Once looked at with a sideways glance, supermarket sushi has become a key part of fresh perimeter sales — and a way to get customers into the store — for retailers.
According to a Nielsen report from 2016, sushi sales at grocery stores have hit $700 million annually, a 27 percent increase over the past four years. Supermarket sushi now accounts for more than 3 percent of all sushi sales. Some convenience stores are even getting in on the sushi game these days.
The biggest hurdle, of course, is the detailed and involved preparation required for safe, quality sushi. While they’re well versed in the logistics of acquiring and handling numerous types of raw fish, very few retailers have the resources to employ sushi chefs.
|Josh Onishi, president and CEO, Peace Dining Corporation|
That’s where companies like the 20-year-old Peace Dining Corporation come into play. Peace Dining’s subsidiary Genji, LLC, is the largest sushi provider to Whole Foods Market. The Philadelphia-based company operates more than 250 in-store sushi and Japanese locations in the United States along with a central production kitchen and distribution and warehouse services.
“Peace Dining Corporation has become part of the global sushi operation,” says Josh Onishi, the company’s CEO. “About 20 years ago there were not many sushi operators inside supermarkets. It was a small thing on the West Coast, and then it started to really grow. Little by little, companies established themselves and now it’s a regular part of the supermarket.”
And Onishi doesn’t plan on the company slowing down any time soon. He has set a goal for Genji to open in 300 new supermarkets within three years.
“Now places like Whole Foods and Wegmans and H-E-B have changed the format of supermarket sushi,” Onishi says. “With the focus on the deli and fresh food sections of the supermarket, sushi is only getting better and it’s only going to get more popular.”
Quality is king
Onishi says quality is the differentiator that has emerged over the past decade and pushed supermarket sushi to where it is now.
“I would say 15 or 20 years ago, everybody wanted to have sushi, but they didn’t need to have the high-quality sushi yet,” he says. “The high-end supermarkets realized that to differentiate they needed restaurant-quality sushi. They needed to upgrade and that’s why you see new trends.”
The quality of in-store sushi has been directly impacted by the rise of the rest of the fresh perimeter. Sushi has joined the rest of retail foodservice in the sense that consumers are looking for the same type of quality they would find at a decent restaurant.
“I think that plays a big part in the evolution of supermarket sushi,” Onishi says. “That trend has been going on the last five to eight years and it has made the quality of the sushi inside the supermarket much better. The quality is now required to be much more sophisticated. The consumer is willing to pay $15 or $18 for sushi in the supermarket if you give them very good quality.
“I think the perception that all prepared food in the supermarket is bad is long gone thanks to Whole Foods and other high-end supermarkets. Customers now want to pay for high-end items and sushi has adjusted to that trend.”
Genji’s answer to the challenge of getting that high-end sushi into a supermarket is its corporate-owned model. Genji supplies the chefs, the sushi, the ingredients, the distribution and everything else that is needed to produce high-quality sushi. The retailer provides the space for storage and preparation.
“Genji is 100-percent corporate owned,” Onishi says. “So all the chefs are our chefs. We take care of training them and they’re on our payroll.”
More than 1,000 Genji chefs work at more than 170 Whole Foods locations every day. They are trained in cutting-edge techniques for preparing vegetables, slicing fish, rolling maki, making nigiri, plating and more. Just as importantly, Onishi says, they are trained in every detail of foodservice operation.
“Food safety is such a key issue,” Onishi says. “We make sure all of our chefs are highly training in that area. Our model makes it much easier for retailers to offer sushi like this as safely as possible.”
Peace Dining operates a central production kitchen and a main warehouse in Allentown, Pennsylvania. The company purchases all of the seafood and other ingredients and ships it directly to its facilities, where product goes through some processing and packaging before it is shipped out to stores on a daily basis.
The company uses its own logistics wing, GHG Logistics, for its warehouse and distribution needs. The main warehouse covers 35,000 square feet of dry goods storage space, 3,000 square feet of racked refrigeration and 2,000 square feet of racked freezing. A satellite warehouse is located in Long Island City, New York. Orders are shipped daily to more than 150 locations in 19 states.
“From there, our chefs receive the products at the store, where they have designated space assigned by Whole Foods,” Onishi says. “They have storage space, refrigeration space and dry space. The chefs are there at 5 or 6 in the morning every day, preparing the sushi. Anything we don’t sell that day, we dispose of. We aim to use all of our ingredients every day. That provides really good sushi for our customers.”
The mix of central facility and in-store production also helps Peace Dining stay innovative and up-to-date with current trends.
For example, the company recently introduced its Handroll Sushi, a new way to eat sushi on-the-go. It is portable and consumed like a burrito, with sauces already applied and no need for chopsticks.
The company also provides other Japanese foods, like the Japanese Ramen Shop locations in Whole Foods. These ramen bars include dining areas and menus with various classic ramen styles. In addition, they offer a new dry-style ramen called mazemen, made with thick whole wheat noodles and a creamy sauce.
“I think we are in a very good position to answer any trends,” Onishi says. “I really believe we are ahead of the curve in those areas.”
Sustainability and transparency
Peace Dining has long claimed an honest and transparent culture when it comes to the company’s food. Strict sustainability standards are followed and the company says it only works with well-respected suppliers that are able to meet rigorous requirements, including the certification of their products.
“The trends really are going the way of clean ingredients and sustainable seafood,” Onishi says. “If you’re looking for a corporate-owned program that can provide this, there are only a few players in the U.S. right now.”
Onishi claims the corporate-owned model is ideal in terms of controlling the environment of the sushi operation. The central facility, packaging, distribution and the training of the chefs add up to high-level sushi in a safe environment, he says.
“A lot of people are knocking on our door and there is an opportunity to work with the chains that want to have this type of sushi vendor with the core values of sustainability and clean ingredients,” Onishi says. “It’s all of that with a more controlled environment that is ideal for food safety.”