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This Japanese Shop Is 1,020 Years Old. It

Knows a Bit About Surviving Crises.
A mochi seller in Kyoto, and many of Japan’s other centuries-old
businesses, have endured by putting tradition and stability over profit
and growth.

Ichiwa has been selling grilled rice flour cakes to travelers in Kyoto, Japan, for a thousand years. Hiroko Masuike/The New York Times

347

By Ben Dooley and Hisako Ueno

Published Dec. 2, 2020 Updated Dec. 3, 2020, 1:59 a.m. ET

KYOTO, Japan — Naomi Hasegawa’s family sells toasted mochi out

of a small, cedar-timbered shop next to a rambling old shrine in
Kyoto. The family started the business to provide refreshments to
weary travelers coming from across Japan to pray for pandemic
relief — in the year 1000.

Now, more than a millennium later, a new disease has devastated

the economy in the ancient capital, as its once reliable stream of
tourists has evaporated. But Ms. Hasegawa is not concerned about
her enterprise’s finances.

Like many businesses in Japan, her family’s shop, Ichiwa, takes the
long view — albeit longer than most. By putting tradition and
stability over profit and growth, Ichiwa has weathered wars,
plagues, natural disasters, and the rise and fall of empires.
Through it all, its rice flour cakes have remained the same.

Naomi Hasegawa is the operator of Ichiwa. Hiroko Masuike/The New York Times

Such enterprises may be less dynamic than those in other

countries. But their resilience offers lessons for businesses in
places like the United States, where the coronavirus has forced
tens of thousands into bankruptcy.

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“If you look at the economics textbooks, enterprises are supposed

to be maximizing profits, scaling up their size, market share and
growth rate. But these companies’ operating principles are
completely different,” said Kenji Matsuoka, a professor emeritus of
business at Ryukoku University in Kyoto.

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“Their No. 1 priority is carrying on,” he added. “Each generation is

like a runner in a relay race. What’s important is passing the
baton.”

Japan is an old-business superpower. The country is home to more

than 33,000 with at least 100 years of history — over 40 percent of
the world’s total, according to a study by the Tokyo-based Research
Institute of Centennial Management. Over 3,100 have been running
for at least two centuries. Around 140 have existed for more than
500 years. And at least 19 claim to have been continuously
operating since the first millennium.

Kyoto, seen from a park near Ichiwa. More than 33,000 businesses in Japan have been open for a century or more. Hiroko Masuike/The
New York Times

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(Some of the oldest companies, including Ichiwa, cannot

definitively trace their history back to their founding, but their
timelines are accepted by the government, scholars and — in
Ichiwa’s case — the competing mochi shop across the street.)

The businesses, known as “shinise,” are a source of both pride and

fascination. Regional governments promote their products.
Business management books explain the secrets of their success.
And entire travel guides are devoted to them.

Most of these old businesses are, like Ichiwa, small, family-run

enterprises that deal in traditional goods and services. But some
are among Japan’s most famous companies, including Nintendo,
which got its start making playing cards 131 years ago, and the soy
sauce brand Kikkoman, which has been around since 1917.

To survive for a millennium, Ms. Hasegawa said, a business cannot

just chase profits. It has to have a higher purpose. In the case of
Ichiwa, that was a religious calling: serving the shrine’s pilgrims.

Ichiwa began as a way of serving pilgrims to a nearby shrine. Hiroko Masuike/The New York Times

Those kinds of core values, known as “kakun,” or family precepts,

have guided many companies’ business decisions through the
generations. They look after their employees, support the
community and strive to make a product that inspires pride.

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For Ichiwa, that means doing one thing and doing it well — a very
Japanese approach to business.

The company has declined many opportunities to expand,

including, most recently, a request from Uber Eats to start online
delivery. Mochi remains the only item on the menu, and if you want
something to drink, you are politely offered the choice of roasted
green tea.

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The mochi are made by hand and rolled in soybean powder. Hiroko They are then grilled and coated in a sweet sauce made from white
Masuike/The New York Times miso paste. Hiroko Masuike/The New York Times

For most of Ichiwa’s history, the women of the Hasegawa family

made the sweet snack in more or less the same way. They boiled
the rice in the water from a small spring that burbles into the
shop’s cellar, pounded it into a paste and then shaped it into balls
that they gently toasted on wooden skewers over a small cast-iron
hibachi.

The rice’s caramelized skin is brushed with sweet miso paste and
served to the shrine’s visitors hot, before the delicate treat cools
and turns tough and chewy.

Ms. Hasegawa’s great-grandmother Tome working at the The family is large, which helps the business keep going. Hiroko
shop. Hiroko Masuike/The New York Times Masuike/The New York Times

Ichiwa has made a few concessions to modernity. The local health

department has forbidden the use of well water. A mochi machine
hidden in the kitchen mechanically pounds the rice, saving a few
hours of work each morning. And, after centuries of operating on
the honor system, it charges a fixed price per plate, a change it
instituted sometime after World War II as the business began to
pay more attention to its finances.

The Japanese companies that have endured the longest have often
been defined by an aversion to risk — shaped in part by past crises
— and an accumulation of large cash reserves.

It is a common trait among Japanese enterprises and part of the

reason that the country has so far avoided the high bankruptcy
rates of the United States during the pandemic. Even when they
“make some profits,” said Tomohiro Ota, an analyst at Goldman
Sachs, “they do not increase their capital expenditure.”

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The honor system sustained Ichiwa for hundreds of years until prices were introduced after World War
II. Hiroko Masuike/The New York Times

Large enterprises in particular keep substantial reserves to ensure

that they can continue issuing paychecks and meet their other
financial obligations in the event of an economic downturn or a
crisis. But even smaller businesses tend to have low debt levels
and an average of one to two months of operating expenses on
hand, Mr. Ota said.

When they do need support, financing is cheap and readily

available. Interest rates in Japan have been low for decades, and a
government stimulus package introduced in response to the
pandemic has effectively zeroed them out for most small
enterprises.

Small shinise often own their own facilities and rely on members of
the family to help keep payroll costs down, allowing them to
stockpile cash. When Toshio Goto, a professor at the Japan
University of Economics Graduate School who has written several
books on the enterprises, conducted a survey this summer of
companies that are at least 100 years old, more than a quarter said
they had enough funds on hand to operate for two years or longer.

Still, that does not mean they are frozen in time. Many started
during the 200-year period, beginning in the 17th century, when
Japan largely sealed itself off from the outside world, providing a
stable business environment. But over the last century, survival
has increasingly meant finding a balance between preserving
traditions and adapting to quickly changing market conditions.

Workers cleaning Ichiwa at the end of a day. Hiroko Masuike/The New York Times

For some companies, that has meant updating their core business.
NBK, a materials firm that started off making iron kettles in 1560,
is now producing high-tech machine parts. Hosoo, a 332-year-old
kimono manufacturer in Kyoto, has expanded its textile business
into home furnishings and even electronics.

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For others, keeping up with the times can be hard, especially those,
like Tanaka Iga Butsugu, that are essentially selling tradition itself.

Tanaka Iga has been making Buddhist religious goods in Kyoto

since 885. It is famous for what its 72nd-generation president,
Masaichi Tanaka, jokingly refers to as the “Mercedes-Benz” of
butsudan — household shrines that can sell for hundreds of
thousands of dollars.

Masaichi Tanaka is the president of Tanaka Iga Butsugu, a religious-goods manufacturer in Kyoto since
885. Hiroko Masuike/The New York Times

The pandemic has been “tough,” he said, but the biggest challenges
faced by his company, and many others, are Japan’s aging society
and changing tastes.

Some companies have closed because the owners could not find a
successor. For Mr. Tanaka, it is getting harder and harder to
replace skilled traditional workers. Business is crimped because
fewer people nowadays go to the temples he supplies. And new
homes are rarely built with a place to put a butsudan, which
normally occupies its own special nook in a traditional Japanese-
style room with tatami flooring and sliding paper doors.

When it comes to religious tradition, there is little room for

innovation, Mr. Tanaka said. Many of his products’ designs are
nearly as old as the company. He has considered incorporating 3-D
printers into his business, but he wonders who’s going to buy items
made with one.
 Katsuya Ikeda repairing a part of a Buddhist shrine at Tanaka Iga. Hiroko Masuike/The New York Times

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Ichiwa is blissfully untroubled by such concerns. The family is

large, the business is small, and the only special skill needed to
grill the mochi is a high tolerance for blistering heat.

But Ms. Hasegawa, 60, admits she sometimes feels the pressure of
the shop’s history. Even though the business doesn’t provide much
of a living, everyone in the family from a young age “was warned
that as long as one of us was still alive, we needed to carry on,” she
said.

One reason “we keep going,” she added, is “because we all hate the
idea of being the one to let it go.”

The east gate of Imamiya Shrine, just steps away from Ichiwa. Hiroko Masuike/The New York Times

Ben Dooley reports on Japan’s business and economy, with a special interest in social
issues and the intersections between business and politics. @benjamindooley

A version of this article appears in print on Dec. 3, 2020 in The New York Times International Edition. Order Reprints |
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