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Business

Conveyor-belt sushi rolls again in New York

Restaurants aim to court new generation with a side order of fun

Some Manhattan residents have eagerly welcomed the return of conveyor sushi, in the form of a branch of Britain’s Yo Sushi. (Photo by Elisabeth Rosen)

NEW YORK -- When they heard that British chain Yo Sushi was opening a New York location, Derek and Angela found it hard to contain their excitement. The couple, who declined to give their last names, had been regular patrons of local eatery East, which closed in September when its lease expired, and were eager to find another restaurant in the same style.

"We love conveyor-belt sushi," Angela said.

While sushi enjoys vast popularity in New York, from upscale restaurants to grab-and-go joints, the conveyor-belt format has never gained mass appeal -- unlike in Japan, where for a long time so-called kaiten sushi was one of the food service industry's only consistently profitable areas. The handful of New York sushi restaurants with conveyor-belts have all closed, from outlets of Singaporean chain Sakae Sushi and Japanese chain Genki to local establishments like East, Sushein and Genroku.

"Sushi is traditionally not an everyday food in Japan. Kaiten sushi is popular in Japan because it made sushi accessible, especially for families," said Bon Yagi, president of TIC Restaurant Group, which operates 14 Japanese restaurants in New York, including sushi restaurant Hasaki. "Typical sushi restaurants are for adults, and there is a certain manner of how to eat sushi. But parents can take their kids to eat kaiten sushi and it doesn't bother other customers."

New Yorkers already have a version of inexpensive, accessible sushi not typically seen in Japan, he said. You can find California rolls at many cheap restaurants and even at local drugstore chain Duane Reade.

But Yo aims to widen the choice. The chain opened its second U.S. stand-alone branch in New York's Flatiron district in March, a few blocks from fellow U.K. import Wagamama, which serves Asian-inspired food, including some Japanese dishes. Yo opened a similar restaurant in Boston in October and plans to open more locations in both cities if these perform well, adding to its current tally of 97 restaurants, including 75 in the U.K.

"It's been a great six months, guests are enjoying the new concept and we look forward to serving more guests," marketing manager Imogen Rossi said.

Most of the New York storefront is taken up by the 100-foot conveyor-belt, which stretches along its narrow length. Small booths are lined up on one side, with the kitchen on the other, so that diners can watch the chefs chop tuna and cucumbers while they eat. When plastic globes of food are placed on the conveyor, they receive stickers bearing timecodes indicating how long they can stay on the belt. Plates are color-coded to indicate their price: the cheapest plates (for example, avocado and cucumber rolls) cost $3.50, while the most expensive (such as hamachi sashimi with orange ponzu sauce) run to $8. Customers usually eat about five dishes and spend around $50.

The conveyor-belt format keeps the waiting time low, in contrast to other recent Asian imports like dim sum joint Tim Ho Wan, where wait times can stretch over two hours because people tend to linger. At Yo, you can eat a full meal and be out in 20 minutes. If you are in a bigger rush, you can grab a pre-made box of takeout, which accounts for 20% of sales.

Given New Yorkers' sophisticated knowledge of sushi, the restaurant probably could not win on its rolls alone, New York Magazine restaurant critic Adam Platt predicted. The novelty aspect would also be a difficult sell: "Gimmick restaurants don't tend to do well in New York. There are so many restaurants that you need a steady stream of regulars to survive, whether you're Le Bernardin (a top French restaurant) or a diner on the corner of Queens Boulevard (a 12-lane New York thoroughfare)."

However, Platt predicted that adding hot dishes could be a winning formula. About half the menu consists of made-to-order fare such as ramen, a broth with noodles and toppings, and grilled chicken.

"Ramen is a huge deal here with the new generation of diners. So is izakaya-style, casual Japanese cooking," he said. "Yo clearly know what they're doing. I might not go for sushi, but I'd go for the other stuff."

The restaurant's aim to court this "new generation" is evident from the colorful sushi packages and neon lighting. "Traditionally conveyor-belt restaurants are a bit more mature, while ours is a fun, younger environment," Rossi said. She also pointed to fusion dishes like tempura-battered "nori tacos" and sushi seared with a blowtorch.

Big bet

Yo's gamble on New York is costly. The cost of installing the equipment can be prohibitive: as much as $40,000 for the conveyor-belt, plus $800 to $1,000 per month for the tablet ordering system employed by some Yo locations and competitor Kula Sushi.

"The machinery takes up a lot of valuable space in the restaurant and the investment for it is high. You'll need to have a lot of sushi constantly rotating on the belt to see returns on your investment," Yagi said. On the other hand, the conveyor reduces demand on wait staff, providing some operating savings.

Health department regulations can be tricky for sushi restaurants, particularly for foreign chains unused to the rigorous inspections and letter grading system.

"The main challenge is the health codes, especially in New York City," said Taiki Wakayama, president of W&E Hospitality, which ran East and currently operates two conveyor-belt sushi restaurants in suburban New Jersey. "Sushi is especially hard because it's a mix of hot and cold -- the rice is hot while the fish is cold. The health codes say you can keep the food out for four hours, but you have to label everything."

Because complying with the codes is so difficult, restaurateurs might be dissuaded from pursuing this format. Wakayama contrasted the New York situation with Japan, where the health department was "a little more lenient" because "they understand the components of sushi."

Despite these challenges, conveyor-belt restaurants can be profitable. Kula Sushi has 11 eateries in the U.S. and average annual sales per store of $3 million, exceeding the company's initial goal of $1.8 million. Branching out from its initial base in California, Kula will open in Austin, Texas this month and also plans to expand to the East Coast.

Founded as Kura Sushi in Japan, where it has 385 locations, the chain adapted to the U.S. market by offering a greater variety of sushi. Besides basic combinations such as tuna and avocado its menu includes more unorthodox concepts such as "Spicy Salmon Crunchy Roll" and "Spicy Shrimp Taco." In contrast to the Japanese locations, there is also a greater emphasis on demonstrating freshness and quality with the goal of satisfying health- and ingredient-conscious Americans, according to a company representative.

Ultimately, these chains' survival in the U.S. will not be determined by the food alone. Customers do not necessarily seek out Yo or Kula for sophisticated fare; as Rossi put it, they are going for a fun experience.

When they finally ate lunch at Yo, conveyor-belt sushi aficionados Derek and Angela emerged with mixed feelings. "It's overpriced for the quality of sushi. New York has so many good sushi places," Derek said. "It's sushi for Americans," Angela said. "It's not true Japanese." She paused. "But it was fun."

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