situation before 2017.
Why can't existing stores of Torikizokus significantly exceed their 2017 sales? In addition to price adjustments in recent years, skewers restaurants in Japan also have the element of "izakaya". When consumers' living habits such as drinking and dining together cannot return to before the epidemic, new outlets must be found for sales to return.
Strategy 1: Use "uniform price" to create differentiation and strengthen economies of scale through mergers and acquisitions
The skewers industry is basically a "defensive" business. Compared with its peers, it is more difficult to differentiate its products. Of course, skewers can also differentiate their products, but compared to the Chinese restaurant business, Chinese restaurants have a wide range of cooking techniques, from Dongpo pork, sweet and sour pork ribs, roast duck, etc., so it is more difficult to differentiate skewers products. , basically roasted.
One of the characteristics of defensive business formats is to compete with competitors through prices after controlling costs. When product differentiation is difficult, without considering service and atmosphere, the most intuitive thing is to use price to make the difference. The most reassuring thing about Torikizoku is that it adopts a uniform price. It is relatively easy for customers to calculate the consumption amount, with less psychological burden and a greater chance of return.
In addition, in order to stabilize uniform prices, maintain a sense of scale, achieve cost reduction and resource sharing, establishing economies of scale is the key to maintaining differentiation.
Therefore, in 2023, Torikizoku bought the Yakitori Daikichi brand with 520 stores from SUNTORY. Combined with Torikizoku's 622 stores at the time, it instantly became a giant yakitori group with more than 1,000 stores. The group has consolidated the scale and strength of Torikizoku and continues to maintain differentiation.
Strategy 2: Remove the three characters "Torikizoku" from the company name, and not only bet on the "skewers" category
There is still some way to go before Japan's izakaya industry recovers to where it was before the epidemic. Life styles have changed after the epidemic, gatherings and dinners have decreased, and alcohol consumption in Japan has hit record lows. In Heisei 5, Japanese adults still consumed nearly 100 liters of alcohol a year, but by the Reiwa era it had reached a "new low" of 75 liters. This major change in consumer culture has also led Tori Noble to actively change the company's image as a izakaya-based company.
The most fundamental change is that in May 2024, Torikizoku changed the company name from "Torikizoku Holdings Co., Ltd. (株式会社鳥貴族ホールディングス)" to "Eternal-hospitality Group Co., Ltd. (株式会社エターナルホスピタリティグループ)"
The official statement is to move towards internationalization. It is easier to understand with the English "Eternal-hospitality" than the Japanese "Torikizoku (鳥貴族)". This explanation is very reasonable. In addition, the market speculates that the removal of the words "Torikizoku" may also be to let everyone know that in addition to skewers, Torikizoku has other good products and brands. This may be related to overseas cultural consumption habits.
Although skewers (Yakitori) are a part of Japanese food culture, Japanese consumers do not consume them every week. Therefore, in the menu of Torikizoku, you can still see ramen, rice and other products of different categories, downplaying the image of only skewers. , so that even customers who don't like skewers can enjoy peripheral products and shorten the frequency of store visits.
The Japanese market, which has a skewering culture, will strengthen peripheral products because of concerns about consumption frequency, let alone overseas markets. In order to shorten the cultural distance, in addition to strengthening peripheral products, developing other business formats such as burgers should also be one of the directions for Torikizoku to adjust the brand atmosphere in the future.
In Taiwan's skewers business, except for high-priced skewers, affordable skewers shops, such as the previous skewers and fried shops, have found it difficult to expand their operations in Taiwan. How to find the best ratio between the number of skewers and peripheral products and increase the frequency of consumption are the key breakthrough points for the skewers business in overseas markets.
It is hoped that Torikizoku can overcome the difficulty of operating skewers in multiple stores in Taiwan in the past, and bring more diversified dining options to Taiwanese consumers. Now you can eat Torikizoku without going to Japan, which is a little joys for Taiwanese consumers who like Japanese food.
