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What interested me most was how Takeshi minimalized costs and ran such a smooth operation. We talked quite at length about the Japanese mushroom industry_emdash_how tight the margins are and how stiff the competition is. Fuji Kinoko Center has a very small production of only 20~30 metric tons of mushrooms a year, but to the contrary, would actually lose money if it tried to expand production further as well as face a lack of buyers. As Takeshi put it many times, they have a very special niche. Fuji Kinoko Center operates and markets itself based on being an environmentally-friendly local grower, capable of great flexibility in meeting or changing orders on a moment's notice. As oyster and king oyster mushrooms are the facility’s main mushrooms, Fuji Kinoko Center primarily uses Japanese cedar, which is abundant in Shizuoka Prefecture. Takeshi boasts that the facility's cedar sawdust is 100% locally sourced from periodic thinning of forests on Mt. Fuji and its foothills, a Japanese government forestry practice that involves periodically felling and removing large trees from forests to encourage more biological diversity in forests and enable young trees to grow (younger trees grow faster and absorb more carbon, so this works as carbon sequestration as well). This kind of sawdust from non-commercial trees and not tailored to mushroom cultivation still works just fine for Fuji Kinoko Center and is cheaper to boot.

In addition to locally sourced Japanese cedar, Fuji Kinoko Center requires some deciduous sawdust for its shiitake and wood ear mushroom production, which is sourced from a commercial producer based further north in Japan. Takeshi makes a firm point about not using any chemical compounds (even pH regulators) in the farm's production. To adjust the nutritional content of the substrate, he uses beer lees (sourced from a local Sapporo Beer factory), and rice bran (from a neighboring rice miller), with only his wheat bran coming from overseas, something he calls “unfortunate but unavoidable", given there simply isn’t enough wheat and cereal production in Japan to supply the domestic mushroom market’s needs. Otherwise, Takeshi’s view of Fuji Kinoko Center is a model of sustainable, circular economics, something he is frequently called upon to lecture about at local schools and civic organizations. The facility uses renewable local resources, and after harvest, the substrate is loaded onto a truck and delivered to a nearby dairy farm, where it is mixed with manure and composted before being sold to local farmers as fertilizer. Nearly everything, including the finished products, is sourced and consumed locally, which minimizes fuel transportation costs, and emphasizes environmental sustainability.

The key to sustaining profitability is twofold. The first part is minimizing production costs, which Takeshi does by maintaining and creating his own spawn, something he learned from a two-year trade school program on mushrooms. Spawn is one of the biggest costs of large-scale mushroom farms in Japan. Takeshi has also worked to adjust the production process and the balance of sawdust and nutrients such that all the different varieties can be incubated in the same room under the same temperature regulations, with only the spawn run being conducted in specialized conditions. Production of the company’s charcoal-colored oyster mushrooms also ceases in the summer, when air conditioning costs for the heat-sensitive oyster variety are too high. The second part is that the company has its niche.

While Takeshi hedges on whether the company’s production methods meet the technical, legal definition of “organic” (whose vagaries he is not well-studied in) he focuses on his zero additives cultivation approach to pitch their mushrooms. Fuji Kinoko Center’s king oyster production mostly goes to membership-based co-ops that place orders in bulk and pay a small premium compared to regular wholesale market prices. As Takeshi described it, such groups only buy from producers with a well-established track record, who have the ability and willingness to show them what goes into the substrate (and are particular about using only 100% sawdust cultivation mushrooms, which eliminates nearly all large-scale commercial king oyster and oyster mushroom production in Japan). Fuji Kinoko Center is also the only mushroom farm in Fuji City and neighboring Fujinomiya City, which provides a nearby market of nearly 400,000 people. Takeshi emphasizes locality in all his marketing, and by being local, he can be flexible to variations in demand at supermarkets, local restaurants, and wholesale buyers who also have high standards for taste and are picky about various parts of the production process. Takeshi explained that their biggest client for oyster mushrooms is the school system (which in Japan, by government policy, emphasizes local ingredients where financially feasible), but that people supervising the food orders frequently make mistakes and at least once a month he gets a 4AM phone asking him to run to the supply depot with another crate of oyster mushrooms because the initial order wasn’t sufficient.

Both the Fuji City school lunch depot and the Seikatsu Club co-op buy directly from Fuji Kinoko Center with no middle men. So, while, these buyers only pay a slight premium compared to market prices, the lack of any intermediaries and the ability to sell large quantities of mushrooms on set, yearly contracts enables a small operation like Fuji Kinoko Center to run smoothly and profitably, and largely insulates them from steep variations in market prices. This is what Takeshi meant when he described the company as a niche producer, but I would call it a model example of how small growers can operate and compete even against big companies with national distribution systems.