by Kenji Hall

[Editor’s note: More than a year after Japan’s Tohoku region was devastated by a tsunami, small local businesses are bouncing back, helped by low-interest loans and startup assistance provided through a $2 million grant from NVIDIA. This is the first in a series of profiles of businesses benefiting from the program, dubbed Operation Kizuna, after the Japanese word for “bond of love and friendship.”]

When you’ve been selling things for as long as Norifumi Sato has and have his talent for the hard sell, you recognize a good thing when you see it. From the moment a year ago when Sato reported for his first day of work at a mulberry tea company, in Japan’s northern prefecture of Iwate, “I just knew this was it,” he recalled.

“It” was Sato’s idea of running his own business – but he didn’t have the means to go it alone right away. At the time he was just thankful to have a job. Two months had passed since a tsunami had barreled onshore in Kesennuma, a port city on Japan’s northeastern coast. In an instant, Sato’s home and the shark fin croquette shop he’d run next door for more than a decade were wiped off the map.

Sato lived in a shelter for a couple of months and then moved to a cramped prefab three-room temporary home that he was sharing with his wife and his mother. Despite his precarious situation, Sato told his boss at the tea company that he planned to be around for no more than two years.

Before he was halfway there, he quit. “By then, I knew enough to do it on my own,” he said.

In April, Sato founded Kesennuma Kuwacha Co., with seed money from his and his wife’s savings. It’s a tiny operation. His office is the 78-square-foot tatami room where he sleeps and eats his meals in the prefab flat he’s called home for the past 15 months. There’s a flat-screen TV in one corner, a case with tea cups in another, a row of color-coded folders and a fax machine against the back wall. A set of plastic drawers holds a sampling of his company’s products: two types of green tea made from the leaves of a mulberry tree, sencha and mattcha, or leaf and powdered.

Export dreams for mulberry tea

Norifumi Sato of the Kizuna-Mulberry Tea Company.
Norifumi Sato, owner of Kesennuma
Kuwacha Co., inspects mulberry leaves
at a family-owned farm.

Unlike ordinary green tea, mulberry leaf tea has no caffeine or bitter aftertaste. Most Japanese think of mulberry leaves as food for the larva of a moth bred to produce silk. But Chinese medical practitioners have prescribed the leaves and berries to treat ailments for centuries.

Recently U.S. researchers have shown that the leaves can help balance blood-sugar levels in patients with type-2 diabetes, a condition that afflicts millions of Americans. Sato is counting on the purported health benefits of mulberry leaves to reach customers outside of Japan.

“There are millions in Japan who are thought to be diabetic,” he said. “And in the U.S. the numbers are several times that of Japan.” (Diabetes affects 10.7 million people in Japan, or 8.4 per cent of the population, compared to 25.8 million people in the U.S., or about 8.3 per cent of the population, according to official statistics.)

On a recent afternoon, Sato drove out to a family-owned two-acre mulberry tree farm in Kesennuma. It’s one of two farms he buys leaves from. “I need more than one farm just in case there’s an outbreak of disease,” he said.

Sato, 63, has curly, gray hair, a slight paunch and an unflagging ebullience. The afternoon sun was searing and soon his polo shirt was soaked through. As he walked up to one tree after another to inspect their leaves, he mopped at his brow with a small towel draped around his neck. But the heat did nothing to diminish his enthusiasm and he strode around the property with such purposefulness that he seemed constantly in a rush. Sato stroked a lime-green leaf larger than his hand and said: “Beautiful, isn’t it?”

For his first big harvest in June, Sato bought the leaves off half the trees on the property — about 4.4 tons. The trees grow so fast in spring and summer that Sato eventually wants to pick all the trees clean three times a year. Standing on a slope at the farm, he turned to a woman in an apron Tomoko Saito  who had emerged from the house fronting the property. “I want to be making so much tea that there aren’t enough trees here to keep up,” he told her.

She nodded. Since the end of the Second World War, her family’s organic farm had supplied the leaves for silkworm growers. But with fewer Japanese buying kimonos and the silk industry shrinking, the family had come to see their prospects as grim. “We stopped two years ago and were thinking of giving up the farm,” she said.

New tea buildiing for Kizuna-Mulberry Tea Company.
A new building, financed in part by Operation Kizuna
funds, includes storage, packing and office space.

Enter Sato. He’d heard about the Saito family’s mulberry tree farm from a friend who lived nearby. When Sato quit the Iwate tea company to go it alone, he got his friend to help him contact the family and negotiated a deal.

Multibillion-dollar drinks market
Sato now has his work cut out. He is wading into Japan’s multibillion-dollar beverage industry. Seniors are his target audience, which is ideal when you have a rapidly graying population like Japan does. But for his tea to succeed, it will have to rise above the fray in a market where 1,500 new drinks are released every year and consumers are spoiled for choice.

Still, if there ever was a perfect pitchman, it’s Sato. He has been selling things since going to work at a grocery store after high school, and has a gift for mesmerizing anyone within earshot with his stories. Before last year’s disaster, his shark fin croquettes stand was the talk of the town. “Others had been making shark fin croquettes but they were adding pork for flavor. I was the first anywhere to use only shark meat. I spent six months trying to figure out how to get rid of the strong ammonia odor,” he said. “One morning a TV show featured my shop and soon the phone started ringing and emails started pouring in, from morning till night. It took months to fill all the orders!”

These days Sato is so busy with his new enterprise that last year’s tsunami seems scarcely an afterthought. Truth is, he barely escaped with his life that day. When the magnitude-9 earthquake hit, he was across town and he raced home to find his wife and mother taking refuge on the second floor. He knew from experience that they had to get to higher ground: He was 11 in 1960 when a magnitude 9.5 quake in Chile triggered a tsunami that sped thousands of miles across the Pacific Ocean and flooded his hometown in Japan.

Sato drove the two to a designated shelter and returned to the neighborhood to warn others. As he was about to gather some things from his house, he turned to see a wave taller than a two-story building less than a block away and he sprinted to a tall building nearby, reaching the stairs just as the water closed in. From an upper floor he watched the waves demolish his home and shop.

“Unless you act, you won’t get anywhere”
Sato has already begun selling a small batch of his tea online, at outdoor markets and at local 7-Eleven convenience stores. He’s been letting TV chefs and small sweets makers use the powdered version of his tea to experiment in Japanese cuisine and desserts. “You can put the tea in rice or mix it with milk. Kids can drink it because it’s not bitter,” he said. “I’m just trying to see how many ways it can be used.”

The leaves he picked in June will be ready to sell in September. But he’ll need someplace more spacious than his own tatami room to package it. Thanks to a grant of 1.5 million yen ($19,000) from NVIDIA, administered through PlaNet Finance Japan, Sato will be able to pay for part of a new building, which Samaritan’s Purse, a U.S. relief organization, has sent volunteers to help put up. When finished in the coming weeks, the building, located on his sister’s land in Kesennuma, will have a storage room, packaging and labeling machines and office space.

“Not many people know about mulberry leaves and teas. It’s all about how you market these products to consumers,” he said. “We think the Internet is the best channel and we want to take this overseas. We are already talking with Japanese grocer Uwajimaya in Seattle!” He chuckled and added: “To other people it might seem pretty aggressive. But for me it’s just common sense. Unless you act, you won’t get anywhere.”