What would be an ideal career for a handsome soccer star after retirement?
A celebrity sports commentator, a luxury fashion ambassador, maybe an actor—although he could have chosen any of these, Hidetoshi Nakata decided to take a very different path: revitalizing the Japanese traditional sake industry.
He was a midfielder in the Italian Serie A and the English Premier League for eight seasons in total and played for Japan in three World Cup tournaments. (Also, he has been known for being into fashion and has attended runway shows regularly.) After the 2006 World Cup in Germany, Nakata retired from playing soccer in the global arena.
“Since I was born, living a life meant doing what I loved. I fell in love with soccer at a very young age and I was lucky to be able to pursue my passion to the fullest up to my retirement,” he says.
When he left soccer behind him at 28, he had to find a new purpose.
Pondering his options, Nakata decided to travel around the world for inspiration. “Everywhere I visited, people asked me about Japanese culture but quite often, I could not answer their questions. I left Japan at 21 to play soccer, dreaming about life outside Japan without understanding what my culture was.” He realized that, on a global scale, he was just a person from Japan before being Hidetoshi Nakata.
To solidify his Japanese identity, he began visiting different regions of the nation and immersed himself in its rich culture and traditions. His journey continued for over seven years.
It sounds like a luxurious pursuit of new life by a former athletic star. But if you speak to him, you will soon know Nakata is extremely logical, practical and serious. It was the time necessary for him not only to understand Japanese culture but also to figure out how he could support it as an entrepreneur.
By the way, there is an episode about his logical mindset. One day, his teammate saw Nakata kicking a soccer ball over and over. He asked Nakata what he was doing. Nakata said, “I don’t think kicking a ball does not mean kicking it with your foot. It is about kicking it with which toe. I am trying to figure out which toe can generate what speed and at what angle.” He was only an early teenager.
Supporting The Endangered Tradition
Among many discoveries throughout his seven-plus year journey, Japanese sake particularly caught his attention and he visited over 300 producers in total, which is about a third of the total operating breweries.
“There are most amazing crafts and agricultural products all over Japan, but I was especially fascinated by the uniqueness of sake. It is distinctively Japanese, made with the Japanese national mold koji for the last 2000 years. I thought sake deserved much more global attention,” he says.
Japanese sake has been increasingly popular overseas and 2021 recorded the highest number of sake exports both by value and by quantity: the value increased by 560% and the quantity by 268% since 2009. Still, the market share of Japanese sake in the U.S., which imported 24% of the total, accounted for a mere 0.07% of the alcoholic beverage market.
Nakata found critical issues in popularizing sake overseas. “For example, one day I truly appreciate the taste of sake at a brewery. Then I go to a restaurant abroad and order the same sake, only to find that it does not taste anything like what I enjoyed at the brewery,” he says.
This is very concerning for the sake industry. Sake production peaked in 1973 and its domestic consumption has rapidly declined since then due to a labor shortage and the increasingly competitive beverage market as well as the younger generations’ new lifestyle of drinking less alcohol. There used to be 4,000 breweries in the 1960s but now the operating breweries are said to be down to around 1,000. The industry needs to find a way to survive urgently. And clearly, opportunities exist overseas.
These remaining sake breweries are fully aware of the pressing situation, but the majority of them are small, family-owned businesses—they have been busy serving the local market for centuries, focusing on producing high-quality sake. That’s why many of them don’t have a website even in Japanese.
Here is where Nakata found his new purpose in life: to build an infrastructure for craft sake breweries to successfully enter the overseas market.
In 2015, Nakata founded JAPAN CRAFT SAKE COMPANY to execute his ideas.
Sake Block Chain: The Highest Quality From The Brewery To The Table
Unlike the notorious, factory-made cheap sake that may be used in sake bombs, the craft sake made by traditional breweries is extremely sensitive to the environment such as temperature and light. Also, sake has a short shelf life unless it is made for aging. These are unknown facts to many vendors outside Japan and you may have seen sake bottles on the shelf in scorching sunlight and stay there for weeks, if not months.
To bring the highest-quality sake abroad, Nakata came up with the concept of the Sake Block Chain.
It is the logistics to trace and record each sake bottle through the entire distribution route from the brewery, the exporter, the importer, the warehouses in-between and to the final destinations such as retailers and restaurants. Sake remains refrigerated seamlessly throughout the route in temperature-controlled containers at -5°C/23°F and each step is easily operated by scanning a 2D code.
In addition, Nakata developed a sake cellar for the final destinations like restaurants and hotels to keep the products in the best conditions.
This whole system allows participating breweries to see crucial details on a screen in real-time, such as the current temperature of each bottle and the inventory level at a certain restaurant; without the Sake Block Chain, the breweries would lose control of their products the moment they leave their facilities. The system can also prevent unauthorized transactions like bootleg products, thanks to its traceability.
“Also, these data become an effective marketing tool for evaluating the brewery’s strategy and planning what type of sake and how much of it to be produced, for instance,” says Nakata.
Takuya Shimomura is the vice president of Kuramoto U.S., the marketing arm of JCTO JAPAN, a sake exporter. He says, “Temperature control is the key issue to our business. We have managed to distribute sake fully refrigerated since JCTO was founded in 2009, but the traceability of the Sake Block Chain is novel. It would be very beneficial for all craft breweries as well as to consumer trust.”
Creating a new infrastructure is not easy though.
Nakata is working closely with distributors abroad who understand how to deal with premium products like top Bordeaux wine bottles. ”We need to cultivate a reliable network of these distributors, but we cannot simply ask them to distribute sake in a refrigerated container, which costs them extra money. Instead, we treat them as our business partners and provide them with marketing and branding support.”
Currently, the Sake Block Chain is operating only in Asian countries like China, Hong Kong, Taiwan and Korea. ”The European beverage market is dominated by wine and the U.S. has the famously complex three-tier distribution system. We will stabilize our operations in Asia first,” he says.
Update The Mindset Of The Sake Industry
Another major issue for the sake industry is pricing. “Craft sake breweries have been making affordable sake for their local community for centuries. As a result, the prices are based only on material and labor costs, keeping the margin as low as possible,” says Nakata. According to the Japanese government, 70% of these breweries are making a loss or only made a small amount of profit annually.
This low-profit pricing structure has been weakening the industry domestically, but it can be redesigned in the new market abroad where the breweries do not have to carry the history of low prices.
“If the traditional sake breweries start including additional costs such as PR and marketing, just like any other branding-heavy alcoholic beverage products abroad, the industry could revive themselves financially,” says Nakata. He gives breweries advice on how to price sake more appropriately to operate sustainable businesses in the export market.
As a sake connoisseur, Nakata did not miss the demand side of the market. He has developed an application called Sakenomy, which allows users to easily find key information about sake, such as sake types and flavor charts. “Hopefully the application will help consumers to deepen their interest in sake and lead to their further consumption of sake,” he says.
Before COVID-19 hit Japan, Nakata organized the Craft Sake Week three times since 2016 and introduced sake to a wider audience in the domestic market, often featuring breweries damaged by natural disasters. These events gathered 600,000 participants in total. “The operations of the Craft Sake Week were at a loss, but the events were effective in raising consumers’ awareness about the value of Japanese sake. Also, importantly, the events were great opportunities for the participating breweries to learn how to promote sake to a wider audience and younger generations,” he says.
‘I am doing this because I love doing it.’
Can Nakata transform the sake industry through all his efforts?
“I have devoted my last 10 years to find ways to support the sake industry. And I have not made any money,” he laughs.
“I am doing this because I love doing it. It just does not feel right to do something simply for making money or for reputation.”
Perhaps, just as when he was a soccer player, these material things will naturally follow. Nakata is hoping to launch the Sake Block Chain as a for-profit service more widely sometime in 2023.
Then what’s next for Nakata?
He has already started working on Japanese tea. The tea industry is facing similar issues to the sake industry.
And he is likely to keep finding his new mission. According to the Japanese government, traditional craft industries are declining extremely fast. The production of craft products like ceramics, lacquerware and fabrics peaked in 1983 at $3.8 billion and now the number is less than a fifth.
Nakata’s new career is expanding too. He is now a faculty member at Rikkyo University, teaching marketing in traditional craft industries.
“I am providing a space for the next generation to explore what they can do to support traditional Japanese culture. I am learning from their fresh perspectives too,” he says.
Sounds like he will not face retirement ever again.
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