Profitable Street Eats

Introduction

Osaka, Japan, boasts a rich history in commerce and trading. Today, it is renowned for its vibrant street food and casual dining culture. Many iconic Japanese street food staples, such as okonomiyaki (savory pancakes), takoyaki (fried octopus balls), and kushikatsu (deep-fried skewers), originate from this unique city and continue to be popular dishes that are consumed by both tourists and locals alike.

I wanted to understand the business model that has allowed Japanese street food vendors to generate high profits and thrive in Osaka while selling quality food at extremely low prices. For 10 days, I visited various street food stalls throughout Osaka in order to uncover the business model that has allowed the vendors to become successful in this city.

Methodology

I utilized visual observation skills as well as informal interviews in both English and Japanese to gather data that allowed me to determine what aspects of a vendor's business model has allowed them to generate high profits and thrive in Osaka.

I initially planned on interviewing multiple street food vendors in different locations within Osaka and asking them questions that specifically targeted their business model. However, it is unrealistic to expect small business owners like these vendors to simply give away proprietary information when asked, so I must use a different approach to understand why and how they are operating this type of small business. Thus, an informal style interview that allowed me to build a sense of trust with the owners became a more effective way to gather information.

Results

My conclusion regarding the business operations of these street food stalls in Osaka turned out to be very different from my initial hypothesis.

I initially believed that many local people would come to eat at the street food stalls every day, and that would be where a majority of their sales would be from. My background visiting similar street food stalls in Taiwan led me to this belief since many Taiwanese citizens, including my father, would frequently eat street food at least once a day. However, street food--particularly in Osaka--seems to be reserved for more special occasions rather than daily grab-and-go meals for locals.

In order to understand this, must understand that street food in Osaka seems to be found in two distinct places--near shrines and temples or in popular tourist locations.

Street Food in Popular Tourism Locations

Popular tourist regions in central Osaka, such as the Dotonbori district, Namba, Osaka Castle, or Shinsaibashi had an abundance of street food in comparison to other regions. This signifies that the street food most likely targets tourists, whether they are from Japanese or foreign backgrounds. Additionally, I visited regions outside of the central Osaka area, such as the Kita Ward, and did not find street food to be as widespread as those found in the two distinct places I mentioned. If the street food was more for daily grab-and-go meals, as they are for Taiwanese people, then there would be a greater presence of vendors in neighborhood areas and less popular tourist locations.

The street food stalls in these locations do not appear as the traditional makeshift street food carts that most people may imagine. These stalls appeared more like established locations that had a permanent spot outside a building or a shop. Additionally, many of the vendors spoke English or had English menus ready in addition to the Japanese menus. Some vendors even had Korean or Chinese menus, since a majority of the tourists in Osaka were either English speakers or of Korean or Chinese backgrounds. I found it especially interesting that the vendors were able to tell whether a customer was a foreigner or a Japanese person and then accommodate to speak English to the foreigner regardless of whether the foreigner could speak Japanese or not. Even though my appearance automatically allows others to see me as a foreigner in Japan, I would still be able to speak Japanese in many tourist locations that I visited. The fact that almost all of the vendors I approached in these popular tourist areas spoke English and provided English menus meant that they would regularly get foreigners as customers, and it was likely where they made most of their sales. When I spoke with Japanese customers, I also found out that many would also be tourists from other regions of Japan--such as from Sapporo--rather than locals from Osaka.

Street Food Near Shrines or Temples

The second place street food can most commonly be found is near shrines or temples. The street food here appears more like the traditional image of street food where the tents need to be set up and it seems more like a pop up.

This location is special because these tents most likely appear during holidays or festivals and do not permanently stay at the shrines and temples. I visited Osaka during the new year, and in Japan, there is a tradition known as "hatsumode", or the first shrine visit of the year. It is a popular tradition amongst Japanese locals to visit a shrine or temple on New Year's Day or the first few days of the year. Typically, food stalls will be present in the area during this time period.

This is strategically relevant because large crowds will gather at popular shrines, especially on January 1, and lines to enter these shrines may be as long as several blocks. This means that the vendor's primary customer will be those that are participating in "hatsumode". Many of these street food vendors will already have food that they have pre-made before hand and kept warm on a hot stove for example, so the food can be given to the customer faster in comparison to vendors from popular tourist locations. Additionally, since these vendors' target market are the Japanese locals that are participating in "hatsumode" rather than tourists, they were more likely to respond to me in Japanese when we spoke.

While it does not pose a risk to locals or tourists, there is an interesting assumption that pop up street food stalls in these locations serve as a way for organized crime members to make a profit during the holiday or festival season.

Additional Similarities

While the two types of street food businesses I mentioned differ greatly in their location and target audience, there are many similarities in the way they operate.

Firstly, the types of food sold amongst all street food businesses throughout Osaka seem to follow the theme of either trendy foods or traditional Japanese street foods that are easy to make. For example, you will be more likely to see a corn dog being sold in a street food stall rather than a Chinese-style stir fry simply because it is quicker and easier to make. Additionally, in a single street there could be several stalls or establishments that serve takoyaki and okonomiyaki, which are traditional Japanese street foods that originated from this region.

This leads to the second point, where almost all of the street food businesses in Osaka seem to target audiences that are celebrating a special occasion. Whether it be a festival or holiday event at a shrine, or tourists from Japan and other foreign nations visiting Osaka to get a taste of the famous street food, the vendors in both locations seem to differentiate themselves by targeting those celebrating special occasions rather than locals stopping by for an everyday meal.

This is likely due to the fact that for many Osaka locals, the street food they encounter in these two locations can be easily made at home for a much cheaper price than the price they are paying when they buy the same thing from a vendor.

Since the culture here is much different than other cities where street food is considered a daily staple, the vendors must differentiate themselves by targeting customers that are in these two locations for a special occasion, whether that be for tourism, festivals, or celebrating a holiday.

Conclusion

A street food vendor operating in Osaka would pick a location either near a large tourist hotspot or as a pop up shop in a shrine or temple. This would determine whether their target audience is tourists (from either Japan or a foreign nation) visiting Osaka to get a sense of the famous street food from this region, or whether their target audience is a Japanese local visiting the shrine or temple to celebrate a holiday or to participate in a festival. Regardless of the location, vendors must be able to serve quick and easy to make food that fits in the category of trendy foods or traditional Japanese street foods.

Next Steps

The business model that I determined from this research experience seems to be specific to the Osaka region. Not all street food stalls across Japan may follow the model that I determined in my conclusion, potentially due to the differences in regional culture and tourism. One area I can look into for the future would be the Yatai food carts--or small mobile food stalls often found at festivals, walkways, and streets--that are more popular and abundant in Fukuoka. The business operations of this particular style of street food would be interesting to investigate due to its less grounded nature.