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Tech & Innovation
JUL 5, 2013

Oreno Restaurants & Its Innovative Business Model

By Steven Neo Say Bin

I am passionate about food, and my friends will frequently recommend great restaurants and eateries for me to visit. When I heard about the Oreno restaurants in Tokyo which are offering Michelin star food at 居酒屋 izakaya prices, I am intrigued at how the restaurant manages to serve high quality food, such as foie gras, truffle, and lobsters, at affordable prices. After healthy servings of food and drinks at two Oreno restaurants, I am beginning to see how Mr. Takashi Sakamoto, founder of used-book retailer Bookoff Corp., is transforming the industry with his innovative brand of 立ち飲み屋 tachinomiya (standing bar) eateries.

Employees First to Maximize Customers Satisfaction

In online interviews, Sakamoto-san revealed that he is in the business of offering happiness to chefs and customers. This belief is reflected in his innovative business model that goes against conventional thinking. In the traditional F&B business model, companies are concerned with streamlining operations and cost reduction with only 30-40% of sales allocated for procuring ingredients. As a result, the traditional model breeds poorly paid employees in high pressure working environments that might stifle creativity and motivation.

Sakamoto-san re-invents the traditional F&B industry by creating a highly motivated group of employees that positively influences customer satisfaction and overall profitability. He achieves this feat by allowing chefs to display their culinary creativity with 60% of sales allocated for procuring high quality ingredients. With consolidated procurement across 18 Oreno restaurants that are situated within close proximity of each other, Sakamoto-san is able to exert bargaining power over suppliers to gain advantages over ingredient pricing and quality.

Oreno restaurants are able to maintain its profitability by leveraging on high customer turnovers. Customers only have a two hour dining limit in a standing environment, thus maximizing restaurant capacity and generating quick turnovers. In Oreno Italian, it is able to accommodate around 40 people with 4 customer turnarounds each night, thus generating around 160 customers per night and a total of approximately 5,000 customers per month. With an averaging spending of 4,000 Yen per person, the restaurant can generate sales of 20 Million Yen per month.

Employee motivation is high as they are able to embark on culinary adventures to satisfy customers to the best of their abilities. They are also rewarded for their hard work where approximately 25% of corporate profits are distributed to employees every 3 months. With this innovative business model, Sakamoto-san was able to lure Michelin star chefs from top restaurants all over Japan, and expand his chain to 18 restaurants in Tokyo with an upcoming new outlet in New York, USA.

Customer satisfaction is achieved as Sakamoto-san has successfully created a chain of restaurants that boasts Michelin star chefs offering high quality food at affordable prices that is accessible to everyone. The restaurants have a strong following amongst female diners, with reservations fully booked one month in advance and long queues outside the restaurants daily.

The next time you are in Tokyo, you can visit any of the Oreno restaurants in town for affordable Michelin star food. Though the queues will be long, the great food, prices, and lively atmosphere will more than make up for it.