Hanabatake Farm runs into trouble

At Hanabatake Farm in Hokkaido, manufacturer of the famed Nama Caramel, a major layoff of employees is taking place. The farm is owned and operated by TV personality and entrepreneur Yoshitake Tanaka.

Of its four facilities, the Sapporo factory, which opened in July last year, will be temporarily closed as of the end of August. While 60 full and part-time employees are to be assigned to other facilities or retail stores, it has been reported that approximately 300 dispatch workers may not have their contracts renewed.

According to a source at the local labor union, “Some employees quit due to the company’s request to work at a location 100 kilometers away from Sapporo. There is much criticism about the layoffs too.”

Problems are occurring at the Tokyo retail store which opened in Harajuku last month. Only 10 days after its opening, the hourly wage of 1,300 yen for part-timers was decreased to 1,000 yen, and work days cut back drastically. The store opened with a staff of 50, but now has lost 20 workers.

Founded in 1992, Hanabatake Farm became a popular brand since the development and sale of the Nama Caramel. Sales jumped from the 300 million yen range to over 5 billion yen in a matter of two years.

Hanabatake Farm has acknowledged that it is undergoing corporate restructuring.

Business consultant Kozo Hato comments, “There is nothing complicated about the manufacturing process of the Nama Caramel. Despite the fact that others are following suit and selling similar products, the farm has continued to expand their production and sales channel at a rapid pace. It’s a supply-demand problem.”

To be a true entrepreneur Tanaka has much to learn, particularly in human resource management…

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6 Comments

sk4ek at 05:40 PM JST - 22nd August

A tough balancing act when your product is so ove-hyped in the media (although Tanaka was responsbile for much of the over-hyping)--at first the product was a hit because it tasted good, was something new, and was made in small batches by hand in a single production kitchen. But as its popularity exploded, he needed to meet demand without flooding the market, which would reduce the product's cache among consumers, while not restricting supply to the point where people would get frustrated with not being able to find it anywhere. As the article notes, the fact that there were almost no barriers to entry for competitors (aside from the question of authenticity) kind of doomed the "only one" status of the product from the beginning, and when Tanaka ramped up production to the point where the product was no longer hard to come by, there was no longer any way to maintain the momentum.

Great tasting caramels, but this guy might have gotten a little too eager to grow.
gogogo at 11:07 AM JST - 23rd August

Sounds like he runs the company like an extended family which is the worst thing to do in business yet I see it all the time in Japan.
lunchmeat at 09:11 AM JST - 24th August

According to a source at the local labor union...

Surely this is relevant.
fds at 11:30 AM JST - 24th August

the problem is that fads in japan boom for a very short time so you have to get in and make your money and get out before the bust. to me sounds like he's just trying to get out before the bust which is smart business although unfortunate for the workers.
terebiko at 01:52 PM JST - 24th August

Hope everything works out for the better. Hokkaido doesn't need to lose more jobs. Sounds like better management is needed. Good luck Mr. Tanaka.
illsayit at 04:03 PM JST - 31st August

Have no clue what you are talking about, there is another caramel that is older I beleive that I like, BUT, perhaps the re-shuffle, is to down size to little caramel stores? Each their own flavour?