Pioneer of Israeli Food Business – bringing the taste of Israel to Japan

Amnon Agassy is from Tel Aviv, Israel and he has spent the last 30 years of his professional life living and working in Japan. He is native in Japanese, and has extensive experience in cross culture communication and business. 

Arriving in Japan first in 1989, Amnon established Adama Breads which was to become one of the largest manufacturer of frozen wholesale bakery products, starting from a small Israeli restaurant and now distributing throughout Japan. As CEO, he developed his company with an American partner, Larry Smith, to a firm employing in excess of 300 workers spread over 4 different manufacturing sites, and oversaw annual sales growth in excess of 25% per annum, and was responsible for extensive importing of goods and machinery into Japan. He sold the company to another firm with experience in the food industry. 

Amnon maintains broad contacts throughout the Japanese business community, including having high-level relationships with some of the largest Japanese trading companies. He recently joined forces with Tom Nakajima at Interlink and is now bringing many Israeli brands into Japanese market using the knowhow from his business experience. Past few years, he became a co-founder and main partner of a fast growing Falafel Brothers company, a Vegan falafel brand and other vegan verity food restaurant chain, 3 locations and growing, with a big buzz and popularity in the Japanese market.

We interviewed him on the cross-culture business communication between Japan and Israel, and his future business development.

ーーー You’ve been living and working in Japan for over 30 years, but can you tell us why and how you decided to move here, and How has it been?

Amnon ー I was backpacking all over Asia for a year after the army. (I went to)India, Nepal and Thailand. You know it’s very common for Israelis to do backpacking after the military.  Just about when I was finishing my trip in Asia, I was trying to buy a ticket to go to Australia since I was doing wall painting art called murals all over Israel and I wanted to go to Australia to try out my art there. Then I met some Japanese friends in India who convinced me to visit Japan. I said to them “oh no that’d be too expensive..and too many ninjas..(that was my image of Japan then!)” but I decided to come for a little bit..and that became 30 years! I never made it to Australia.

In the beginning, I was mainly doing art, painting and working for some company to design clothes, and then one of the companies I was creating art for owned a few restaurants. It was then when I met Larry, my future partner at Adama Breads, a Jewish American businessman, he pointed out that there are no bagels in Japan, and he connected the dots and said “let’s make bagels” and I said “Okay” even though I had no idea how to make bagels..I said “of course, I know how to make bagels, it’s my speciality”…very Israeli style. I helped them create a bagel recipe and it actually became a big hit…Falafels in bagels and pita breads. They became popular so we decided to open our own restaurant separated from the company I was working for. That's how it all started.

ーーー That’s amazing. You have extensive experience in F&B manufacturing and business development. Can you tell us more about your past work and process?

Amnon ー Briefly back in 1995, Adama was the only Israeli restaurant in Japan then, a small place in Azabu. We started making a falafel sandwich that became a huge hit and there used be a line (at the restaurant) waiting for hours to get in. Little by little, we started to get orders from other places like Tokyo American Club and Park Hyatt Hotel. We were making everything homemade and other restaurants and hotels wanted to buy pitas and bagels from us. We got a separate place to start mass production and selling. I believe in delegation (to the professionals), so once the bagels and other baked goods became popular, I looked for a person who knows about bread more than me. I gave them my visions, ideas and the directions, and led the specialists to do the rest.

B to B business grew so fast and became bigger than the restaurants. By the time, we had another restaurant called Agada Music house but we had made a decision, either to focus on the restaurant business or the manufacturing. Even though both of the restaurants were still very popular, we closed them and expanded our factory. We got a place out of Tokyo in Hiratsuka, Kanagawa and started producing. 

Around that time is when Starbucks was coming into Japan(25 years ago). We saw the news on Japan Times in New York, and with the Israeli “Hootzpa(a Hebrew word describing a bold/shameless personality)”, I contacted the SAZABY LEAGUE who led Starbucks to Japan and set up a meeting. The head of the SAZABY came in, who was probably worth 300M dollars, he asked us “ You called me, what do you want?” We started off like “how much 1kg of coffee can we sell in our shop?”, and he was laughing and said “No, we don’t sell coffee(to other companies), but what do you guys sell?” We explained about our company and coincidentally, they were just looking for a bakery for bread and cakes in Japan for their operation. He asked us if they could buy from us for their first store in Ginza..that’s how we started selling pita bread, bagels and brownies to Starbucks. 

Obviously it became a huge deal for us. All of a sudden, our new bakery became busy manufacturing for Starbucks and other big companies like Lawson, Seven Eleven and Disney started coming to us for our products. Once you get one big deal, others would follow. We ended up selling to those big companies and also American military bases and Japanese schools for their cafeterias.      

We started from a small restaurant that turned into a massive production manufacturer with around 2000 clients across Japan and the company kept growing bigger and bigger. The company gained multi million dollars of annual sales, with 500 people in total working at 3 factories. Our factories were run by a full automation production system. When we brought an idea of a new baked product from aboard, we also brought the machine that is suitable for the production from aboard as well. Israeli machine of course for pita line and some Italian and Canadian machines, the best of around the world. In order to deliver the goods that would stay fresh and high quality, we froze all of our products and that allowed us to deliver to all over Japan for a good cost. Our repertoire expanded to 300 different kinds of bread and cakes that can be sold to Hokkaido through Okinawa.  

Even after I sold the company 10 years ago to a Japanese company, till today our products are still distributed and sold in Starbucks.

ーーー What do you think is the significant difference between Japanese and Israeli culture in terms of the business scene?

Amnon ーIf it's for small businesses with young Japanese and Israeli people, Japanese would go with the plan,  invest money, work on guidelines of what’s popular and grow slowly over a long time. It’s common to do the mainstream things like everybody else does but many times people would fail because it’s boring and also very difficult to make something new from the mainstream. Israeli people would find something new and unique but don’t have money to invest, they’d still work hard and jump into it. Israeli approach is quite dangerous like a startup style, you have to just keep running and running. Israeli business would take a risk believing in themselves to succeed, and try to grow or sell fast.  I think the combination of both, to have a good plan and run fast with risks would be the best way. 

For large companies, Israel is a very small country with only 8-9 million people and you cannot really grow big enough only within a local market. So usually when an Israeli company is growing big, they expand to the foreign market and go to the US, to Europe and sometimes to Asia just like Sabon, SodaStream and Teva did. Japanese companies would grow over the long period like 10 years, 20 years locally or in Asia and the big companies are usually family owned. Japanese market is big enough to support those mega companies that are huge in the local market but nobody would hear about them outside of Japan. Only a few of those mega companies like Toyota, Panasonic and Uniqlo have expanded and grown in western markets.

ーーー There has been a tremendous increase of Japanese companies investing in Israeli startups over recent years. Can you tell us your insights on why the Israeli companies are attractive to Japanese investors?

Amnon ー I see the main core reason is that Israeli companies would create something from minus which is a new original idea that did not exist or nobody thought about before, to take the risks without knowing if it would work and to invent the wheels, and they would take these minus ideas all the way to zero, meaning no sales or no properly established company but just a startup. Look at Waze, it’s an Israeli company with maybe 5 people, 0 sales but they got 51 million users. Google saw the potential and bought the company for 1.3 trillion dollars..for 0 sales. They just had a great idea of an app for driving. It started from 0 sales but a large company, like Google took it to 100 and more. 

By themselves, Israeli startups can only take something from minus, a small risky idea with no sales, to 0 or 1 which would be a beginning of something. And Japanese companies are great to take it from 1 to 100. It seems a small gap but it is huge. The reason why Japanese companies show interest in Israeli startups is that I think Japanese companies need somebody to bring the idea that they never thought about, and even though it has not earned sales yet, it’s fine  because they can follow disciplines and rules to establish the good standards and production flows to make the business bigger. There is a great synergy between Israeli startup minds and Japanese large-scaled business minds.

ーーー On the other hand, more and more Israeli companies have been expanding their business to Japan. What are the keys to approaching the Japanese market for Israeli companies that you think from your consulting perspective?

Amnon ーIsraeli people tend to talk a lot about how great their company is, and I found that Japanese people don’t really appreciate it when the others talk about themselves too much. Because when the product is good, just show the good document, the good price and the good plan and it would talk for itself.

So my advice would be to learn to talk less in general and less about yourself and learn to listen more to the other person. When you talk too much, you let other people talk less, especially with Japanese people. I’m sorry if I’m talking black and white, but Japanese people tend to lack the leadership in the business meetings and they are less assertive(than Israeli people). So if you put too many things in front of them, the chances are, they would not pick up any.

I suggest to keep things focused and simple, not spread mixed messages all over, learn to be a bit more humble even if you have a great product and company but keep a balance of Hootzpa, a little bit of initiative and assertiveness. You can maintain the leadership in the negotiation but do not overdo it, the usual Israeli style might scare off the deal. Humble but slightly aggressive. It’s necessary to understand the cultural and language barriers and differences.

ーーー How do you foresee the future of Japanese – Israeli cross culture business relationship and development?

Amnon ー Generally from what I have been seeing over the past 30 years, there is a great mutual respect for each other, Japanese see Israeli-Jewish people as very smart and creative business minded people, great at doing business and making money. Israeli people admire the Japanese style; high quality and high standards, hardworking and precise, very traditional yet unique culture. So as I said, there is a good synergy between two cultures, Japanese and Israeli are both interested in each other. Now more than ever, with the internet and new technologies, we are more connected and also with the great work of the embassies, it is creating more chances to start working with each other.

ーーー I think we can learn a lot from the Israeli style. Now can you tell us about your current work and any exciting projects you are working on?

Through the process of the M&A of Adama, I met a Japanese business person whose name is Tom Nakajima. He was a CEO of 7-Up, Newell Rubermaid and some other local brunches of the large American companies. Of course he is fluent in English and has a very international mind. I believe that we need a local Japanese person to help a foreign company to understand how to enter the Japanese market without messing up. 

We agreed on the same concept and since he had already established Interlink at that time, he invited me as a partner to attract foreign companies, mainly from Israel but also around the world, supporting them for a company merge or sales to the Japanese companies. We brought in brands of wine, food for Costco Japan or other companies, and many cosmetic companies. I used my network from Adama and other import & export works to bring clients and Nakajima san to negotiate with and introduce Japanese companies. So we work like an enzyme for the Israeli-Japanese business being in the middle to slow down the Israeli and speed up Japanese people so the gear would work better.

ーーーLeading on to what you said, what are the difficulties you have experienced in cross-culture business and how did you manage to overcome those?

I think Japanese and Israeli culture is so apart, as Japanese people tend to work in groups doing everything together, the decisions are usually made as a collective considering the hierarchy, don’t like taking risks, no reckless fast moves but taking everything step by step..everything that Israeli people hate. Israeli style is the opposite, to move fast and make your own decisions with more individual leadership, to take the risk and even if it’s 80% okay and ready, “Yalla!(Let’s go in Hebrew) and Just do it” style. Japanese people usually wait until 100% then go to 110%.

This gap always causes tension and problems between two cultures. Somebody has to fill in the gap to tell the Israeli to go up to 95% before moving and to ask Japanese people to lower the expectation to 95% to meet in the middle. If we left it as it is, Japanese people would never move forward and Israeli people would be like “Forget about it” and the business won’t happen.

Before I started working at Interlink, there was almost zero Israeli food and wine company in Japan. But we kept pushing, and with the help of the Israeli embassy in Japan, we made it happen.

ーーー Lastly, can you tell us more about your business model and your motto?

When I established Adama, I had a clear vision that by 35, I would sell the company and retire to go back to the art…I did not want to be a baker all my life but just to grow the company to sell it. 

I always have a goal and clear target, set the meaning and reason for WHY you are doing what you are doing and how big you want it to be. Once those are clear to yourself, your partners, your staff and clients, you can see the vision of the future according to your needs and plans. Because I am also an artist, I see the whole picture, a very clear vision of what it would look like. And once you see this vision of how it LOOKS and WHEN is clearly in your head, you can calculate backwards to the present using reverse engineering in order to see and plan what needs to be done to get there.

I also like to focus on a clear delegate of missions while looking at the big picture, to push for goals by using both Japanese style of group-team work and Israeli style of moving fast to explain and lead the way creating a teamwork environment with the responsibilities and initiative leaderships. I don’t do everything by myself but find people who can do better than me, give them the clear vision and let them do what they do the best or give them clear ideas to do things better.