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Drought hits Folsom sake, soy sauce plants?

Congressman tours farms, manufacturers potentially hit by water shortage
By: Don Chaddock, Managing Editor
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FOLSOM, CA - Gold brought people to the foothills of the Sierra Nevada during the mid-1800s, but today water is the precious commodity bringing businesses to the region.

The record-setting drought in the Golden State now imperils two established businesses in Folsom relying on the steady supply of crisp, cool water from Folsom Lake.

In 1989, Gekkeikan Sake opted to open a production plant outside of Japan.

Yoshiyuki Saito, president of the plant in Folsom, said they searched across the U.S., sending water samples back to Japan for testing. It was a tossup between Folsom and a spot in Oregon for water purity.

Folsom was selected as the company's first plant located outside Japan. Through these two manufacturing plants, they hold roughly 25 percent of the world’s sake market, according to Saito.

“We ship to Canada, throughout the U.S.,” Saito said.

The rice used to make the sake in Folsom is purchased from Sacramento Valley farmers, but due to the drought, the price of rice is already rising.

“We buy all the rice locally,” Saito said. “We produce 500,000 cases of sake every year (from the Folsom plant).”

The company employs 34 people, with five coming from Japan. The others are from the region.

“Water is most important for sake brewing,” Saito said. “That’s why we came here 25 years ago. We also selected Folsom for (close access to) rice.”

He said Folsom’s mandatory water cutting measures are a concern for production.

“In water emergency, I worry about conserving 20 percent of water,” he said.

The company, which is surrounded by a Japanese water garden and pond, visible from their public tasting room, is cutting water use by turning off their irrigation and the pond.

Saito said he’s also concerned because the sake business has been booming with the popularity of Japanese restaurants and sushi.

“More Japanese restaurants means more sake,” he said. “Sake is cool. Sushi is cool. ... We came to Folsom because we could get pure and rich water and high-quality rice at reasonable prices.”

Another Japanese-based business, Kikkoman Foods Inc., constructed a manufacturing plant in Folsom 15 years ago for the same reason – water.

The Folsom plant is one of only two in the U.S. for the company synonymous with soy sauce. The other plant is in Wisconsin and is much larger.

“One of the reasons we moved here was the quality of water,” said Kikkoman board member and general counsel secretary Milton Neshek. He’s been with the company for 43 years and was part of the Folsom selection team.

The Folsom plant, at Glenn and Folsom Boulevard, employs 30 people.

“We needed water, good air and a work force,” Neshek said.

Folsom also beat out a town in Oregon, but it was close, according to Neshek.

The company looked at places all along the west coast and tested the water in the central valley. The problem they found with ground water?

“The water wasn’t pure enough,” Neshek recalled, saying the water contained nitrates and other impurities from decades of farming. “We needed a place with enough fresh water and we found (Folsom).”

Marcus Yasutake, Folsom’s environmental and water resources director, said he understands Kikkoman and Gekkeikan must use surface water for production.

He said it’s currently an engineering issue as Folsom seeks to fulfill the plants’ water requirements while still serving the town’s citizens as they look at importing water from other suppliers, including ground water.

“We’re looking to develop groundwater wells in the east area (giving us) approximately 600 to 800 acre feet,” he said, indicating the city is also conducting “alternative water supply investigations.”

“There are a lot of competing interests, just for water in the state,” he told a recent gathering of the Rotary Club of Folsom Lake. “The city of Folsom, if not the oldest, has senior most rights in this region.”

Another business with interest in water is Aerojet, which uses 2,700-acre-feet of untreated water directly from the lake “for cooling purposes,” he said.

“Folsom has rights to 27,000 acre feet, as pre-1914 water rights,” Yasutake said. “We typically use 22,000 to 23,000 acre feet.”

He said Aerojet is “looking at converting two of their facilities to (water producing facilities),” to help conserve water.

Rep. Ami Bera, D-Elk Grove, represents California’s 7th Congressional District and has been touring local businesses and farms hit by the drought.

“We are doing everything we can to lessen releases from the lake,” he said, to help bolster the reservoir. “California’s historic drought is hurting many Sacramento County small businesses and farmers, which impacts not only individuals, but our entire local economy. … I’m doing everything I can to both help those being affected in the short term, and to find long-term solutions for securing water access and storage that add to our water supply rather than taking from it.”

According to Bera’s office, the drought is anticipated to cause price increases for the agricultural products essential to the production of soy sauce and sake, such as rice, soy, and wheat.

In addition to the tours last week, Bera held a Drought Resources Workshop with representatives from the USDA and Small Business Administration to inform local farmers and small business owners about the resources available to them from the federal government.

Those who were unable to attend the workshop, but need help, can call Bera’s office at (916) 635-0505 or visit his Drought Relief Resources page at bera.house.gov/droughtrelief for more information.