Oiso is a town located in Kanagawa Prefecture in Japan, 70km (44mi) outside of Tokyo. It has a population of just over 32,000 people and is known for the first recreational beach in Japan which opened in 1885.
While Oiso’s southern border is defined by the Pacific Ocean, it is also surrounded by an abundant natural environment with farms, hills and streams with Mt. Fuji in the distance. This diversity has allowed members of the Oiso community to make the most of fishing and agricultural industries. “Daifune” is a fishing and tourism business which has existed for over 150 years in this context.
Daifune uses a fishing technique called “jibiki-ami” where fishermen cast out a giant fishing net into the sea from a boat. In this labor intensive process, preparation of the nets and boat begin an hour before sunrise. Once the boat is pushed into the ocean from the shore, the net is initially pulled to shore with two machines pulling ropes on each side of the net in parallel, until the net is exposed from the sea and most be pulled by individuals on each side of the beach. The net must be pulled towards the shore and inwards towards each other delicately during this entire time. Otherwise, the net will narrow too quickly, causing the fish to get scared away. Once the net is fully on shore, the catch of the day is emptied out into large bins.
As a participant in “Daifune’s” fishing activities each time I return to Japan, I wanted to take this opportunity to unravel its current model, its history and what can be done going forward. As you will see, it is a very small and local business. Hopefully, it is an interesting case example for how small traditional businesses can be incredibly agile but also suffer from severe resource constraints and its macroeconomic context.
Traditional (>35 years ago)
Historically, Daifune obtained its revenues purely from selling fish such as horse mackerel, whitebait, barracuda at the local markets. Anecdotally, annual revenues exceeded 1 million yen (approximately 81K USD).
As mentioned previously, “jibiki-ami” is a labor intensive activity. Four decades ago, local citizens split their time between the farm and sea to generate income from both activities. Children would also help on their way to school in exchange for pocket money. In terms of capital expenditures, each year Daifune spent a sum of money to maintain the boat (and engine, eventually), fishing nets, warehouse and truck to transfer fish to the market.
Today, the business model has shifted dramatically. Gone are the days where the fisherman takes the fish on the marketplace—now the primary sources of income are tourism and participation in seasonal events which combined make up 55K USD. This shift is driven by a number of factors, including 1. Dramatic decrease in volume of fish in the ocean captured through “jibiki-ami” techniques, 2. Increased demand for experiential activities among the Japanese public.
“Jibiki-ami” for tourists began to emerge as early as 30 years ago once or twice a month. In the present day Daifune hosts nearly 45 groups annually. The operating model has evolved accordingly, with the Daifune team focusing significantly more on hosting and entertaining the tourists, including preparation of meals and food for the 20-250 visitors in each group. The meals, including mountains of tempura, miso soup, rice, and sashimi are prepared predominantly by the fishermen’s wives, in a wooden shack outdoors with basic sanitation. Meanwhile, the Daifune team must continue to operate the “jibiki-ami” fishing for the tourists. Despite the additional labor from the tourist group, the burden for the Daifune team has increased significantly under the new business model.
Challenges going forward
Despite the fact that the contemporary business flow brings value to tourists, the Oiso community and some positive cash flow to Daifune, it is challenged in the following dimensions:
- Low supply of labor: The contemporary operating model is significantly more labor intensive than before. Unfortunately, labor supply has not kept up with demand from the tourists
- Sustainability: Oiso is an aging community, with the majority of Daifune members now in their 70s and 80s. There are concerns as to how Daifune’s operations can continue to grow going forwards
- Health / sanitation compliance: Daifune has not faced major issues regarding health / sanitation compliance to date, but it is not clear if the organization is prepared to handle PR / legal issues, if they emerge
In sum, the evolved business model has been a success to date, however, the long-term viability is questionable.
Interview with Hiroshi Nakategawa, Daifune