Meet The Japanese Noodle Billionaire Taking On McDonald’s And KFC

Forbes

Takaya Awata parlayed a tiny local diner into quick-service giant Toridoll Holdings. Now he wants to taste global success.  Read the full story on Forbes: https://www.forbes.com/sites/zinnialee/2024/09/08/meet-the-japanese-noodle-billionaire--taking-on-mcdonalds-and-kfc/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.Forbes,Forbes Media,Forbes Magazine,Forbes Digital,Business,Finance,Entrepreneurship,Technology,Investing,Personal Finance,mcdonalds,kfc,instant noodles,instant noodles fast food,rising fast food chains,Takaya Awata,Toridoll Holdings,Zensho Holdings

Transcript

00:00Today on Forbes, meet the Japanese noodle billionaire taking on McDonald's and KFC.

00:08When Takaya Iwata used his meager savings to open a small restaurant in Kakogawa,

00:13a coastal city off Japan's Seto Inland Sea, the then-23-year-old named it Toridol Sanban Kan,

00:21or Toridol Store No. 3. It was a promise to himself that stores No. 1 and 2

00:27were only a matter of time, and he would soon achieve his modest goal of owning three restaurants.

00:33Four decades later, Iwata's Tokyo-listed Toridol Holdings has a network of nearly

00:392,000 quick-service restaurants across 28 countries and regions, covering 21 brands.

00:45The flagship is Marugame Seimen, Japan's largest udon noodle chain, by both revenue and store count.

00:54The entrepreneur's fast-food success has made him a billionaire and honed his ambitions.

00:59At his headquarters in Tokyo's Shibuya district, the 62-year-old president and CEO says,

01:05quote,

01:06I would like Toridol to compete on a global scale.

01:10He adds that he's aspiring to make it a 1 trillion Japanese yen, or $7 billion,

01:16company by revenue in the next decade.

01:19To achieve those lofty targets, Iwata wants to reduce Toridol's dependence on domestic diners

01:25in a shrinking home market and focus on overseas expansion.

01:30The global quick-service restaurant industry grew at a compound annual growth rate of 5%

01:36between 2019 and 2023 to more than $1 trillion,

01:41the fastest-growing sector among the overall food service market.

01:45This, according to an email from Tomaso Nastassi, a Milan-based partner at consulting firm Deloitte.

01:52But in Japan, which is facing the challenges of a graying population,

01:56fewer full-time jobs, and stagnant wages,

01:59restaurant operators must also grapple with rising costs and worker shortages.

02:04Japan's food business is intensely competitive, Iwata notes.

02:09To grow domestically would mean snatching market share from rivals such as Hanamaru,

02:14the local udon chain owned by the more-than-century-old beef bowl giant Yoshinoya Holdings,

02:20and Tokyo-listed Zencho Holdings, best known for its affordable Sukiya Beef Bowl chain,

02:25founded by fellow billionaire Kentaro Ogawa.

02:29Toridol also has to contend with American juggernauts such as McDonald's and KFC,

02:34which between them operate over 4,000 stores in Japan.

02:38The competition for diners comes not only from other restaurants,

02:42but also convenience stores' bento box lunches and rice balls,

02:46as well as supermarkets' ready-to-eat meals,

02:48according to Tokyo-based Daiwa Securities analyst Shun Igarashi.

02:53He says, quote,

02:55"...with the diversification in eating trends, companies are scrambling to get customers."

03:01Despite this, Toridol, buoyed partly by an influx of tourists into Japan,

03:06posted record revenue of 232 billion yen in the latest fiscal year ended March,

03:12with 38% generated from overseas.

03:16Net profit was up 48% to 5.7 billion yen,

03:20helped by a weak yen that bolstered repatriated profits from overseas branches.

03:26But Toridol's shares, which had been trading at high earnings multiples after the pandemic

03:30as people resumed dining out, corrected 5% in the past 12 months.

03:36Iwata, who became a billionaire last year and earned a place in the ranks of Japan's 50 richest,

03:41has a recent net worth of $1.1 billion.

03:46By March 2028, Toridol targets a more than threefold increase in net profit

03:50on 420 billion yen in sales, of which nearly half would come from outside Japan.

03:57This can be achieved, Iwata explains,

04:00by more than doubling the total store count to 4,900,

04:03of which 3,000 should be overseas branches.

04:07The company owns all but four of its nearly 1,100 domestic stores,

04:12while half of its 861 overseas shops are operated as franchises or joint ventures.

04:19Iwata says he expects overseas revenue to be higher,

04:22closer to 60% in the next three to five years.

04:26Toridol's flagship brand, known as Marugame Udon outside Japan,

04:31already has 264 stores abroad.

04:34Iwata caters to local tastes, offering, for example, spicy broth in Indonesia

04:39and cold udon bowls with salad greens and fried chicken in the U.S.

04:44For full coverage, check out Xenia Lee and James Sims' piece on Forbes.com.

04:51This is Kieran Meadows from Forbes.

04:53Thanks for tuning in.

05:01You

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