 Welcome to International Hawaii. I'm your host Cindy Matsuki. International Hawaii showcases local import and export businesses to help others new to the industry. It's such a complex industry. So the more advice we can share, the better. Today, my guest is Chris Pierce, founder of World Sake Imports. They're a local import company and an FTZ-9 tenant. Hey, Chris. Thanks for joining me. Thank you. So I wanted to ask you about World Sake Imports. Could you briefly tell me when and how you got started? Well, you know, Hawaii has a deep history with sake. And the first sake brewery outside Japan was made in Hawaii in 1908. Yeah. And it was the leading business of the Japanese community here before the war. And after the war, it started up again. And they were lucky enough to have an amazing technician, research technician come from Japan to help them learn to make sake again. And it kind of like thrived after the war. And it kind of like generated a sort of a community of sake lovers, you know, the sake drinkers. I was actually the founding member of the International Sake Association in Hawaii in 1984 was when it started. And through that, I got to know Nihesan. And you know, we would have events and we would bring sake back from Japan and we would enjoy it, you know, and think it was great. But we could never get sake like that in Hawaii. The regular importers at that time, they just won't eat that kind of sake here. They would usually ship it to LA in an unrefrigerated container and it would stay there and unrefrigerated warehouse. And by the time I got to Hawaii, it was in bad shape. And I would just sit in a warehouse here. So, you know, sake is quite delicate, so you can't treat it that way. And so I kind of got the idea to just start bringing some sake in here because we couldn't get good sake in Hawaii. I didn't have a big business plan. It was more for personal reasons. I just want to bring more in. That's kind of helpful. But I think we registered as a company in 1998 and we brought our first shipment into Honolulu in 1999 for I think it was for a moon viewing party that we had at the Japanese consulate here. So that was kind of the kickoff. I think our first shipment was maybe 60 cases or so. And these days we probably move around maybe 3,500 cases per month. So the 60 cases? Did that come by air? No, it can't. It was shipped up by sea. And at that time, we probably started with FTZ at that time. I'm pretty sure they were there for us from the very first shipment. And so we brought it into FTZ and although they don't have refrigeration, they do have a cool area because of the refrigeration. So that was good. And yeah, we couldn't have started here without more trade funds. We're very grateful to them. Oh, that's awesome. That's great. How did you navigate just the importing when you first started? The importing is not so bad. You just have to have a license to import alcohol. It has a federal license. And then you have to have a state license in Hawaii to sell the alcohol. So those are the two things that are required. But on the Japan site, because the exports, when the stock is exported to Japan, documents have to be filed with the National Tax Administration. Because taxes are assessed, the sake brewers in Japan, they have to pay an alcohol tax. But that's waived when it's exported. It's kind of like an induced birth. All that paperwork has to be done and all that tax deferment has to be calculated. And it's not the kind of thing you can do yourself. You have to have an agent in Japan to do that. So we do have a very good agent in Japan and sort of a family friend. And they took that part over. But we were able to do the Japanese side quite well and the US side quite well. And we had been introduced to the brewers by the wife of Takawa Nihie, the brewmaster I told you about earlier, who'd become a close friend. And so when we said that we wanted to bring good sake in Hawaii, she said, okay, I can make some connections for you. And she did and she connected us with a few of the most famous breweries in Japan. And I guess it's just how it is if you have introduction from someone that is respected, goes a long way. So that's what helped us connect with the breweries that we represent now. That's amazing. And so the technician moved to Hawaii from Japan? Yeah, it's an amazing story. You want to read more about it. You can go to the Honohou website. They have this issue has an article about it. There's even a video. But yeah, he was the one that was appointed to go to Hawaii in 1954. Because after the war, they couldn't make the sake well anymore. Too many of the people that had worked in it had retired, the equipment hadn't been used for a long time. And sake means working with microorganisms. And so starting everything from scratch wasn't easy and they could have made good sake here. And so they brought Nihesan over to be their consultant. When he got here, he just couldn't believe what terrible shit things were. And it wasn't confident that he could solve all the problems, but it's amazing what he did. And he was the one that developed the kind of techniques for making sake from California rice that were later followed by the big Japanese breweries when they went to California. And he had lots of innovations that he did so that he became famous in Japan as a researcher. And it was actually, you know, given a big award and everything. And so yeah, that was, you know, that sake was such a big part of Hawaii in those years and it still is today. Wow. Did a specific sake company bring him over? Yeah, it was at that time after the war, the only one that started up after only one that was big enough. And during the war, they had made shoyu, they made miso, you know, they made other things just to keep going. But after the war, they wanted to get right back to Tokyo and they make it on a big scale. They were selling a lot of it and not only in Hawaii, but they exported to California too. And sold a lot of it. It was a big business. And so they needed somebody that could do it on a large scale. Okay. So when you say you found your suppliers from your connections, and then how do you find the buyers? Like who are you selling your sake to? Mostly to restaurants, you know, in our case. Although because of COVID, now we're respecting the stores a lot more, you know, the retail stores because so many more, more people are, you know, drinking at home. Oh yeah. We started out the companies that and in Hawaii, there's a lot of Japanese owned Japanese restaurants. I mean, you don't always find that if you go to a city on the mainland, they might be Japanese restaurant, but maybe the owner's not there. But here, the Japanese owners were here and they recognize the names, the breweries that we represented because they were famous, you know, Masumi, De La Zacura, Koshinokamai, these types of breweries were well known, you know, to anybody. And so we didn't have much problem meeting with them. And also because we were bringing the sake into Hawaii in a in a reefer container, so it was refrigerated. And we were selling it quickly. The sake was in amazing fresh condition. And there was a comparison between our sake, other sake that were available for the distributors. So we quickly established the sake. Wow, that's such a great story. And did you, how did you find the restaurants? Or did they find you? Or did you kind of go door to door? And, you know, I think in sales, you really have to recall. And you know, you get the best way we found is to kind of concentrate on the best restaurants that are respected by other restaurant people. So if there's someone, someone like that, then, you know, if they carry it, then others say, okay, well, yeah, and then it is a word of mouth. Must be okay, you know. So we started out with Furusato restaurant. And they were a big restaurant group. They had four restaurants at that time. They still have the oldest Japanese restaurant in Hawaii. So it's left, it's on Kalakaua right at the corner of the Hyatt. You can see. So it's called Furusato. It's the oldest Japanese restaurant on Oahu, as far as I know. And but at the time, they had other ones too. And they, they, they right away, you know, got all the stuff. That was the start for us. That's amazing. And then are you guys now exporting anywhere? We, we have offices in New York and in San Francisco and in London. And we have sales representatives working with home office or the home offices in Miami and Las Vegas. So yeah, we've kind of expanded. Probably, probably 85 or 90% of the sales are now outside of Hawaii because those are much bigger markets. That's amazing. And is it pretty much the same importing from Japan to these different locations? Pretty much. I mean, once you, once we started exporting to New York, we didn't send it from Hawaii to New York. We would arrange a direct shipment. And that, that was okay. I mean, in Hawaii, you don't run into problems with, you know, not, not very often, you don't run into problems with, you can't get your cargo unloaded because the workers are on site, you know, there's a slowdown or something. Teamsters on the West Coast, that's happened a few times. You know, and so then it just backs up everything. Makes delays. And right now, you probably know, there's an international shipping notebook. There's a charge of containers. Our shipments now are at least five, our shipments to New York and to the West Coast are five weeks late. Oh, you know, they kind of arrive and when it actually arrives, it's like five minutes later. And it's probably not going to get any better for a few months. So that creates enormous problems because, you know, you have people wanting to order sake and they can't do it. And then once the shipment finally arrives, you have so many back orders that it depletes all your inventory and you're, you're out of things again, you know, just after the boat arrived. Wow. That's kind of what's going on right now. But it has a, Hawaii, Hawaii seems to be a little bit protected, you know, because it's, it's, I don't think it feeds into the international shipping schedule quite, quite as much. It seems they go back and forth in Hawaii and Japan, you know. And so that's been fairly regular, but even so, they canceled all the April ship to Hawaii. So there's no shipments coming in Hawaii in April from Japan. Wow. But I know what, you know. Who is your shipper that ships direct from Japan to Hawaii? They consolidated recently that the ocean network, something like that. Oh, one. One, yeah. But they're like a monopoly. And formed by a consolidation of three, three Japanese shippers. Now they're owned out of Singapore and the service is really deteriorated, but it's not the same level of Japanese attention and service that existed back. Oh, it's too bad. But any business has its head. And it's, yeah, I think the number of shippers that will come direct to Hawaii is minimal. Yeah, maybe they'd only want. I heard about one coming from Hokkaido. A ship comes from Hokkaido and brings rice. I guess there's other ones too. Yeah. But not, it's hard to find. Oh, we have a question from one of our viewers. They're asking, is your main market demographic Japanese people? Or do other? No, it's not. Maybe in the beginning it was more that way. But now I think it's really, sake has been accepted, not only in Hawaii, but, you know, in main markets, energy, you know, they all have a lot of good Japanese restaurants. Anybody that walks into a Japanese restaurant, I mean, they're kind of like positive orientations who order sake, right? Yeah. So it's really the Americans that are driving. It has a self-sustaining momentum, self-sustaining growth momentum. You know, it's interrupted by things like COVID, but normally it's been growing by 8, 10, 12% a year for a long time. That's amazing. Yeah. I mean, what a great market to be in. And I wanted to ask for our new importers, did you ever have any problems with your import shipments coming in? Do you have any horror stories about anything getting held up? You know, I really haven't, you know. That's good. I really haven't. There's horror stories, but they had nothing to do with what happened to the sake after, you know, how it landed in Hawaii. We haven't had any problems with customs, really, and nothing's ever been held up. We're quite happy, you know. I love that our, even though we sell sake in the United States and Europe, I'm really happy that our headquarters. That is great. So is it a growing thing in Europe? Yeah. We just opened a world sake imports EU, a perfect timing right before the pandemic. So it's kind of on hold right now, but we have everything in place. We have a company. It's in Germany that our branch company is registered and all the paperwork is fine. We're registered as a German corporation. We have a warehouse that we have refrigerators. We have delivery and we have scale first. So it's all on hold right now for COVID. Huh. That's amazing. We are going to take a short break and this is International Hawaii on ThinkTech and we'll be right back. Hi, welcome back to International Hawaii. I'm Cindy Matsuki, your host and my guest today is Chris Pierce. He is the founder of the World Sake Import Import Company in Hawaii and we're talking about how he's established his business and found his customers, but he also has another business that he also runs and I have no idea how he manages his time, but you also publish and run Honohou Magazine. This is the magazine that you can find in Hawaiian Airlines. Yeah. We were always in the publishing business first. We had a magazine in Hawaii. I started doing magazines in Hawaii in the early 80s. Wow. So this is before the whole sake thing. Yeah, before the whole sake. So that's actually how I met Nihesan. I think a Japanese reporter took me up to visit him one time. So yeah, I've always done magazines and I like having, I think when you live in a place like Hawaii, which is so dependent on things that happen in other parts of the world, that it's good to have two businesses somehow managing, you know. This was told by me, but our first distributor was on Guam for World Sake Import. And he told me, he said, Chris, it's really a good idea to have two businesses. He said, we have two businesses. We have one in Guam and we have one in Saipan. And when the typhoon, it's Saipan, wipes everything out, we still got Guam. When the typhoon, it's Guam and wipes it out, we got Saipan. I never forgot that, you know. And I think it's pretty good advice, actually, you know, to try to, if you can, you know, try to hedge your businesses. So we thought we were going to kind of get out of publishing and just concentrate on the world sake, but then Hawaiian Airlines kind of like knew about us and approached us about their inflight magazine. And then, we decided we were going to do it. So we've been doing it for the last 21, 22 years. That's amazing. I love the magazine. I mean, I don't know how you find like those specific stories that are so amazing. Yeah, we've never repeated a story. It just goes to show you what kind of a place Hawaii is. How many experiences there are here and how deep and rich the culture is. It's just endless. I was going to ask, like, how do you maintain your relationship with your suppliers? Like, are you in Japan a lot visiting? Well, yeah, I'm usually going there. I would probably go four times a year, four times a year. I always visit each group at least once a year. But we're good friends by now. You know, it's not all of them. You know, there's, you know, I mean, I get invited to the wedding, you know, things like that. And so, it just, it's just a really, really good relationship every single one of them. I think they just hired us as part of their company office. That's wonderful. And then you mentioned how the pandemic has kind of slowed restaurants down. And how did you, how did you change the business? Well, that was, yeah, we, like everybody else, we didn't really see it coming. You know, January, February, but then, then in March, by end of March, it was starting to hit big time, right? New York and our major markets are California and New York. And they both then just got slammed. And then by the last 10 days of March, the sales were getting down. And then, and then by, by February, February and April, we were probably just 15% of our money. So we applied for the PPP funding. We got it, you know, and so that enabled us to keep everybody on salary. And the salespeople that depended on commission, we put them all on salary. But we didn't have to let anybody go. Wow, that's great. We've just, and then we tried every way we could to try to, you know, get sales from the out of the situation that was there. If they only have takeout, we would have to take out menu for something too, you know, if they wanted to, especially we would make it. You know, we always had something going on promotion. And actually that reacted to our benefit because people really appreciate the effort that we made to help, you know, to try to find some way, you know, to move that. And now that we're lifting up, I mean, we're seeing like a lot of business just pour back. This month, this March is a big month for us. Oh, great. That's good. How far ahead do you have to plan, like a month or two months, as far as, you know, ordering? Order, from the time we order the saute to the time we get the saute, if it's like New York, let's say, or West Coast, it'll probably be about three months. And then, yeah, it's a long period for the ordering, right? You have to order it and then the brewery has to deliver it and it's got to stay in Japan for a while, while various people and stuff like that. So by the time we, by the time, from when we order it to when we sell it, I would say it's probably about four months before we turn it around, you know, that kind of thing. Wow. So were you ready? Like, did you kind of predict around now is when business would start picking up again? And so you've been kind of, I kind of thought it would get better in March. In March, yeah, but I mean, I didn't think it would get this. There's clearly a lot of pent up demand, you know, and that's one thing is the, I think with sake, you know, with something that people go out to restaurants to have a good time, you know, as soon as they can get back to that, they're gonna want to get back to that. You know, they're gonna want to go out to a restaurant. Maybe they form the habit, you know, over the last eight months of, or last year, actually, of not going out, you know, and it's going to take them a little while to start going back to restaurants. It's not a habit anymore. Apple will be reestablished, you know, maybe by June or so. I think I feel like May and June, April and May are going to be kind of like intermediary months. But if the vaccine keeps rolling out like it is, and if no really crazy variant, you know, diseases pop up, it should be really, really strong economy. Yeah, I hope so. Just taking the evidence of how much people want to drink, you know, which I think is a good indication. Did you see an increase in, like, not restaurant, but store sales? Like, do you distribute to? We went out, we got a lot more, stores would contact us, we contacted more stores, we got a lot more retail customers, and the percentage of the retail sales went up significantly compared to the restaurants, so that's probably not going to change. But, you know, it kind of, you know, we always read these stories every few years, every five years. Asake, you know, it's now established, you know, it's now part of life in the United States. And it never really quite seems to happen, you know. It always seems to be like this fringe thing that people get just when they go to Japanese restaurants. But as a result of this pandemic, it might worry what very well would have happened, you know, this thing, you know, we'll see, you know, but, you know, because of buying it into retail stores and stuff. So it's not, you know, Sake is really great. I mean, and the more you learn about it, the more you appreciate it. As you drink a variety of soft drinks, you know, from many different breweries, you know, that are always in, like, perfect condition, you know. People really get into that, you know, and they want to learn more about it, you know, try different ones. So it's, education is always been a big part of our, you know, mission, if you will. Are you doing any B2C sales, like you do online? We don't do it ourselves, no. Okay. We've never got around to it. And now, it seems like there's so many other people doing it, you know, and I would be, I would be a little bit cautious, too, because, I mean, it is a business after all. And just because, just because you're able to, you know, put your own Sake's online, you know, at a reasonable price, it may be going to range to ship it. That doesn't mean you have to do all the other things. You have to promote, you know, you got to keep upgrading your website, you know, you got to be aware of what your competitors are doing, you know, you have to have somebody that's really in the middle of that, you know, running an online retail business. So I don't think some of my best, you know, supporter and a distributor, you know, should do that. Yeah, that's true. Better to have larger customers with less orders, but larger orders. Yeah, we continue to work with lots and lots of restaurants. That makes sense. What are, what are some of the biggest challenges that World Sake faces? Like is it hiring or is it shipping? Well, really the, the worst thing that could happen is foreign exchange. So for example, during the, during the meltdown, financial meltdown in 2008, 2009, that just slaughtered the dollar, you know. So nowadays, with, with one dollar, right, with one dollar, we can buy 110 yen worth of Sake, you know. Now in those days, with one dollar, you could only buy 80 yen worth. Wow. A week a dollar worth. And so, but on the other hand, you're in the middle of a recession, so you can't raise your price to cover that because, you know, your customers are barely hanging on, you can't go, hey, we have a price. So you just have to suck it up and be able to lose money, you know, for years. That's one of the good things about, you know, being in business for a long time. If something like that happens to you, you know, in the first year or two, you might not survive. Wow. Foreign exchange can really slam the, and it's not going to escape. It coincides with a bad economy in the whole country. That's why, you know, that's why the dollar is weak. Wow. That is tough. Any advice that you would share to somebody just starting out? I think it's great to love your product if you can, you know. You know, so you have that natural enthusiasm and that you like talking to people about it, share it, you know. And so, every time you go visit a potential customer on a sales visit, you think that you're doing them a favor, right? What do you do? You get to buy this great stuff that I have, you know. It's going to make your business better. It's going to improve quality of your, you know, of what you sell, you know. I think, you know, you want to be able to communicate that kind of enthusiasm. At least in the consumer area that we are in. That's great advice. I love that. Where can people find out more about your stocking, your company, and your events? We have a website, worldsocket.com. We're very involved in the joy of sake. That's the world's biggest sake event outside Japan that's held every year. It's been held in Hawaii for 20 years now. It started in 2001. We couldn't have it last year because of the pandemic, you know. It just, it wasn't allowed, but we're hopeful to have that one. So, that's it. That's the amazing, incredible sake event. Usually there's 500 different sake, all of which you can taste if you want. I need to go to that. It's absolutely sake, and there's usually about 20 restaurants that prepare sake. Are you planning to host it this year? Yeah, we can't wait. As soon as the governor loosens up, you know, that's his public events again. We'll schedule for sure. Yeah, it's at the convention center. That's where we have it. That's great. In the ballroom. Definitely let me know about that. I'll help share the news. Okay, I appreciate that. Chris, I want to thank you so much for all your advice and sharing stories on International Hawaii with me. And it's been a real honor having you on our show. And we'll see you next time on International Hawaii and thank you. Okay, thank you so much for inviting me. I enjoyed it. Thanks, Chris.