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- [00:00]
Tom Edwards
Foreign.
- [00:12]
Hello and welcome to the Entrepreneurs on Monocle Radio. The show all about inspiring people, innovative companies and fresh ideas in global business. First up today we'll head to Washington state to meet a former software entrepreneur who traded code to for cabinetry and built one of America's most innovative kitchen companies.
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Scott Hudson
Kitchens are so primitive in the US they're just boxes and also the quality of most options is really low. So creating a system that's focused on innovating around cabinetry seemed really promising.
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Tom Edwards
And later it's off to Japan to hear about a homegrown beer brand with the ambitions to go global.
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Almost without exception, people from other parts of the world respect Japanese quality. Internationally, we work, I guess, a bit harder to educate the consumers and to explain Okinawan culture to them and our beer.
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We'll also head to Lisbon for some house news. All that and much, much more. Ahead on the Entrepreneurs with me, Tom Edwards. You're listening to the Entrepreneurs. Can a kitchen function more like a workshop? That was the question motivating Seattle entrepreneur Scott Hudson nearly 25 years ago. Henry Built is the company that emerged from his tinkering. It's now a leading high end kitchen builder producing cabinetry, drawers and fittings. A team of 120 designers, engineers and craftsmen produce some 600 kitchens annually from their Seattle facility. Monocle's correspondent in the city, Gregory Scruggs, toured the factory and showroom. He began by asking Hudson about his decision to exchange bits and bites for hammers and nails.
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Scott Hudson
I started the company in 2001 after being in publishing and software for about 12 years and had spent the last six years raising money, venture capital. But then in 2001 the second one hit the wall and, and we had to sell it for the technology and I decided to take some time off and I started working on my house. I had renovated several houses myself while working in software in the evenings and it was, I loved it. We bought another house on Vashon island and I just kind of poured myself into that and along the way started thinking about creating a business that I would sort of not run. I could go back to software and keep that going on the side. That was kind of design oriented and mostly around at that point furniture because there's in 2001 it was very difficult to get high quality modern furniture. That's changed quite a bit since then. But in the US back then it was, it was tough. Started with that and then quickly realized that the kitchen was a unique opportunity because kitchens are so primitive in the US in particular. But in general they're just boxes. They sometimes look nice. They're really hard to do, but they're kind of process of taking. It's like a collage, you know, I'll get a cabinet maker, they'll make the cabinets, I'll find the knobs off, you know, or my architect will, and we'll get a countertop. And it comes together and it often has multiple things that didn't come out quite right. And it's still just a bunch of boxes and a work surface. But from living in New York, I used to walk by a company's showroom named Buffy, which is an Italian kitchen system company, and it started to ring bells and I started looking into that and I thought, why don't we do this in the US there's really no one in the US that works that way that thinks of the kitchen more like a car. We're going to industrially design this whole thing so that it's really well integrated. Those companies, a few of them, maybe three or four of them European companies, had unique functionality that they had developed that made a lot of sense. But to me, they were inflexible in some ways. They were kind of more processed than most people might want in their home. They weren't designed for integration into an existing home as much as here's an object that, you know, has a certain quality, if you put it in your house, it will be cool and interesting and hopefully function well. But they also had quality gaps. And so I started just playing around with that idea. We built a prototype and it very quickly, thanks to having a little bit of web experience, started a website and we had people calling us, becoming clients from really far away. So like a guy who lived in China, had a house in Hawaii, someone from San Diego that walked by. We were striking a nerve, like somewhere between something that feels really custom made and crafted and something that has system performance quality. And at that point it was very primitive that, and I had no idea how hard it would be. But I just was so enamored of the idea that you could improve the way I felt to be in a house. Like, I always, always feel too sedentary in a house. Like I should be making something. You know, food is something you can make. But the kitchen is not usually organized as well as like a shop where you would make something physical. So that idea of, wow, this is a really cool experience to have in a home. And also the quality of most options is really low. So by creating a system that's focused on performance, where you're innovating around what people usually call millwork or cabinetry seemed really promising. And it's also way harder than software. You can't fix bugs from thousand miles away. You have that client in Hawaii, you have a client in San Diego, and you have to figure out how to support that. Fortunately, we had some capability in doing that. We had early successes with that, and the business grew largely online to the point where 25% of our business was in New York in 2005, even though we were based here. And so we opened a showroom in 2006 in Soho that was really successful. Very tiny, kind of modest, but really successful. And we just kept focusing on developing this system around what it feels like to work in a kitchen. Mastery of cooking, serving, and that became the brand.
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Tom Edwards
So we're standing here in the front of house, if you will, at Henry Built, where we are in a finished kitchen. What are some of the signature touches that make Henry Built kitchens so unique?
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Scott Hudson
So the goal is to have the right thing in the right place and to spend as little energy as possible doing the stuff you don't want to do as much. So this spice fitting tells you what it's for. If someone takes these spice jars out and uses them, they'll know where to put them back in extreme cases. So this is visual indication of what things are for. You have knife storage, utensil storage, you have flatware storage. All of which is both aesthetically artful and really highly functional.
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Tom Edwards
I mean, right down to slotted areas that fit the exact sizes of the forks and spoons for serving.
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Scott Hudson
Yeah. And the trick of that is this will actually hold 95% of what you can buy. But it is shaped in a way that it says, the forks go here, the large spoons go here, the small forks go here. The tools that we design are specialized, but their location is flexible. So, for example, we're looking at a colander that is made of wood and stainless steel. You can remove that from this hidden storage or toolbox on the countertop, and you can put it on the backsplash along with other tools, other systems, like a knife, a knife block that magnetically attaches to the backsplash, keeping the countertop clear. I'm going to remove this colander from the wall, and I'm going to put it in this recessed drain field next to the sink, which it fits perfectly in, slide it over the sink, rinse the lettuce, and once I'm done and it's drained a bit, I slide it back over into the drain field. And it's out of the way. So that's what I mean by performance. Kitchen things are really tailored into the space. So you're taking something that might normally just be tile or stone or a countertop, and you're making it interactive and flexible and able to take these specialized tools.
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Tom Edwards
That was Scott Hudson, the founder and CEO of Henry Built. And you can find out more about the business by heading over to henrybuilt.com you're listening to the entrepreneurs. We head to Okinawa now, where just this past month, Orion Breweries made history as the first local company to be listed on Japan's prime market. The brewer now faces the challenge of competing in the country's crowded beer scene while pushing for growth overseas. Monocles at Ryuma Takahashi caught up with Patrick Dugan, the company's head of international business, to hear how Orion plans to take its brand global.
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We're small, but we've been around since 1957. We were set up in Okinawa is our heartland and our home, and was set up with the aim actually of helping to heal some of the wounds in Okinawa for the people there. And obviously, as we know, they had gone through a very hard time and to bring some happiness and opportunity for the island through beer. Oriones very close to the people of Okinawa. It's something that is really massively important to all the people who are leading the company and all of the workers.
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Patrick Dugan
On the 25th of September, last week, Orion B list entry listed on the prime market in Japan. Congratulations. This has been big news in Japan. What kind of impact were you aiming for when you decided to go public?
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Tom Edwards
Okinawa is, you know, not necessarily historically the most prosperous of the Japanese prefectures. And we are very proud to have gone public, especially because we are the first major industrial company from Okinawa to have done so. That was part of the mission when we got involved in the business as the sponsors and as the management team to bring real pride to Okinawa. By doing that, we feel we've achieved that in the business. Performance and listing is a validation of that strategy.
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Patrick Dugan
I think when people think of Orion Beer, it really holds a unique position as a beer that symbolizes Okinawa among Japanese beer. Why do you promote Okinawa so strongly and what do you see as the potential of the Okinawa brand image?
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Tom Edwards
I think there's a couple of things in that question. One is we do very much on a basic level. Our beer uses the water from the Yanbaru Forest, which is UNESCO protected. So it's a wonderful water source. And we use barley and yeast in some of our Beers that also come from Okinawa. So it's not just the people making it that are connected to Okinawa, also our ingredients. Okinawa, I think means a lot of things to different people from people from other parts of Japan. You've heard the phrase the Hawaii of Japan. I think in relation to Okinawa for overseas visitors, it's slightly different. But common to all of that is that there's a real uniqueness. To me, I've been coming to Japan for 20 years. Okinawa is a place that really has a special atmosphere and there are beautiful beaches, there's beautiful scenery. But there's a warmth to the people, there's a warmth to the character. And that's what we want to convey in our beer. We want to bring the happiness of that Okinawa lifestyle. The chilled side of Japan. If I may say that a more relaxed Japan than maybe you get in a big city like Tokyo. It's a big word, but it's the truth. And I think Okinawa is very much associated with that. And Orion is very strongly associated with Okinawa in the minds of especially Japanese people.
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Patrick Dugan
I've noticed that your company operates the Orion Hotel in Okinawa. And I often see for example, Orion beer T shirts and some collaborations with fashion brands. I think your putting effort into IP business, beyond just pure business. What is the strategy behind this?
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Tom Edwards
You're right. It's a business that's been around for a while and been successful. But we have realized that we can take that to the next level and we're doing so. So we're expanding our range of partners in terms of the breadth of the products which which the brand can be associated on so it can be seen by more people. So I mean, if you've been to Naha and walked down Koksaid Ori, then there are some wonderful Orion branded products. We've collaborated most recently at the beer with Gap with Villebong, an Australian brand. So we amplify the brand to some extent by working with these other fashion brands. And that's something that's also gained attention internationally. It's a nice margin business to be involved in because often it's our partners that are doing the management of production and the actual selling. So in terms of the financial model, it's a very attractive segment of the market to be in. And also if done correctly, it brings the brand greater awareness. So people, they go back to Korea, they go back to Taiwan, they go back to Tokyo wearing a cool Orion T shirt. That's a walking billboard for us. It's something where we see as very important.
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Patrick Dugan
I think Japan has several very large big companies with strong domestic and international power. In such competitive environment, what's your strategy for continuing to grow?
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Tom Edwards
Well, we're small, but perfectly formed is the way I would describe it. Or we could say we're the original craft beer. You're right. We face their big giants. We are, I guess, to be frank, quite fortunate in some ways in that we are a long way away from the mainlander because Okinawa itself is a relatively smaller market. Perhaps there's less focus from those giants who are fighting each other in other parts of Japan. But when we go outside Okinawa, we don't try to take on the giants head on. We are fortunate in a couple of respects. We have wonderful liquid. Genuinely. There's a taste difference, a little bit softer, what we call sessionable. So it's quite easy to drink quite a lot of it. I've been in the beer industry for 28 years, which makes me sound very old. Hopefully I don't look it. And I really love Oreo and I have to say it's a wonderful liquid. Anyone who drinks it loves it. But because Okinawa is actually a very expensive place to produce beer, because it's an island, we have to ship a lot of things in in terms of the bottles etc, it actually means that we cannot compete on price. So we can only compete on quality and on the strength of our brand. That in a way is fortunate because it means we can concentrate on the things that we're. We're good at and, and touchwood. It's. It's working. Our overseas sales are growing very quickly and have done over the last few years. And also in the rest of Japan outside Okinawa, we're growing with beer and with rtd, what we call ready to drink.
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Patrick Dugan
So let's shift to your overseas strategy. First, which countries and markets has Orion Beer expanded into outside of Japan?
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Tom Edwards
You can buy Orion in, I think the last count 14 countries, possibly more if you count in Europe. It goes across some boundaries, but we divide our markets into focus markets and then a couple of other segments because we are a small team and small business. Taiwan is close to Okinawa and they're the number one source of visitors to Okinawa and is our number one international market. We are present in all of the convenience stores and supermarkets, often with multiple products. And a lot of that. There's a massive synergy in our business model which benefits from visitors coming to Okinawa and seeing Orion and then sampling it back in their own countries. And at the same time, by seeing Orion Beverage in those countries, it raises Okinawa's Profile. Our big markets are Taiwan. Korea is becoming big. Other Asian markets where Hong Kong, China also, and even Australia. You may not expect it, but we're with a couple of different products. We've cooperated with one of the retailers on our product there, and we're in the number one and the number two alcohol retailers in Australia and obviously the US There's a strong understanding of Okinawa, strong presence, and it's a big imported beer market. We have America as a focus market.
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Patrick Dugan
Do you differentiate your approach to marketing and branding when doing business in Japan versus international markets?
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Tom Edwards
Yes. The first thing I should say is this is the way most beer brands operate in their home market. The understanding and the perception of their brand and the positioning of their brand is usually very different. We also adopt that policy. So. But fundamentally, we still have. There's some of the pillars of the brand are the same, whether it's Okinawa, whether it's the rest of Japan or whether it's international. And that is, you know, based around the Okinawan character, the natural beauty of the place. But I think it'd be fair to say that internationally we call it dialing up. We dial up the Japanese quality element because almost without exception across the world respect Japanese quality. Quality. And especially in beer and in food and beverage, I think there's a rising tide of that. So we want them to understand that we are Japanese and we are within that Japanese quality halo, or umbrella as we. As we call it. But beneath that, that we offer something really different, and that's that. That warmth and that relaxed brand. We're currently certainly in Asia only brewing in Okinawa. And that's not necessarily what the giants do. They've got a lot of different brewing in different places. So that's. That's one key pillar that we also. We also talk about. But because we're super premium in pricing internationally, we work, I guess, a bit harder to educate the consumers about why we're worth paying a little bit more for and to explain Okinawan culture to them and our beer.
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Patrick Dugan
How do you distribute Orion beer internationally? Is it mainly through the license production?
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Tom Edwards
No, no. We only. Leaving aside the European license production, everything is produced in Nago. We have a wonderful relationship with shipping companies and a local logistics company who are practically part of our team, I think. I mean, last year we were 10% of the Japanese beer that was exported was Orion. So we are, you know, starting to become a big part of Japanese beer exp. So we're a very big part of Okinawa exports. We export cans, bottles and kegs. The Bottles are challenging because typically in Japan, bottles are returnable or they're used multiple times, but they're not internationally. So that's something we're trying to figure out the value chain for that. The business model for those is a bit more challenging. But kegs, keg beer, we send keg beer as far as the east coast of America and then it gets delivered back to Nagawa and we fill it and we send it back out again. So we do keg beer in seven countries. That's when Orion, I think, is probably at its, you know, at its best. In a bar where there's lots of throughput, that's. That's when keg beer can taste fantastic.
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Patrick Dugan
With this ipo, I think Oyongb have achieved one milestone. But looking ahead, do you have any visions or goals for the company's future?
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Tom Edwards
We have many, many goal visions, yes. As a Japanese company, we're always planning quite well in advance, so. Absolutely. But fundamentally, we will not rush into expansion. We will be cautious because it has to be sustainable, but we definitely want to become, in our focus markets, more relevant. So we want to be seen alongside some of those giants as a really unexpected choice to be available for Europe, you know, to be our licensed business there. In terms of license brewing of the product. We really would like to see that develop into some of more of the other markets. As Japanese food and beverage expands, we want to expand with it and bring that Okinawa story to life, because so many people just don't know about it.
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That was Patrick Dugan, senior managing executive officer and head of International at Orion Breweries, in conversation with Monocle's Ryuma Takahashi. You can find out more by heading to OrionBeer Dash International. You're listening to the entrepreneurs. We head to Lisbon now. I'm delighted to say I'm joined here in the studio by two of Monocle Radio's finest Portuguese speakers. It says here, executive producer Carlotta Rebelo and senior correspondent Fernando Gusto Pacheco. Welcome both.
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Carlotta Rebelo
Hola, Tom.
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Tom Edwards
Hola, Tom.
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Now, tell me, you just got back from the other city of light. What did you get up to while you were there, Fernando?
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Fernando Gusto Pacheco
Oh, Lisbon is always a pleasure to go, right, Carlota? I mean, we actually had a lovely task. I love Portuguese food. It was a sunny, beautiful day and of course, we're celebrating the new launch of a product made in collaboration with Claus Porto, which is an iconic brand. And I think even if you haven't been to Portugal, you will know about Claus Porto. They make amazing soaps, amazing scents. It was A delightful evening.
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Carlotta Rebelo
A regular brand that shows up in our markets here, our Christmas markets and summer fare as well.
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Tom Edwards
From your initial description, that did not sound much like work. It sounded like a big old jolly.
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Carlotta Rebelo
No, it was work. We worked very hard, didn't we, Fernando?
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Fernando Gusto Pacheco
Actually, we did something quite special, you know, because people say Fernando and Carlotta go there close to the entrance to say hello to the guests. We did our best and sometimes I spoke in English and like, oh, are you Portuguese? You know. But in the end was amazing.
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Carlotta Rebelo
No, it was a wonderful event. The venue was the new contemporary Art Museum, which is a new wing of the Calu School Benken foundation, one of the oldest museums in Portugal. And it's this new beautiful wing that was designed by the Japanese architect Kengo Kuma, inaugurated just last year. So we were like on this, you know, 29, 30 degree heat end of September, under this beautiful wooden and brick canopy designed by Kuma. And I think we were expecting 80 people and 250 showed up, Tom. So the Lisbon best and finest showed up. Everyone was dressed so well at the beginning of the event, I thought we might be overdressed. And then immediately I found out we actually wore extremely underdressed.
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Tom Edwards
Yes. And tell me how fragrant the crowd. So very stylishly clad. Fragrant. And just again, let's sort of dig a little deeper. Carter, you mentioned these are kind of staples of our, of our markets. But these products are so beautiful. Just. I know it's the radio, we can't do scratch and sniff, but give us a sense of how fragrant things are.
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Carlotta Rebelo
I will give you my best attempt. So this is, of course, as Fernando described it, Claus Porto, a heritage Portuguese fragrance house. And this is a collaboration that we've done with them a new scent called Soleil Zest. Now, it is this scent that celebrates like lightness and joy. We described it as, you know, continuing summer. It's very citrusy, the scent, and it has a bit of white musk that gives you a little soft embrace when you spritz it. It's very elegant.
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Fernando Gusto Pacheco
And that soft embrace is what makes it different. Because, let's be honest, there's quite a lot, you know, some citrusy perfumes around there and, you know, it's lovely, good for the salmon, but this one, there's a strong base there. And I think I honestly, it's not because it was kind of a commercial trip as well, but I love it so much.
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Tom Edwards
I think, is it going to be in the regular Fernando Augusta Bocheco rotation?
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Fernando Gusto Pacheco
That's the question absolutely tone and you know, and Tyler in his speech, he says, you know, of course it's autumn, winter, so perhaps it's a bit of a surprising launch as well because some people think, oh, we should be a little bit woody or you know, in the winter months. I don't think so. I think we need some freshness as well.
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Carlotta Rebelo
And then the evening continued in a really elegant and beautiful. Because there was then the sit down dinner at the museum where the chef, the resident chef of cam, he created this menu, Andre Magellanic, that's the name of the chef. He created a four course menu. And I have here a printout, a little prop to show you Tom, where he. Quite a dainty little menu it is. We're very classy like that. Basically he was explaining before the start of the dinner how for the past couple of days him and his team were spritzing the scent in the kitchen, trying to come up with how to replicate that scent into the dishes. So the starter, for example, was this amazing red prawn tartare with like lemon as the main flavor.
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Fernando Gusto Pacheco
It was a highlight for me.
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Carlotta Rebelo
Then the main dish was quail with lemon and citrusy couscous, which was something very different. I had never eaten anything like that. Then we had this little palate cleanser that was a champagne coupe with a little lemon as well, sorbet. And I really loved the dessert, even though it wasn't. It was. We were quite full by then. It was this panna cotta bergamota, which was incredible. I loved it.
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Tom Edwards
And extra points for a rhyming pudding.
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Carlotta Rebelo
Always, always.
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Tom Edwards
So, Fernando, what is the fragrance of the coming season? Okay, we said it's the end of summer vibes. Of course, Portugal. If people haven't done a late summer trip anywhere in Portugal, they should. As we drift into the autumn here in London, what should the autumn be? You know, smelling of? We've got, you know, seasons of mist and mellow fruitfulness and all the rest of it. What's the kind of, what's. What's marking your card? Fragrance wise.
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Fernando Gusto Pacheco
Honestly, as I said said before, I think we should escape from the obvious. And I think a launch like this in late September, it's quite interesting. Citrusy. People would associate with summer, but as I said, with the strong base, it's perfect for the season. But of course, there's so many interesting brands and interesting launches there. I think the fragrance market keeps on growing. Very special. But you know, my favorites are always Celine and nightclubbing and of course Claus Porto.
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Tom Edwards
Always very Good, Fernando. And so much chat about these amazing fragrances. Carlotta, did you learn more or talk more to the people who actually craft these beautiful things?
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Carlotta Rebelo
Yes, I was actually able to meet at the event Daphne Bouget, who actually is the perfumer who made this scent. She is a perfumer at Firmenich. She collaborates heavily with Claus Portrait and despite being usually based in France for this scent, taking our brief for this desire for a fresh new scent, she was based in Portugal and created it using materials and elements that she found in the Portuguese landscape, which was amazing. And then also at the event we had this beautiful installation made from wicker and just crochet. I can't even explain it, but basically were these amazing flowers made of all these materials that created this beautiful display where the bottles were lit up from the bottom. And I think this really replicates the vision of Claus Porto as a store because their shops are also very visually driven. And I know, Fernando, you went to one of the shops as well, their main store, right?
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Fernando Gusto Pacheco
And it's amazing by pure coincidence, listeners, honestly, just two days after I went with my father on holiday in Porto and I went to one of the original shops as well, because Claus Porto, of course is from Porto. It's a three story townhouse in Rua das Flores. I would recommend everyone, if you're visiting Porto, to go there because it's not only a shop, there's also a museum telling the history of close Porto there.
- [28:00]
Tom Edwards
Great recommendation in fragrance, in tourism, hospitality, fine dining. Fernando Carlotto, thank you both very much indeed for being with us. And that is all for this episode of the Entrepreneurs. We'll be back at the same time next week. Do look out for Eureka, available every Friday. The programs produced by Laura Kramer with audio editing by Jack Dewars. My thanks to them both. Don't forget to follow us and catch up with the archive wherever you get your podcasts or@monacle.com and if you'd like to get in touch with the team, email Laura on lrkonical.com I'm Tom Edwards. Goodbye and thanks for listening to the entrepreneurs.