Success Stories Crust Japan

Narrator: Doing Good, Doing Well is a series of podcasts from the Japan External Trade Organization or JETRO, targeting businesspeople interested in investing in or considering expanding into Japan. JETRO is a governmental organization promoting investment in Japan and business partnerships between Japan and the world.

Today’s society confronts a wide range of problems, including climate change, energy issues and aging populations. Companies and organizations around the world are tackling fresh challenges in an effort to solve these problems.

In this series, we bring you interviews with forerunners at foreign-affiliated companies that have established bases in Japan and are working on solutions.

Today’s theme is Sustainability Starts with Good Taste.

A food tech company from Singapore has arrived, with a mission to up-cycle surplus food.

What challenge is Crust Japan tackling to create a better future? Let’s find out.

Ayaka Kadotani: Hello everyone. I'm your navigator Ayaka Kadotani. Today I have the pleasure of interviewing Mr. Travin Singh, CEO of CRUST Group. CRUST Group is a food-tech company founded in Singapore in 2019 with a Japanese subsidiary established in February 2021. I'll be asking questions regarding the group’s business and its entry into the Japanese market. Travin, welcome to the show.

Travin Singh: Yeah, thanks for having me. Very nice to be here.

Ayaka: First up, can you quickly explain what exactly CRUST Group's business entails?

Travin: Yeah, sure. So basically everyday we throw out surplus food. Food that is basically still good to eat, but a lot of companies actually just still cut them, right? So the CRUST Group up-cycles this surplus food into different products, such as beverages and we basically transform this surplus into products of higher quality. So what we call them is valorization.

Ayaka: Right.

Travin: For example, we ferment the sugars in fruits, bread, rice and so on to convert them into alcohol. So for instance, for CRUST's side it is beer. So that's how we develop our products such as CRUST beer brewed from leftover bread. In Japan, we call it CRUST LAGER and CROP, you know basically a non-alcoholic beverage from fruit peels and in Japan, we actually use Amanatsu. So to create these products we connect with a wide range of partners, we share our awareness and values as well, such as companies that provide us with these leftover bread and also farmers who provide fruit peels that would otherwise be discarded. We couldn’t do what we do without this collaboration. In addition to making these B2C products, a big part of what we do is B2B business.

Ayaka: Yeah.

Travin: For example, CRUST Group collects food loss from large facilities such as supermarkets, hotels and we also up-cycles it for them. Our mission as a company is to reduce worldwide food loss by 1% by 2030. To that end, we do collect data as well on how well we reduce food loss and how much we contribute to reducing CO2 emissions, and we actually share this data with our partners as well.

Ayaka: That is fantastic. So I understand that the idea of up-cycling food waste and loss into beverage products comes from a certain sense of awareness about some of the issues that we have in the world right now. Can you tell me a bit about that?

Travin: Yeah definitely. I think for myself, a lot of my past and how I have been brought up have been a huge influence for me. I come from a really large family, and I'm also the youngest kid. I'm the fourth kid. Both my parents did not earn a lot of money growing up, so we had to make ends meet essentially. So like my mom if she cooks for the family today, and if we don't finish the meal today, she'll incorporate today's meal into something new tomorrow. And she did this, not because she was a sustainability advocate, she did this mainly because we didn't have a lot right and she had to maximize her resources. So that's the exact same mentality that I grew up with and it's something that I started CRUST with as well. It's essentially to look at what's around us and maximize every single resource that we have instead of buying or growing something new. Yeah so guided by this principle that I've learned from my mom and essentially, I've also been brewing beers for a while then, so naturally what I thought about was to always basically start a company where we can actually just up-cycle surplus food and whatever is around us and maximize it right into a beverage. And then you know we also started realizing that a lot of this B2B food and beverages companies were also throwing away or donating a lot of food waste and we thought that we could come in from a very B2B angle also. And you know the more you learn about the market right or the world right or food loss in general right, you then also realize that 1.3 billion tons of food are wasted yearly. According to the UN (United Nations), this food loss accounts to roughly around 750 billion dollars’ worth of food loss and not just that, it's a real detriment to the environment and also global warming for example. The volume of greenhouse gas emission from food waste is about 8% of the total amount of greenhouse emission gases. And that's 4 times the greenhouse gas emissions of the airline industry.

Ayaka: Right, that's definitely a huge amount and that's something we'll need to work on right now. So what do you think is necessary to solve such issues?

Travin: So as mentioned earlier, CRUST Group's target is to reduce 1% of global food loss by 2030. Of course, reaching that goal will depend more heavily on collaboration than on competition. We also have a goal in the company, like the way we look at the future, we believe that a future on food should be more collaborative and less competitive. And you know our efforts to promote our up-cycling business depends critically on collaboration with a wide variety of organizations. You know one company like CRUST alone, we can only do so much. You know we're also not naive right, so we know that we probably need to collaborate with a lot more other companies right, each one of us leveraging on our own strengths. We can potentially then achieve our goals you know that were once thought impossible.

Ayaka: Sure.

Travin: Then at the same time, the need for collaboration is also the main reason why our business is primarily B2B. In the last 30 to 40 to 50 years, the beverage industry hasn't really changed much and a lot of companies focus on just selling their own brand. You know so for us, B2B has been and also will continue to be like our main model. And you know we adopt a holistic approach, mostly taking a bird's eye view of an entire supply chain and ecosystem while we partner with a lot of different partners and organizations, not only to just like up-cycle the surplus, but also we also look at what's within the market and what is certain produce that we can even use as a substitute for your traditional raw materials to make any kind of beverage. Then we also do gather and publish data on our business results and their impact on the environment. You know we basically want CRUST Group to be the cornerstone for solutions for up-cycling in any market that we are actually in and we want to be able to show a lot of the other F&B (Food&Beverage) partners that there are definitely much better ways to do things and we don't have to be a detriment to the environment as we scale.

Ayaka: Well, I love how data-driven you are and how well you collaborate with different partners. It's so amazing. So you established CRUST Japan, your Japanese affiliate in 2021. What led to that move?

Travin: So we have been a part of various different start up programs worldwide back in 2020. I think some in Vietnam, Thailand, Singapore and the US, and two in Japan, actually. And you know we won an award at Hack Osaka and then you know in another program called Startupbootcamp Osaka. The idea for us to enter such programs was to share more about our company and understand more about the market as well, meet different mentors, companies who could potentially help or develop what we already have. And then what we'd realized was the Japanese government was like more less grappling the Sustainable Development Goals (SDGs) side as a matter of national policy. And you know we're trying to build policies revolving around food waste reduction also, so in the instance, we actually thought that okay maybe this could also be a really good market for us. On top of that, we won an award at Hack Osaka and it actually shows that maybe there really is a market for us here in Japan. And I think my upbringing as well of not wasting food is very similar to Japanese culture as a matter of fact. So yeah so I think these were some of the reasons and we started meeting a lot of different investors, companies, you know increasing our own network here in Japan and we saw a really good traction. People really bought in to the concept and then of course, in between we met JETRO as well, and we've had so much of help from JETRO. They have actually matched us up with different companies, we've also met government organizations like the Ministry of Agriculture, METI (Ministry of Economy, Trade and Industry) as well, and yeah, I think all-in-all that was essentially what led to us entering the Japan market, and yeah, no regrets.

Ayaka: Well that's great to hear. It seems like you’re enjoying your adventure. So what makes the Japanese market distinctive in your view?

Travin: The size. I mean, Singapore is a very small market. It's a great place for investor relations, test market and all but Japan is where you can actually really scale the model. I think just the size alone right and also because of the culture that I mentioned earlier, the concept of not having food waste, makes this market a lot more interesting for CRUST Group as well.

Ayaka: Right.

Travin: And when I talk about size right, a lot of the convenience stores here is in hundreds and in thousands of locations right. Not just convenience stores, but supermarkets, hotels, you know even F&B groups, for example. And you know so that's why I also want CRUST to become more advanced and improve our skill sets faster right so that we can respond to the Japan market. And Japan also has a lot of their own produce right, so the opportunity for us to actually come in and help a lot of the farmers you know could be a lot more fulfilling for us at the same time, because in Singapore, we actually import about 95% of our produce.

Ayaka: Well that's fantastic. So much good insight about the Japanese market, there are so many things that I didn't even notice from the perspective of a person who has been living here all my life. Thank you for that. So what are some things that you value the most to keep your Japan business on track?

Travin: So I think in Japan, or any other market we're in, we actually want to pioneer a movement and because of sustainability. But it's not just sustainability that we stand for. Our B2B model is also very different. Every other beverage company worldwide, they usually only make products for themselves, whereas for us, we actually do the same, but we also focus on the B2B model, because we believe that future of food should be more collaborative and less competitive. And aside from pioneering a movement and also the B2B concept, what we actually focus on is hyper local. In Japan you have 4 islands and 47 prefectures so it's going to be super interesting for us to work with different prefectures and up-cycle the surplus in those prefectures to make like a prefecture-focused CRUST or CROP. It could also potentially tie back to tourism maybe.

Ayaka: Sure.

Travin: In the future. So everything I've mentioned, I think one of the biggest focus that we have in the Japan market is that we don’t want people to look at us as a Singapore-company setting up a shop in Japan.

Ayaka: Right.

Travin: You know we want people to understand that CRUST Japan is a Japanese company for the Japanese market to up-cycle the food waste in Japan, to reduce food waste in Japan, to create Japanese driven products for consumption in Japan. So I think that's what we stand for and we hope that that would be the way forward for us in the future.

Ayaka: Well that's brilliant. I love the way you're customizing yourself in order to really cater to the Japanese market and consumers.

Travin: Yeah.

Ayaka: So you have been active in the Japanese market for about 2 years now. By now you must be getting a sense of how the market responds to you and resonates with you. Could you tell us about your business performance at this time and about your future outlook?

Travin: Yeah, I think so far, we have already collaborated with quite a number of big companies, like Japan Agriculture Group, Itochu, Kokubu, even a few hotels like Aman Tokyo is one of them as well. We just launched CROP in 82 Natural Lawsons locations in Tokyo and yeah, I think all-in-all, it's been good. Of course, it can definitely be much better but aside from just entering and working with big players, we've also been looking at different prefectures as I mentioned previously, working with different government organizations also, so we have started even a Kitakyushu project where we up-cycle tomatoes from Kyushu into beer. And yeah so, so far so good, there's still so much more for us to do, a lot more to achieve and I think 2023 would probably be a really good growth year for us but we have to solve quite a number of other small nitty-gritty stuff probably in the next one to three more months. And we definitely do make beverages, the whole world knows what we do, but aside from that, when you make beer, you have the by-products of beer and it's called spent grain. And right now, in Japan, we have even worked with I think about 5 or 6 different contract manufacturers, and they all have their own spent grain.

Ayaka: Right.

Travin: So what we have done is, we have done some early stage R&D (Research & Development) to actually convert our spent grain into a pancake mix, for example. So that could potentially be another part of the business that we want to enter. But the next 1 to 2 years in both Singapore and Japan, the beverage business will be the main focus.

Ayaka: Fantastic. You got the specific plan already and really excited to see what happens next.

Travin: Yeah, me too, because even I have no idea.

Ayaka: Finally, do you have any message and advice for other global companies considering to enter into the Japanese market?

Travin: So for me personally, when we were entering the Japanese market, we actually got a lot of help from JETRO. You know so they actually matched us up with different businesses, mentors, partners, etc. Setting any companies entering into Japan can always look to JETRO for some additional help.

Ayaka: Right.

Travin: Especially for market entry. And you know some of the advantages of the Japanese market is that first and foremost, it's a really big market. And secondly, it's really high in quality control. So if you can do well here in Japan, then you can probably do well in most parts outside of Japan.

Ayaka: Well that's great advice.

Travin: Thank you.

Ayaka: So that takes us to the end of the show. Thank you so much for joining us today, Travin.

Travin: Yeah, thanks for having me and it's truly an honor and I think lastly, thanks for the opportunity to share more about CRUST Japan.

Narrator: Crust Japan creates delicious solutions to the problem of food loss and waste. What did you think of the story of its entry into Japan?

We hope today’s episode provided you with some inspiration on how to seize the business opportunities available in Japan.

To learn more detailed information on entering the Japanese market or collaborating with Japanese companies, be sure to visit the JETRO website and our social media pages on Facebook, LinkedIn, and Twitter.

In future installments of Doing Good, Doing Well, we’ll continue to bring you interviews with key people in a wide variety of companies. Thank you for listening and see you in our next episode!