Why Philadelphia is the sushi capital of America

Josh Onishi, chief executive of Peace Dining, at the Genji sushi case at the Whole Foods Market on Pennsylvania Avenue.

Surely you’ve been to a grocerant — a restaurant tucked inside a grocery store or supermarket.

Among the major players in that fast-growing, profitable category is Genji, the Japanese spots that employ 1,400 workers, including sushi chefs, working behind counters inside about 250 Whole Foods stores in 19 states.

Genji has always had Philadelphia roots, and the company has risen with the popularity of sushi and other raw-fish preparations in the United States. Hideo Omori opened Genji in a University City storefront basement in 1982, expanded in 1997 to Rittenhouse Square, opened a sushi/sake counter in the old Ritz-Carlton Hotel, and landed a deal to place sushi counters (branded as Genji Express) inside the stores of Fresh Fields, Whole Foods’ predecessor. After Omori’s death in 1999, his widow carried on the Genji name, though the restaurants closed. Peace Dining Corp., a holding company, acquired Genji in 2005, setting up its office in Two Penn Center.

Seven years ago, Peace brought in as chief executive Josh Onishi, a Japanese-born businessman with an MBA from Columbia University. He said the company, which is privately held, will do about $130 million in sales this year — much of it out of refrigerator cases.

How did sushi grow in the United States?

Supermarkets started recognizing the opportunities. At that time, in the mid-1980s, it was just starting slow, one by one, and mainly focusing on a low-price, inside-out roll because the seaweed is inside and not outside. Traditional sushi is outside, and I think Western people don’t like the black color in food. At least, that’s what I heard. They have to hide the seaweed inside. Then they don’t want to eat raw fish so much. Avocado has a very close taste to tuna, believe it or not — the texture is actually very similar. That’s why they invented the California roll. It has no raw fish and the seaweed is hidden inside.

Have you ever eaten one?

A California roll? It’s one of our best sellers.

But have you ever eaten one?

Yes, of course. I think I like it, too.

What is your favorite of all the varieties that you have?

I like the quinoa brown rice option. I have so many favorites, but I like a crunch roll.

And what about the trends?

We started seeing two different trends. There’s omakase, which is the chef’s choice menu. Those sometimes go to $300, $500 a person. Then there are the ones focusing on traditional rolls, and those crunches and dragon and whatever else they make up.

Those are two lines — one high-end, one I would say the more affordable. Supermarket sushi is now perceived as a second level of the affordable restaurant. In the last five years at Whole Foods and other high-premium supermarket chains, people actually feel more comfortable buying quality food at the grocery stores. They even alternate — instead of going out, they eat at the grocery stores. That’s set the tone of the supermarket — the “grocerant.” That means that they’re looking for restaurant-quality sushi.  Some customers say they’re willing to pay up to even $20 in the supermarket [for a package of sushi]. I think that with the ingredients we offer and the quality we offer, I’m proud. For example, our wasabi is actually brought from Japan. We use wasabi roots.

Wasabi roots?

Wasabi is made from roots, with horseradish mixed. I would say 95 to almost 99 percent of sushi restaurants, except the high end, are using the 100 percent horseradish [powder with water mixed in] from China. It’s not even wasabi. We actually customized our soy sauce by asking our supplier to spec for us. Regular soy sauce — those off the shelf  here — is actually very salty. Our soy sauce is actually particularly made for sushi.

So quality is rising. What’s the long-term trend?

For 10 years out, it’s going to be sustainability. Right now, if we ask any consumers, the importance of sustainability maybe runs in between 15 to 20 percent. That means that they are not ready to spend additional money for sustainability. If you have $10 sushi without caring about sustainability, and let’s say you want to charge $12 and care about sustainability. … It tastes the same, the freshness same, the safety the same. [We] don’t think the consumers are willing to spend more money because of sustainability yet.

Why would sustainability be so important to a consumer?

It will eventually come back to [hurt] us if you don’t focus on it. Not just fish. Everything. Sustainability is important in how you transport fish, as well. We have to make sure that we have seafood available in 20 years.  I think that trend is coming in slowly and will be impacting what we buy and how we buy.

You have stores in cities and suburbs. Please compare how people buy sushi.

If you go to more suburban areas, they’re going to be more conservative in terms of, like, less raw fish, or they like more cooked or more veggie options. Maybe I shouldn’t say “veggie options” because if you go to a metro area, there is another trend going on — more people eating veggies, like vegan and gluten-free options.

Are there any new products and trends?

I spoke before about quinoa brown rice. It’s about three, four years old, but I think we are still the only company doing that. Using the quinoa super-food into the rice with the sushi, you don’t see this in Japan. It’s still the white rice, maybe brown rice, but not brown quinoa rice. Also, we have cauliflower rice. It’s not a rice; it’s cauliflower. It’s the answer to consumers who eat a gluten-free diet. We also create fun sushi things. We’ve come up with the sushi burrito introduced in supermarket the first time at Hai Street [which Peace spun off as a separate company]. We have sushi doughnuts. We also have poke.

We also have, right now, almost 30 ramen operations inside supermarkets. If you consider this a trend, it will be one of the largest trends. We also have two Genji izakayas [bars], and we’re opening our first Fire Leaf [which sells stir-fries] in Ohio. We also have Kei Jei, which is Korean and Japanese, in Tennessee. Right now in the pipeline we also plan to do some Hawaiian. We already have a menu ready to go, and a presentation ready to go. We’re just waiting for the new stores to open up.