They Grow Olives in Japan?
Japan - Part I
When I first heard about olive-fed beef, I didn’t think it was real.
I knew about acorn-fed pork. In Spain there’s an elite class of swine covered in black fur. They only eat acorns. The resulting pork has a unique taste. It’s a delicacy. But olive-fed beef seemed ridiculous.
I asked some culinary-minded friends. They hadn’t heard of it either. I sent around a video titled, “The Rarest Steak in the World.” It showed olive-fed beef being cooked.
Turns out, olive-fed beef is a real thing. You can order it online for ~$300/lb plus international shipping charges. Considering the circumstances, I didn’t think that was the appropriate way to move forward with my investigation. Instead, I decided to go to Japan and see it for myself.
A Cow-Shaped Island Covered with Olive Trees
About three hours south of Tokyo by bullet train there’s an island shaped like a cow. It’s called Shodo Island on the U.S. version of Google maps. The locals call it Shodoshima which is technically the name of the town where the ferry arrives. The port town is barely large enough to be called a village.
Weather in Japan varies greatly from north to south. It’s roughly 1500 miles top to bottom. About the distance from Maine to Miami.
Tokyo is in the middle. It has four strong seasons. As I just learned firsthand, the summer is hot and muggy. It’s cold in the winter. Spring and fall are great.
Shodishima is about two-thirds of the way down south if you look on the map. It’s an arid climate. There’s a rainy season in June. I caught the tail end of it last week. Otherwise, it feels like coastal Spain. Hot, dry, and mild in the winter, it’s a good climate for growing olives.
The story of how this all got started goes like this. We all know the Japanese take their beef seriously. Wagyu beef production is a competitive industry with rigid standards. Farmers on Shodoshima worked Wagyu cows going back to the late 1800s.
There’s no bridge to Shodoshima. It’s one of around 3,500 Japanese islands. I took a car ferry over. While the Japanese have organized logistics for island life, years ago, transit wasn’t as reliable.
Farmers on Shodoshima naturally had less access to supplies. But they did have olives. Around 100 years ago locals planted olive trees. The trees took to the soil and climate. Quickly Shodoshima had a new crop.
Once harvested, olives are pressed for oil. The resulting pulp has some uses, but not on a small, isolated island. Here’s the part that might be mere folklore. Farmers allegedly dried the spent olive pulp on seaside rocks. They mixed the leftover, dried olive pulp with cow feed. The initial idea was to cut down on expensive feed costs. Soon, the local Wagyu beef developed a unique taste.
Life on The Olive Farm
I did some hunting online and found an olive farm with 1,600 producing trees. The owner offered a guesthouse for rent on the farm. I thought this would be the best way to get the facts on the olive-fed beef situation.
The olive farm where I stayed was in the hills south of Takamatsu. It’s called Oki Olive. Both Shodoshima and Takamatsu are part of Kagawa prefecture.
The owner of Oki Olive gave up a career trading stocks in Tokyo to pursue his passion. In addition to being a chef now, he produces his own olive oil with strict precision.
Things were a bit chaotic when I arrived at the farm. Keep in mind, it’s 13 hours ahead for me. With my circadian rhythm upside down, I was ready to sleep in the farm house.
The owner asked if I could wait at the top of the olive orchard. He had 25 guests coming. That turned into dinner, live jazz, and conversation I couldn’t contribute to as none of the guests spoke English. The music was great but went on for 2 ½ hours.
Finally, after three encores, the musical trio wrapped up and I got the keys and directions to the farm house. It was worth the wait. If you haven’t been to Japan, there’s nothing like their attention to design details.
A well-appointed Japanese home has a feel unlike anything we’re used to in the west. For starters, take your shoes off on entry. It has nothing to do with keeping the floor clean. It changes how you feel in the home.
I noticed all over Japan, everywhere I stayed, I felt more relaxed indoors. It made me realize how little thought we put into our living space in the west. We charge through our homes like invading soldiers. We never consider how this affects our mood and overall feeling. I slept better than usual in Japan. Maybe they’re on to something.
The Illusive Olive-Fed Beef
After proper rest I asked my industry expert host about the olive-fed beef. To my surprise, he was bearish on the idea. Outspoken too. It seemed like the olive beef caught foreign attention because it’s an exotic idea. In the motherland, it doesn’t measure up to traditional Wagyu.
I tried the olive beef at restaurant on another olive farm in Shodoshima. My host was right… it didn’t live up to the hype. It was good, and unique, but not exceptional. The advice I got, the right advice, was stick to the tried-and-true Japanese Wagyu.
Back in Tokyo I set out to finish my trip with a proper Wagyu dinner. The food in Japan is exceptional. I ate ramen, sushi and traditional Japanese food for almost two weeks straight. I needed a proper Japanese beef experience before taking off.
Yakiniku is the name for the type of restaurant I needed to find. It essentially translates to, “grilled meat.” The best of these places provide an experience comparable to a first class omakase sushi, except with beef.
I got a few names from food blogs and headed out to finish this quest properly. The first place, the best place, turned me away. The next place offered a table three hours later. I started to wonder if this was all a sign I should go vegan.
A Hidden Gem
Tokyo is so dense they stack the restaurants vertically in thin buildings. You’ll see a directory sign with six or ten restaurant logos next to an elevator. Get in the elevator and head to the corresponding floor. When the door opens, you’re in the restaurant.
I stood outside the second yakiniku that had no space for me. I can’t read one word of Japanese, but the top sign on the directory looked very nice. It had a white background with clean Japanese lettering. I had an instinct to get in the elevator and head up to check it out. Worst case, if I stepped off the elevator into a busy office, I’d pretend I was lost and apologize.
The door opened to one of the best designed restaurants I’ve ever seen. Clean lines, expensive woodwork, minimal clutter. This place was impressive. Yet there were no customers. I didn’t see one table occupied.
There were half a dozen staff who turned to look at me. Not one of them spoke a word of English, not even hello. I pointed at the counter and got an indecipherable response.
Then a Japanese business man poked his head around the corner. He spoke English. He told me his friend owns the restaurant. It’s not well-know. It has some of the finest beef in Tokyo. He asked me, “You want me to tell these guys to take care of you Omakase style?” Absolutely.
What ensued was a Wagyu beef feast of epic proportions. It was a perfect last dinner in Japan. While olive-fed beef didn’t measure up to the hype, top-rated Japanese Wagyu did.
Here’s a link to the restaurant. If you visit Tokyo, it’s worth a shot.
Japan is a traveler’s paradise. If you haven’t been, add it to your list.
The Japanese Money Trouble
Olive-fed beef wasn’t the only reason I went to Japan. Over the next few issues, I’ll share more from my trip. There’s so much to see. I had a list of things to do while there. You could easily spend a year exploring.
Japan is a marvelous country. For starters, it’s immaculate. You could ride the Tokyo subway all day and not see one piece of litter. You also struggle to find a public garbage can. It’s a mystery how a city of nearly 14 million residents can function so smoothly.
The secret is in the culture. Japanese people are respectful. They don’t think they’re better than or less than a visitor. You’ll find them generally patient, respectful, and orderly. This is an ancient society with deeply rooted cultural norms.
I spent a long weekend in Kyoto. I’ve wanted to see some of the city’s temples for years. What’s wild is the visitor’s guide might explain how a shogun built this site as a vacation home in say 1400 AD. It caught fire in 1600, was adopted by some crew of monks in 1700, etc, and here it is today as a monastery of sorts. For around $2 you can tour it and hang out as long as you’d like.
There are an endless number of temples to see. They’re scattered everywhere. You’ll even walk past them in parts of densely populated Tokyo. I particularly like the ones with rock gardens.
Over and over again you’ll feel this deep history all across Japan. Something about the culture just works. Seeing a rock garden built before Columbus sailed on the Mayflower puts things into perspective.
Western societies are adolescents compared to Japan. However, as the west dominated the 20th century, Japan did play an important role. From 1970 on it offered early clues to some of the biggest monetary and economic trends we face today.
Post War Boom of Necessity
After World War II Japan rebuilt its economy essentially from rubble. While the society and culture kept its roots, the economic system got a fresh start. It was back to the status of a developing nation. They didn’t have much to offer the world from a trade perceptive.
Japan has no natural energy source. Think about the 1950s and 1960s without domestic access to oil, gas, coal or even sufficient wood for fuel. It’s hard to get an economic engine moving without energy. It’s a big disadvantage.
The Japanese focused on mastering processes. This runs in their blood. They began building systems, supply chains, and processes needed to export. An initial focus was automobiles.
I’ve always been fascinated by the fact that the two major axis powers of World War II are both notable auto producers. Both the Germans and the Japanese built their way out of the rubble with automobiles.
While the Germans had a history in autos, the Japanese generally did not. In the early 1960s Japan exported ~7,000 cars per year. By 1980 the number was ~3.9 million.
What happened in Japan is mostly due to Japanese culture. They got the process right. This is not something I’ve seen in other cultures. Some Asian nations master mass production of cheap goods. They’re able to duplicate or reverse engineer. That’s not what the Japanese do well. It’s not their style.
You can see this simply ordering a coffee in Tokyo. They’ll grind the beans and hand-pour you a fresh cup of coffee. It’s precise. Or, in a Japanese tea ceremony. If you haven’t had one, try it sometime. The precision and order a server brings to making you a matcha tea is the same inherent process engineers and executives bring to producing any product in Japan. It’s part of the culture.
In the 1950s and 60s the west enjoyed the spoils of victory. The Japanese focused on mastering production processes. Then came the energy crisis.
The 1970s Ignited a boom
By the time the energy crisis of the 1970s rolled around the foundation of Japanese excellence was in place. Oil prices shot higher. The west reeled.
Meanwhile, the Japanese had been importing expensive energy for years. While the U.S. took cheap oil for granted, the Japanese tried to use less of it.
Americans built cars the size of living rooms, the Japanese did the opposite. They needed efficient, reliable, safe vehicles that sipped gas. Again, because every drop came at a huge cost.
The Japanese auto export boom was the result of decades of hard work and quiet focus. There were also electronics and other exports, but automobiles were the big piece of the puzzle.
That meant foreign nations sent gobs of valuable cash to Japan in exchange for its cars, and other items. That cash piled up in a hurry. By the mid 1980s the nation had more money than it could spend. It bought U.S. Treasuries, real estate in Manhattan, and some feared it would buy everything of value along both U.S. coastlines.
The west stepped in. Almost as if to say it would not allow this type of exceptional wealth creation. The Japanese earned their success. The west wanted to stop it. Somehow, the Japanese agreed.
In 1985, G7 finance leaders met at the Plaza Hotel in New York. They hatched a plan called the Plaza Accord. Essentially, the Japanese would devalue their mighty yen.
The chart below shows what happened to the yen over the second half of the decade. Surely the Japanese powers that be had a reason for going along with this. Had they not, the Japanese might have spent the next few decades ruling the international community. The tall guy in the middle of that picture didn’t let that happen.
That event in 1985 set the course for Japan over the next two decades. Economists call it, “the lost decade.” Next issue we’ll dive into what happened to the Japanese stock market in the wake of the 1985 currency agreement. There are implications for what might be next for the mighty U.S. stock market today.
Portfolio Update