What’s on the menu at Mitsui today?
In the middle of Taipei city sits a 2000 sq ft modernized outdoor fish market with clean space, warm lighting, and the freshest seasonal seafood that you can get. Mitsui is a Japanese-style high end restaurant chain that only operates in Taiwan. Its seven stores generate more than US$ 70mn revenue a year, and have become the favorite go-to place for tourists, celebrities, and politicians. With only an elementary school education, the founder Huang has grown his business from a little food stand in the corner of Taipei to the hottest dining spot in Taiwan. His secret lies in the relentless pursuit of quality, unique and differentiated restaurant branches, and an extraordinary dining experience.
Business Model
High Quality Ingredients at a Reasonable Price
The biggest differentiation of Mitsui vs its competition is the quality of the ingredients they use in their dishes. Mitsui sources the highest quality ingredients directly from production site and delivers it fresh to the restaurant. The chefs use very simple seasonings to bring out the flavor of the fresh and all-natural seafood. You can taste the sweetness and silken texture of a scallop sashimi that only exists in its freshest state. While the average spend per meal is around US$ 6 in Taiwan, Mitsui’s multi-course meal ranges from US$40 – US$ 130. But people still find the meal fairly priced as they would need to pay at least double the price at other restaurants for the same quality. Moreover, the price of a meal is set such that it is no more than double its cost, to make sure the restaurant delivers a fair value to the customer.
Menu-Less Seasonal Craze
In Mitsui, there is no menu. It has been serving its diners an ever-changing seasonal meal using the freshest ingredients available on that day. Customers choose a price level and explain any dietary restrictions, the rest is in the chef’s capable hands. Mitsui leverages its menu-less flexibility and seasonal ingredients to create the best meal possible, and customers receive the surprise of finding out what they are going to have only when the meal is served.
Unique and Differentiated Branch
Mitsui is extremely selective in expanding its branches- the number of stores are limited and every single restaurant has its unique theme. Its seven branches include an art-inspired Japanese cuisine, a standing sushi bar in a wholesale fish market, and an ancient Kyoto style cuisine. To bring the consumer an extraordinary experience, Mitsui has a dedicated Creative Director who is in charge of creating an integrated dining experience from dining ware to the interior design of the restaurant.
| Art Inspired Japanese Cuisine | Wholesale Fish Market | Standing Sushi Bar |
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Operation Model
Vertical integration
To get highest quality fresh ingredients with the fastest delivery at the lowest cost, Mitsui entered the wholesale market to work directly with production suppliers around the world. Sourcing sites include Japan, Russia, Norway, and USA. Mitsui’s wholesale market not only supplies its restaurants, but also provides an alternative for urban consumers to purchase fresh seafood.
Menu-less Operation
To emphasize freshness in his restaurants, Huang invented the “served by ingredient” model where there is no standard menu for the meals served. Instead, Chefs prepare food based on current pantry stock, which is usually made up of seasonal offerings. This lowers inventor and increases asset turnover.
Innovation Center & Quality Control
Mitsui invested USD 3.5 Million on an Innovation Center. It is the central kitchen of Mitsui’s restaurants where new recipes are developed. When entering the center, employees have to wear isolation gowns and boots, pass through a 360-degree high speed fan, and stand under sterilizing ultraviolet light. Food preparation processes are separated in different processing zones including raw material, cold food, hot food, dessert shop, and freezer zone. Employees working in each zone wear uniforms of different colors and are prohibited to move across zones to prevent food contamination. All deliveries are weighed to ensure that the portions are consistent. The chefs take samples from each dish so that they can track the source of any quality issues. Every process strictly follows the Hazard Analysis Critical Control Point (HACCP) system.
ERP System
The Enterprise Resource Planning (ERP) system links the frontline operation with the back office. It is the best-in-class across the industry that effectively reduces operation errors and reduces cost.
Very interesting post Megan; this sounds like my kind of establishment!
One piece I’m curious about is how they make their menu-less strategy work from a process planning perspective. While I can clearly see the benefits that it would have on customer engagement and inventory turnover, I do wonder how they ensure that the day-to-day variations do not result in such large fluctuations in order turnover time that it hurts the overall experience. It also raises the question of whether the business model is scalable, given that managing this complexity will become increasingly difficult with a larger and more diffuse chain of restaurants.
Do you have a perspective on how they handle this risk?
Thanks!
I think to minimize the fluctuation of order turnover time, Mitsui standardizes the “type” of dish they would serve even though the exact ingredient of that dish varies day by day. For example, they would always serve sashimi for first course. They might use salmon for one day and tuna for the other, but the overall preparation for sashimi will not vary too much because the process of preparing different types of sashimi is similar. In terms of scalability, vertical integration of supply chain and central kitchen would definitely help as they expand. But I would say it’s less scalable on a store-by-store level because they try to keep each and every store unique, and the stores have to handle the complexity of customization. But it’s also their core strategy to prioritize uniqueness over scale, and that is the trade-off that they are willing to make.
Nice post… definitely made me hungry and eager to try it!
If you are ever in Taiwan, you definitely have to try it. It’s soooooooo good!!!
Such a cool idea- I wonder if this model can be applied to other cuisines, or if the seafood element is important. Maybe people are more picky about receiving chicken vs. steak rather than salmon vs. halibut. But overall this restaurant chain is very interesting to me because it looks like the operating model very much informed the business model.
I think that is a very good point. One thing about Mitsui is that all meals contain more than 7 courses, some even up to 10, each with a very small portion, and there is no “main course”. This definitely minimizes the importance of being able to choose what to eat as long as the dietary constraint is communicated to the chief. It also depends on the customer’s expectation. If customer walks in expecting Japanese food in general, they wouldn’t care if it’s salmon or halibut. So I would say it can be applied to other cuisines if they also adopt a multiple-courses small-portion model, and handle the customer expectation well.
Wow that sounds amazing! Know of any plans for them to expand into the US?