Abstract

This paper aims to determine the factors that led to the improvement of soy sauce brewery management during the Meiji and Taisho Eras. In particular, we focus on how the Takanashi family, now Kikkoman Corporation, procured raw materials from 1887 to 1917.The food manufacturing industry accounted for more than 20 percent of the production volume of all industries in pre-war Japan. Until the 1900s, the soy sauce brewing industry was the third largest producer from among all types of food manufacturing industries. Two factors shaped the brewing industry. First, over 50 percent of the production cost went toward the procurement of raw materials. Second, after the late 1890s, a crucial condition for the expansion of the soy sauce industry was securing stable supply of raw materials not only from domestic regions but also from foreign countries and Japanese colonies. Therefore, we analyze the decision-making process of brewery companies with regard to the raw materials they used.Takanashi produced high quality soy sauce and low quality one. However, the price of the high quality sauce increased considerably after the 1890s. Therefore, Takanashi began to increase the production of the high quality sauce. They also began to procure imported raw materials mainly for the low quality sauce to reduce its cost. For the high quality sauce, they chose good quality raw materials. These raw materials procurement strategies played an important role in improving the competitive position of Takanashi's soy sauce in the market. Nonetheless, because the ratio of the quantity of high quality to low quality sauce increased, Takanashi was no longer able to strike a balance between cost reduction of the low quality sauce and quality maintenance of high quality one. This indicates a limitation of these strategies, and it was one of the causes of the emergence of the Noda Shoyu Company, Kikkoman's predecessor, that was established through a merger of individual proprietorships in 1917.

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