Kyokuyo America seeks to expand US sales of its “TUNAGU” closed-cycle farmed bluefin tuna

Published on
May 13, 2019

Japanese seafood company Kyokuyo Co. has expanded the U.S. distribution of its marquee closed-cycle farmed bluefin tuna. 

After working to perfect its processes for the past two years, the Tokyo, Japan-based firm is now producing 150 metric tons of egg-to-table farmed bluefin, with plans to increase the target production volume by 200 MT anually.

With Kyokuyo just one of a handful of companies globally that have mastered the art of closed-cycle bluefin tuna farming – considered the “holy grail” of aquaculture due to its difficulty and the high value of the species – the firm’s processes are still mostly kept secret, Toshimitsu Hishinuma, the president of Kyokuyo America Corporation, told SeafoodSource.

“The people behind the process dedicated over 30 years to researching and developing the process, which was leaded by aquafeed-maker Feed One,” Hishinuma said. “There were many difficulties along the way, but now we are proud to make this special product available to U.S. consumers.”

Kyokuyo started as a seller of wild-caught tuna, and moved into tuna ranching, where juvenile tuna are caught in the wild and reared in net-pens until they reach a harvestable size, in 2007. The company took up tuna-farming as wild resources become less plentiful and harder to find, Hishinuma said. Since 2012, Kyokuyo has collaborated with aquafeed-maker Feed One to operate a closed-cycle bluefin farming joint venture, with operations located in Kochi and Ehime prefectures in the south of Japan. Kyokuyo shipped out its first closed-cycle bluefin in November 2017.

Today, all tuna sales represents about 11 percent of Kyokuyo’s company sales, with closed-cycle bluefin representing a small portion of their company’s total tuna sales. All in all, for a company with USD 2.6 billion (EUR 2.3 billion) in sales in 2018, it’s not a large portion of its total business, but Hishinuma said it has outsized importance for the company’s management due to its symbolism as a marker of innovation and of its drive to create a more sustainable industry. 

“It’s a very desirable project for our company,” he said. “The project burnishes our company image, and that helps our other business.”

The project has been costly and Hishinuma said it has yet to turn a profit. Figuring out the composition of the aquafeed given to the bluefin – one that they were willing to eat, contained the correct balance of nutrition, and that gave the fish’s flesh the correct taste and color – was the most difficult part, he said. 

“It was really tough to figure out specialized feeds for each stage of growth, from when the fish are one inch [long] to when they get to be over 150 pounds,” he said. 

In the first month of being put into ponds, the baby bluefin are fed every hour, 24 hours a day, for 30 days. Even with every care taken, only 0.1 percent of the fish from the eggs survive to reach a harvestable age, which takes around four years.

The exact formula of the feed remains a company secret, but Hishinuma said it contains a combination of mackerel, sardine, and soy. The company is still working to improve its feed with the goal of reducing the fish-in, fish-out (FIFO) ratio of raising the bluefin. The global average FIFO ratio for farmed tuna is around 15:1, he said, while declining to specify the FIFO Kyokuyo has achieved with its closed-cycle bluefin.

“The impact is lower than it has been in past, and we’re continuing to work to lower that rate and aim to improve the technology so that we created less damage to the wild stocks and less impact on the environment,” Hishinuma said. “In addition, we are always working to reduce the cost and to improve the efficiency, and with this process, we are able to control so much more of the process, so I am sure we will be able to work to lower both the amount of wild fish used as well as the costs of the operation.”

The company has branded its closed-cycle bluefin as “TUNAGU,” a name that was chosen carefully, according to Kyokuyo America Sales and Marketing Manager Tatsuri “Tadd” Miyazaki.

“TUNAGU means ‘connect’ in Japanese,” he said. “It is our hope to connect to the future, the next generation, the future of the resource, and sustainability with this product.”

The tuna is sold to high-end department stores and sushi restaurants in Japan, but the company has chosen to center its marketing strategy on the United States, Miyazaki said.

“We believe people in the United States are better able to understand the value of the sustainability of this tuna,” he said. “Overall, they are more understanding than Japanese people regarding sustainability. [Americans] love bluefin tuna but it is likely many avoid eating it or minimize their consumption because of these concerns. But when we can say that our tuna is 100 percent sustainable, it makes them more comfortable and they are willing to buy it.”

Miyazaki said the tuna sells at a premium to wild-caught bluefin and ranched tuna but that, “People are willing to pay a premium for this product.”

“We don’t think our fish is priced too high,” he said. “For the work that goes into it and the concept of sustainable qualities it has, we think it is very reasonable.”

Working through the distribution company JFC International, Kyokuyo now sells TUNAGU in a handful of U.S. cities on the East and West coasts, including New York, San Francisco, and Seattle, where it has offices. Small amounts are also being sent to San Diego, Los Angeles, and Miami, Miyazaki added.

“We want to reach more places in the country – we know there is great potential [in places like] Chicago, Atlanta, Dallas … but we’re just learning how to sell and testing it out in a few beginning areas.”

Sandra Bardsley, also a sales and marketing manager at Kyokuyo America, said in recent sales visits, she has seen “interest really blooming.”

"In New York and San Francisco, customers are really into the sustainability aspect of the fish - those two markets have been the strongest for us. Lately, Seattle is becoming stronger, too,” she said.

She said the company’s U.S. offices have always been able to sell every bit of TUNAGU coming over from Japan. It’s primarily sold to high-end sushi restaurants, including the Teisui and Zenkichi omakase restaurants, but it can also be bought in retail locations in New York, including the Japanese specialty food store Katagiri.

“We don’t have any extra fish,” she said. “Granted, it’s a very small amount, but with more product coming through, we don’t foresee a problem selling it, as we’re getting more and more interest in it. We see this as a product with high potential and we feel like there’s plenty of room for growth.”

Bardsley said the company has expanded slowly, often doing exclusive tasting events or bringing the TUNAGU into individual restaurants for the executive chef to try. 

“We want them to be able to see and taste the difference and understand the closed-cycle and how it would resonate with their customers. When we’re able to present it like that, it does tremendously,” she said.

Hishinuma said being able to offer closed-cycle bluefin tuna showcases the company’s commitment to sustainability. Besides being inherently important on its own, it also plays a key role in Kyokuyo’s overall sales strategy in the United States.

“Right now, the Japanese seafood industry is starting and working harder to improve [its] sustainability credentials," he said. “In the past, Japanese people have not cared as much about sustainability, but their global environment concerns are rising. Our company, with over 80 years of seafood history, is intimately aware that the future of the seafood industry requires a more sustainable approach. We are hoping this bluefin tuna plays a part in that in both the U.S. and in Japan, and eventually worldwide.”

Profits are secondary to this goal, Hishinuma said. 

“Of course, we want to increase the quantity of closed-cycle bluefin we farm and sell, and we hope we can get to profitability with this product,” he said. “But regardless, we believe it’s a very good decision. It’s the right move, because farming will be increasingly shaping the future of the seafood industry. The next 10 to 20 years will be key to the future of aquaculture and it shaping the seafood industry overall, and we think this bluefin project is a very important part of that transformation.”

Photo courtesy of Kyokuyo Co.

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