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Will organic sake intoxicate consumers? Procurements of rice as bottlenecks and comparative procurement strategies by four brewers in Japan

Will organic sake intoxicate consumers? Procurements of rice as bottlenecks and comparative... This study reviews the status of current organic sake and procurement strategies of organic rice by four brewers in Japan. Despite overall declining trends in shrinking domestic markets, sake categorized in the premium segment has been increasing in trading volumes and indicated resilience in prices. This study first reviewed and analyzed the overall status of sake, trends in premium segment, and challenges for organic sake. Unlike wine, organic sake occupies a minor position in the segment. This was followed by the comparative analysis of procurement strategies of organic rice for four sake breweries in Japan. The strategies were contrasting; three breweries indicated strong “local” bonding while one procured organic rice outside of the region, resulting in different product strategies. At its initiation, all four breweries showed the interests in local agriculture and gained rice locally. Then, availability and affordable price became a bottleneck. Implications of these challenges are further analyzed from exporting perspectives as well. Keywords: Organic agriculture, Export, Local development, Terroir, Rice, Sake, Japan Introduction started in the late ninetieth century. Amongst historical Sake has been part of Japanese culture from the ancient yeast, the “Number 6 yeast” is still used in brewing time as the national foundation mythologies of Kojiki which was originally separated from a brewery in Akita and Nihonshoki described them [1]. Brewing at low Prefecture in 1930 [2]. After the WWII, the development temperature developed at the time of the Song Dynasty of yeasts rapidly contributed to the evolution to the of China (960–1279). Japan accepted this technology current flavor of sake [1]. Nowadays, the breweries pol- around 1570. In addition, the technologies have been de- ish the rice surface and have the scent given off from veloping to overcome immature flavors. First is the de- premium sake. velopment of malt. Malt production became stable in The overall production of sake has been decreasing in the Muromachi period (1336–1573). The recipe of malt contemporary Japan mainly due to diversification of was shared among select groups. Malt became spread in preferences particularly for younger generations and de- the Meiji period (1868–1912). In the same period, scien- creasing population. In short, the domestic market, the tists started to be involved in the studies of malt. In re- production volume more than halved in the last 20 cent years, malt became specified to types of the years. Despite such decline, the demand on premium products. Second, the scientific separations of yeasts sake and the increase of the export were relatively strong to provide positive prospects on the industry. The production of sake in Japan has been decreasing * Correspondence: kohsaka@hotmail.com Graduate School of Environmental Studies, Nagoya University, Furo-Cho from the perspective of volumes. While it was 1133 Chikusa-Ku, Nagoya City, Aichi 464-8601, Japan © The Author(s). 2020 Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 2 of 11 Fig. 1 Shipment of Japanese sake (million liters). The trend of the overall production of sake has declined. The trend is attributed to the decline of the production of non-premium sake. The production of specifically designated sake, premium sake, increased from 2012 to 2017. The sale after the East-Japan earthquake and tsunami could contribute to this increase as the consumers notice the quality of premium sake [3]. Modified from [4] Table 1 The labeling standard of sake by production quality. Tax Agency decides the sake categories in Japan as below. Sake is at first categorized into specially designated sake and non-premium sake. Specially designated sake is then categorized into pure-rice sake type and honjōzō-shu kei. These categories are based on the ingredients such as edible ethanol. Furthermore, both pure-rice sake type and honjōzō-shu kei are classified by rice-polishing ratio. Rice polishing reduces the coarse flavors related to the acids [1] Translated from [3] Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 3 of 11 million liters in 1998, it is currently 495 million liters in rice keeps sake-brewing rice attractive to produce [7]. 2018 (Fig. 1). The decrease is attributed to the shift of When Japan accepted the Uruguay Round agreement in consumer preference and aging population [4]. In con- 1994, the farm-gate price of conventional edible rice was temporary era, sake has to compete with other alcohol 21,364 yen/60 kg [8]. In recent period from 2014 to drinks such as liquors, shochu (Japanese distilled liquors 2018, the prices were the lowest at 11,967 yen in 2014 of buckwheat, wheat, and sweet potatoes), and wine. and the highest at 15,695 yen in 2018 [9]. To stabilize Despite such overall decline of alcohol or sake produc- the market of sake-brewing rice, Ministry of Agriculture, tion, the production of specially designated sake (tokutei Forestry, and Fisheries (MAFF) recommended the meishō shu), premium sake, is rather strong (Table 1). farmers be sensitive to the market information [4]. Simi- This reflects the consumer preference for high-quality larly, could the introduction of another sake category of luxurious goods with terroir, or local and environmental organic sake help stabilize the production of sake and stories [3]. Additionally, the increase of the export un- sake-brewing rice? What does it mean for exporting derlies the demand on luxurious sake (Fig. 2). In 2018, makers? the export accounted for 4.9% of the total sake shipment In the existing studies, there was a range of analysis [1, in Japan [4]. The Japanese government deregulated Li- 10–12]. For example, Sato and Kohsaka (2017) reviewed quor Tax Law in 2020 in order to boost the exports [5]. and evaluated the historical development of sake in Production permits were previously under strict con- Japan in general [1]. Here, we focused on organic aspect. trolled in numbers but will be deregulated and granted Unlike wines, the production of organic sake has not additionally for products exclusively for exports. played a major role. We analyzed the current status of Such increase of demands on high-quality sake did not the industry and what was underpinning challenges for accompany the increase of sake-brewing rice in corre- organic sake, mainly from production perspectives, fo- sponding way (Fig. 3). The production of sake-brewing cusing on different procurement strategies by four rice halted its increase in 2015. As the price of sake- brewers. brewing rice is much higher than that of conventional By doing so, this study explored how possible it was edible rice, the production of sake-brewing rice in- for Japanese sake of organic rice to increase its produc- creased to cause the overproduction in the year with tion as well as organic rice production. For this purpose, good rice harvest [4]. Still, sake-brewing rice continues this study examined what sake breweries conducted to to be more expensive; for example, in 2018, compared initiate and developed its organic sake production and with 14,524 yen/60 kg for conventional edible rice at a sale. This study first described the current status of or- farm gate, the price of sake-brewing Yamadanishiki var- ganic sake production. Second, this study described and iety in Hyōgo Prefecture was 23,600 yen, and Gohyaku- analyzed the procurement of organic rice by the brewer- mangoku in Niigata Prefecture costed 16,100 yen [4]. ies. Third, the study described the sales and exports of Furthermore, the price decrease of conventional edible organic sake. By analyzing the procurement of organic Fig. 2 Export of sake from Japan. From 1998 to 2018, the export of sake steadily increased both by quantity and monetary value. The increase was 318% by quantity and 653% by monetary value. The main type of sake for export is premium sake. As organic sake is in this category, more of it is expected to export. Source: [4] Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 4 of 11 Fig. 3 Production of sake-brewing rice (100 tons). The production of sake-brewing rice increased until 2015, and then it decreases. The overproduction is followed by the decrease of the production [4]. Higher price of sake-brewing rice was attractive for the farmers. In 2018, the price of conventional edible rice and that of sake-brewing Yamadanishiki variety in Hyōgo Prefecture was 14,524 yen/60 kg and 23,600 yen/60 kg, respectively. To avoid the overproduction, MAFF recommends the farmers to be sensitive to the market information. Sources: [4, 6] rice, they initially procured rice locally, in order to Simultaneously, the increase of organic rice price could emphasize the bonding with terroir, local agriculture and pressure breweries to raise the prices of organic sake or environment. Availability and affordable price became a demand the arrangement with local organic farmers for bottleneck. Faced with a lack of local supply of organic the long-term relations with the discounted rice prices. rice when increasing the productions, Brewery D in cen- As such, it is implied that affordable price and secure tral Japan had to think of different product strategies. supplies are bottleneck to promote the production of Table 2 The basic data on the breweries to produce organic sake. They are small to medium-sized breweries and located in different regions. They are rather veteran breweries to produce organic sake with the experiences of about 10 to 20 years. Despite this, the ratios of organic sake to total is small for the four breweries. Though one brewery produces organic rice for itself, the others buy from a small number of farms. The breweries can sell organic sake as organic without a JAS certificate in Japan. They are requested legally to comply with the Organic Labelling Standards of Sake among Others of National Tax Agency [14] Brewery A Brewery B Brewery C Brewery D Brewery location Tōhoku Hokuriku Chūgoku Chūbu Year of company creation 1973 Sometime in 1818–1831 1867 1738 Year of incorporation 1973 1950 1952 1970s Capital fund 150 million yen 51 million yen 10 million yen 214 million yen No. of employees About 140 19 9 17 No. of non-regular or part-time employees About 40 About 10 4 3 Annual sake production 2343 kl 252 kl 180 kl 450 kl Annual brewing capacity 5400 kl 540 kl 360 kl 900 kl Average rice-polishing ratio 60 to 65% 67 to 68% 60% 68% Year to start organic sake production 2002 About 2011 2007 About 2000 Annual production of organic sake 42 kl 4.3 kl About 3.1 kl 36 kl The ratio of organic sake to annual production (%) 1.8% 1.7% 0.9% 8.0% Average polishing ratio of organic rice 60% 70% 70% 62 to 63% The amount of organic rice to purchase 32,160 kg 3600 kg 2800 kg No. of supplying organic rice producers 4 or 5 1 Self-supply 4 Organic certification in a brewery JONA, EU, COR JAS, EU, USDA Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 5 of 11 organic sake, similar to challenges facing most of the or- ganic agriculture and processed foods [13]. Data collection method This study derived from the questionnaire survey of four sake breweries conducted in January and February 2020 (Table 2). These breweries produced sake from JAS cer- tified organic rice. JAS certification is the only existing legal organic certification in Japan. The intensive Inter- net search resulted in the identification of roughly 31 breweries using organic rice. We captured varieties in the locations and pricings by focusing on four breweries. These differences led to the diverse branding and sales strategies. The questionnaire asked them about their corporation, entire sake-brewing, organic sake-brewing, organic-sake sales, and prospects, difficulties, and pol- icies (Appendix). The authors asked the questions by phone (interviewing a president of one brewery), by email (with a staff member of one brewery), and on site (one brewery to interview a chairperson and a chief brewer) (Figs. 4 and 5). The authors additionally visited one of the breweries in site and enquired the Fig. 5 Steamed and cooled rice was added to unrefined sake. In shikomi, rice and malt are added to yeast mash for further fermentation [15]. To sustain the activeness of the yeasts, rice and malt are not added once but three separate times. One third of the total amount is put each time. Rice is cooled by a machine before being put into a tank. All rice including spilled one is collected during the process. Note. Conventional rice was steamed on the day of the visit. Photo by authors supplementary questions after they asked the questions by phone. Results Brewery characteristics and organic sake production The four breweries in this study in focus varied in their sizes, from regional to local ones with production amount of 180 to 2343 kl or employees from nine to about 140 (Table 2). In general, they were small to medium sizes. For comparison, Hakutsuru, the largest sake brewing company in Japan, produced 61,100 kl in 2011 and currently hired 432 regular employees in 2019 [16, 17]. For the background knowledge, Brewery D experi- enced a corporate takeover three years ago and became Fig. 4 Steamed rice dug to be cooled and malted. In sake-brewing, part of a large and transnational food and restaurant rice is used in the three processes. For malt making, steamed rice is group based in Japan. mixed with koji mold [15]. For making yeast mash, rice and malt are mixed with lactic acid, water, and yeasts. Enzymes from malt turn The production of organic sake currently plays a rice into sugar. This increases yeasts. In shikomi, rice and malt are minor role in the breweries’ entire production. These added to yeast mash for further fermentation. Note. Conventional breweries started organic sake production 13 to about rice was steamed on the day of the visit. Photo by authors 20 years ago. The ratios of organic sake production in Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 6 of 11 overall production amount occupy 0.3 to 1.8% in the The two other breweries tried to produce differenti- four cases. Their productions ranged from about 0.5 to ated sake for sale [Brewery A staff, personal communica- 42 kl. They required 2800 to 32,160 kg of organic rice tion, January 24, 2020; Brewery C president, personal and contract with up to 5 producers. Brewery C is the communication, January 27, 2020]. Brewery A organized only one to produce organic rice for itself. The other a group of local farmers to study rice for sake produc- breweries contract with organic rice farmers. tion 7 years before starting the production of organic Breweries of organic certifications sake are requested pure-rice daiginjō-shu. Brewery C exported sake and legally to comply with the Organic Labelling Standards found, “Western countries evaluate organic per se.We of Sake among Others of National Tax Agency [14]. Un- produce rice ourselves for thirty years. We can differen- like agricultural products, they do not need to be certi- tiate sake more by brewing with organic rice” [Brewery fied under the Organic JAS Standards of MAFF (the C president] ingredients of rice need to comply with JAS as they are agricultural products with the legal framework of Production and certifications MAFFs). When exporting organic sake, they need to fol- The productions of sake with organic rice for all four low organic standards of importing countries and get producers were not faced with technical difficulties con- the necessary certifications. For such purpose, the brew- trary to the initial expectations. They used exactly the eries ask a qualified audit company to check their facil- same instruments with similar procedures. Yet, it was ities and practices for both domestic and foreign critical to separate ingredients and other processes to certifications. Breweries B and D went through this manage the chain-of-custody. The mainstream produc- process to obtain the foreign certifications such as EU, tions were brewed with conventional rice, and the brew- USDA, and COR (Canadian standards) in addition to eries were supposed to wash all the instruments domestic ones like JAS and JONA (Japan Organic & including barrels and filter cloth before brewing organic Natural Foods Association) [Brewery B president, per- rice [Brewery B president, personal communication, Feb- sonal communication, January 31, 2020; Brewery C ruary 6, 2020; Chief brewer in Brewery D, personal com- president, personal communication, January 27, 2020]. munication, February 10, 2020]. Furthermore, certified JONA is a nonprofit organization and an IFOAM (Inter- rice mills were available in the same or adjacent prefec- national Federation of Organic Agriculture Movements) tures [Brewery B president; Chief brewer in Brewery D]. member to certify organic agriculture and food though In order to be certified for export, Brewery C got certi- JONA certification cannot claim organic to sell inside fied under JAS, EU, and USDA [Brewery C president, Japan. personal communication, January 27, 2020]. As this brewery produced rice for itself, it had both its farm and Reasons to initiate organic sake production brewery certified. This burdened the production as all All four breweries, including the one producing rice for certifications costed roughly 10% or less of the sales itself, mentioned the connections with local farmers and from organic sake. Brewery D does not have a certifica- expressed their willingness to brew with local rice when tion [Chief brewer in Brewery D, personal communica- they first initiated the production with organic ingredi- tion, February 10, 2020]. To export its sake, documents ents. The two breweries recognized that local organic were added to prove that rice came from the prefectures rice farmers existed and expressed desire to stabilize with a negligible level of radiation. their rice production and sale [Brewery B president, per- sonal communication, January 31, 2020; Brewery D chairperson, personal communication, February 10, Organic rice procurement 2020]. They wanted to help these ambitious organic rice Majority of breweries contracted the amount and price farmers. As well, Brewery D thought it could contribute of the organic rice in advance with the farmers before to local community development through sake. The the seasons of rice productions (the so-called contract chairperson of Brewery D said, “If everyone plays a role, basis production). The only exception was Brewery C this is a good ‘sprout’ for the public campaign by the producing all necessary organic rice for productions. As city.” By pursuing organic sake in depth, Brewery B was for the rice varieties, Brewery C only handled Yamada- reminded of the basic components of sake brewing, nishiki, sake-brewing rice, as organic rice [Brewery C returning to the local origin and environment. He de- president, personal communication, January 27, 2020]. cided to return to the origin and brew sake in an old Breweries A and D bought both organic sake-brewing way: brewing sake from rice made by local farmers on and organic edible rice [Brewery A staff, personal com- the local land. Organic sake would embody the origin. munication, February 3, 2020; Brewery D chairperson, He thought that this could be a way to overcome the personal communication, February 10, 2020]. Brewery B sluggish situation in the industry. exclusively handled organic edible rice [Brewery B Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 7 of 11 president, personal communication, January 31, 2020]. supply of organic rice for brewing. Consequently, Brew- This initially reflected the situation of the farmer side ery B abandoned the idea of brewing sake with organic before. sake-brewing rice. For the organic edible rice, Brewery B paid about 50% higher than conventional edible rice Before, we exclusively bought Gohyakumangoku (Fig. 6). Brewery B explained that the price was lower [sake-brewing rice]. The production of organic than those of farmer’s organic edible rice and reputed Gohyakumangoku was unstable between bad and conventional Yamadanishiki, but was higher than other good years. We asked the farmer to produce and kinds of sake-brewing rice. Currently, a farmer offered sell organic edible rice. He can sell it somewhere discount price to the brewery because they had a long else [in a good year]. [Brewery B president] trading partnership. This still kept the contract price to observe organic premium as both edible and sake-brew- Brewery B only had one farmer to purchase organic ing rice. rice. Before, if the farmer produced less sake-brewing Regarding contract price, the chairperson of Brewery rice than Brewery B demanded in a bad harvesting year, D mentioned that their price was higher than cheap the brewery changed the production plan adaptively. To Yamadanishiki [personal communication, February 10, avoid such shortage, farmers produced more than the re- 2020]. To illustrate in Fig. 6, it could be between 14,524 quested amount, yet in this case, there are two risks for yen and 23,600 yen which is the price of Yamadanishiki good harvest years; either farmers had to sell rice to from Hyogo, supposedly the most expensive sake-brew- nonlocal breweries, or Brewery B would need to pur- ing rice. To ascertain the quality of rice, Brewery A chase excessive amount. To avoid risks on both ends, added the incentive [Brewery A staff, personal commu- the farmer and the brewery decided the procurement of nication, February 3, 2020]. The brewery checked the in- organic edible rice in advance. By doing so, the farmer dicators of rice quality such as a crack and the weight of secured production more than the brewery needed, and one thousand grains. With better quality, the brewery the rest were sold directly to the consumers. By having paid about 500 to 1500 yen per 60 kg. this channel of direct sales, the brewery could avoid the With such price range, did it expand rice production risk of the unstable productions and procure the stable for sake? Though Brewery C produced its own organic Fig. 6 Price estimate to buy organic edible rice by Brewery B in 2018 (yen/60 kg). To buy organic edible rice from a farmer, Brewery B pays a farmer for the price higher than conventional edible rice and some conventional sake-brewing rice. This difference is the premium the brewery pays for organic rice to brew sake. This is still lower than the price of Yamadanishiki in Hyōgo Prefecture, the most expensive conventional sake- brewing rice. This might be because brewing organic rice does not guarantee the better flavor than the Yamadanishiki. Farmers consider a long relation with the brewery and sell rice to the brewery cheaper than selling in the other channels. Sources: ([1], Farmer, personal communication, April 1, 2020). Note. This was based on the price of brown rice per 30 kg. The rice variety was the same as Brewery B bought Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 8 of 11 rice for about 15 years, it decreased the production of Brewery A limited its sale domestically and kept the organic rice owing to the increase of weeding [Brewery character of the product in the domestic niche market C president, personal communication, January 27, 2020]. [Brewery A staff, personal communication, January 24, Employees of Brewery C worked in the rice fields of 18 2020]. On the other hand, all the other breweries ha including 1.8 ha of the ones for organic Yamada- exported their organic sake to foreign countries and nishiki. They used a weeding machine and weeded by places such as EU, the USA, Vietnam, China, and Hong hand afterwards as annual work. Furthermore, Brewery Kong. They sold the sake to alcohol traders and Japanese A was cautious about the rapid expansion of organic rice food companies [Brewery C president, personal commu- for sake. Brewery A staff said, “Organic does not mean nication, January 27, 2020]. To find sale channels, they high quality rice. Farmers who know how to produce went to trade fairs [Brewery B president, personal com- high quality rice get to be organic” [personal communi- munication, January 31, 2020]. Brewery C first sold or- cation, February 3, 2020]. Therefore, it was not very easy ganic sake in EU through a trader who was known by to find rice farmers who would become organic and own transactions in the past. the skills to endure the risk of production decrease with In the process of exporting organic sake, Breweries B conversion and harvest high-quality organic rice for and C said they had difficulty in finding regular cus- sake-brewing. tomers or repeaters [Brewery B president, personal com- To increase the supply of organic rice, Breweries A munication, January 31, 2020; Brewery C president, and C added contract organic farmers. Brewery A personal communication, January 27, 2020]. Once they contracted with a farmer in the local farmer group and made a deal with a foreign wholesaler, the sale would then asked a local nonprofit certifying organization of generally increase. However, it normally slowed down in organic agriculture and found additional farmers inside case of organic sake. Both Brewery B and C attributed the prefecture [Brewery A staff, personal communica- the decline to high prices of organic sake. Brewery C tion, February 3, 2020]. This allowed 99% of their pro- raised the price to absorb the high cost for the produc- curement of conventional and organic rice to be local. tion including the certifications; otherwise, their sales Besides, Brewery D asked its corporate group to find would be limited to certain countries [Brewery B presi- farms [Brewery D chairperson, personal communication, dent]. Furthermore, Brewery B thought they had to com- February 10, 2020]. This enabled the brewery to contract pete with local alcoholic beverages including wines in with the farmers far away in western Japan. With the Europe. Similar to the situation in exports, high price introduction of nonlocal organic rice, Brewery D diversi- prevented repeated sales in Japan. Organic sake had to fied its products. It separated the products by local or compete with conventional sake. Japanese consumers nonlocal and diversified the sake from nonlocal rice by did not value organic compared to foreign consumers. rice variety. It further attached familiar animals such as Brewery B expressed the difficulties with organic sake. a cat, a dog, and a rabbit in the product names and la- Brewery B is undecided whether they would halt brew- bels of sake from each variety of nonlocal organic rice. ing organic sake and keep selling a stock in the brewing season of 2020 to 2021. Domestic sales and exports Discussion Organic sake was not sold well in a local area. Instead, it We illustrated the processes for Japanese breweries to could be sold in “various places” [Brewery C president, produce and sell sake made from certified organic rice personal communication, January 27, 2020]. It was sold in the introduction. The result serves as basis to increase in shops and Teikei groups specialized in organic food organic agriculture in Japan, including future export [Brewery D chairperson, personal communication, Feb- strategy (Fig. 7). To start the production of organic sake ruary 10, 2020]. Teikei is a group of organic farmers and about 10 to 20 years ago, all breweries in this study were consumers to facilitate the productions and sales of or- interested in rice farming in the region. Then, availability ganic agricultural products [18]. Supermarkets were able of local organic rice affected the product strategies. Cer- to sell organic sake while they explained the quality tain breweries found the sale increased and had to find through stories [Brewery B president, personal commu- additional rice farmers. The breweries such as Brewery nication, January 31, 2020]. For Brewery B, organic sake D could not find organic rice farmers in a local area, and was not sold well because its price was high. The taste they found the ones away from their own locations was too unique for the general population especially be- [Brewery D chairperson, personal communication, Feb- cause Brewery B did not use sake-brewing rice. One ex- ruary 10, 2020]. They could start the products to reflect ception to sell organic sake was a souvenir shop to the reality of farmers’ distant locations and invent new connect sake with the locality of agriculture and sake product identities. Conversely, they lost the strong local brewing. bond to insist on locality, terroir [1, 19]. Local Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 9 of 11 Fig. 7 Factors to increase local organic rice and sake production and export. To increase the export of organic sake, the brewers need to know the market condition and find the stable matches with foreign wholesalers and traders. The recognition by consumers needs to consist of the two types: one for sake and the other for organic. This also applies to the increase of the local demand for organic sake. Whether local organic rice is available or not can change the marketing and sales strategies of organic sake. The government policy would increase organic rice at a local level agriculture missed the sale opportunity of organic rice. high-quality sake in Japan and wine especially in the Even at an incremental pace, organic rice farmers would European market. To perform well in both markets, or- increase to supply rice for breweries. The support by ganic sake needed to prove its quality and premium. local and national governments and existent organic Furthermore, in the case of Brewery B, as a rice farmer farmers could help avoid this opportunity costs [20, 21]. got the reputation and premium, the price got more ex- The result section discussed the price of organic rice pensive than to sell the brewery [Brewery B president, for sake. This section answered the questions raised in personal communication, February 6, 2020]. If the price the introduction; whether another sake category of or- of organic rice increased, the breweries would have more ganic sake help stabilize the production of sake and difficulty in buying and brewing organic rice. Thus, this sake-brewing rice or not. We further examined what it study implied the possibility to stagnate the production means for exporting makers in the introduction. In of processed organic food owing to a further price in- short, organic sake played a marginal role in economic crease of organic ingredients. Some differentiation in sense, contributing less as profit. Yet, it served as cataly- price premium could exist by product [22]. Without sis to change the contract relationships and brought the the concurrent additions of premium, the processed brewers, rice producers to basic principles, contributing food or drinks might not be the strategy for the de- to reflexivity of the producers. Organic rice price af- velopment of local organic agriculture. In the case of fected breweries to decide the prices of organic sake or this study, a brewery and a farmer regarded the ex- demand the arrangement with local organic farmers for perience of long-term transactions and agreed to the the long-term relations. For Brewery B, it was 50% more price assuming the future transactions. Like this, the than the price of conventional edible rice [Brewery B breweries could devise the strategies to align the pro- president, personal communication, January 31, 2020]; duction of organic sake in line with the enhancement for Brewery D, it was about the same as those of low-to- of its competitiveness through terroir [1, 19, 23, 24]. middle quality sake-brewing rice [Brewery D chairper- This could make the local breweries of organic sake son, personal communication, February 10, 2020]. The gain some edge against national and transnational procurement price of organic rice could reflect the com- breweries. In return, this would be how organic rice petitiveness of organic sake in the current market. Or- farmers would have a chance to keep a stable market ganic sake had difficulty in competing with conventional channel at a local level. Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 10 of 11 Besides, the strategies would be suggested to promote Appendix (Continued) both inputs and processed products as organic so that Annual sale consumers could realize the premium of them (Miyake Y, Annual brewing capacity Uchiyama Y, Kohsaka R: Status and trends of urban organic Average rice-polishing ratio agricultural policy in Japan: the survey on ordinance Questions on organic sake-brewing designated cities, forthcoming). For this purpose, the under- standings of both domestic and foreign consumers would Year to start organic sake production be necessary; for example, organic sake needs some regular Annual production of organic sake place to sell. Owing to higher price, it could not keep re- Average polishing ration of organic rice peaters and lose the place to sell. Reversely as a marketing Reasons to start organic sake production trial, providing organic sake with some regular spots would Methods to start organic sake production give the chance of consumers to be familiar with the Questions on organic-rice purchase products [25]. Additionally, selling with other organic sake or other organic products, the shops and supermarkets The amount of organic rice to purchase could stimulate the interests of the consumers and How to decide the prices of organic rice familiarize them with organic foods including sake. # of supplying organic rice producers This study analyzed the current situation of organic sake Farm size of supplying organic rice producers production through the interviews of rare organic sake How to find organic rice producers breweries in Japan. This study focused on sake and rice How much care on local purchase of organic rice and showed the reality of competition involving both in- puts and processed products. This study provides the im- Other special measures to buy organic rice plication for expansion of organic sake-brewing and rice Questions on organic-sake sales for sake as well as implications for the development of or- Annual sale of organic sake ganic agriculture involving organic processed food. To How to find the purchasers of organic sake maintain the competitiveness and image of high-quality How much care on local consumption of organic sake organic processed food, the relation between ingredients How is organic sake exported? and processed products should firmly be taken into con- sideration for the productions and sales and local organic Questions on prospects, difficulties, and policies agriculture. This study showed availability and affordabil- Any prospect to increase organic sake production ity of ingredient organic products were a key. The mis- Any difficulty in organic sake production match could affect the product identities. Furthermore, Any policy measures to apply maintaining the sales would demand consumer under- standings of organic agriculture in general as well as spe- Authors’ contributions cific products. While studying future productions, sales, Yoshitaka Miyake and Ryo Kohsaka coauthored the manuscript. The authors and exports of sake, more ideas and studies are necessary read and approved the final manuscript. for the promotion of organic processed products to de- velop local organic agriculture in other places in Asia. As Funding The study for this article was funded by Policy Research Institute, MAFF of is the case with Japan, the connection of organic and local Japan as the Commissioned Project on the Policy Science of Agriculture, was traditional but new to explore. Forestry, and Fisheries from the year 2018 to 2020: Factors to Facilitate Production and Export of Organic Agricultural Products: Analysis of Status and Trends in EU and Implications for Japan. In addition, the study was Appendix funded by the JSPS KAKENHI Grant Numbers JP16KK0053 and JP17K02105 and DAIKO Foundation. Questions to ask organic-sake breweries in this study General questions on a corporation Availability of data and materials The data of this study are available upon request. Brewery location Year of company creation Competing interests Year of incorporation The authors declare no conflicts of interest. Capital fund Received: 7 April 2020 Accepted: 4 August 2020 # of employees # of non-regular or part-time employees References General questions on sake-brewing 1. Sato J, Kohsaka R. Japanese sake and evolution of technology: a comparative view with wine and its implications for regional branding and Annual sake production tourism. J Ethn Foods. 2017;4(2):88–93. Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 11 of 11 2. Aramasa. History. n.d. http://www.aramasa.jp/around/.Accessed 27 July 2020 24. Kohsaka R, Matsuoka H, Uchiyama Y. Capturing the relationships between [in Japanese]. local foods and residents: a case in the Noto region, Japan. J Ethn Foods. 3. Kohsaka R, Matagi S, Sato J, and Uchiyama Y. 6th sector industrialization 2016;3(2):86–92. through the perspective of Japanese-sake ingredients: the cases from 25. Uchiyama Y, Fujihira Y, Matsuoka H, Kohsaka R. Tradition and Japanese Hokuriku and Tōhoku. In: The Venture Business Institute at Otemon Gakuin vegetables: history, locality, geography, and discursive ambiguity. J Ethn University, editor: Agriculture of people and mechanism: 6th Foods. 2017;4(3):198–203. industrialization to pass a region from people to people. Ibaraki, Ōsaka. Otemon Gakuin University Shuppan; 2016. p. 95-126. [in Japanese]. Publisher’sNote 4. Ministry of Agriculture, Forestry, and Fisheries. The situation of Japanese Springer Nature remains neutral with regard to jurisdictional claims in sake. 2019. https://www.maff.go.jp/j/seisaku_tokatu/kikaku/attach/pdf/sake-3. published maps and institutional affiliations. pdf. Accessed 20 Jan 2020. [in Japanese]. 5. Sankei Shimbun. New entries will be permitted for brewing sake. specified for export. The Government will Amend Liquor Tax Law. 2019. https://www. sankei.com/economy/news/191120/ecn1911200019-n1.html. Accessed 31 Mar 2020. [in Japanese]. 6. Ministry of Agriculture, Forestry, and Fisheries. The summary of the results from the situation involving material rice for Japanese sake and the amount of the demand for rice preferable for sake brewing. n.d. https://www.maff. go.jp/j/seisan/keikaku/soukatu/attach/pdf/161104-2.pdf. Accessed 20 Jan 2020. [in Japanese]. 7. Miyake Y, Kohsaka R. From hoes to story-telling as “Weapons of the Weak”: farmers’ resistance to neoliberal 2007 Multi-Product Management Stabilization Plan in Japan. J Ethn Foods. 2020;7(1):1–9. 8. Support Organization to Secure the Stable Supply of Rice Grain. The change of annual weighted average prices of successful bids on all varieties (index price). n.d. https://www.komenet.jp/torihiki/02/01/01.pdf. Accessed 22 Jan 2020. [in Japanese]. 9. Ministry of Agriculture, Forestry, and Fisheries. The change of bilateral-bidding prices (2009-2018). n.d. https://www.maff.go.jp/j/council/seisaku/syokuryo/1 81128/attach/pdf/re_data_3-2.pdf. Accessed 22 Jan 2020. [in Japanese]. 10. Baumert N. Les métiers du saké : vers un retour aux sources? In: Gadea C, Olivesi S, editors. Les métiers de la vigne et du vin. Grenoble: Presses Universitaires de Grenoble; 2019. p. 69–88. 11. Iga M. Collaborative relation among Japanese sake breweries and producers of sake-brewing rice in the supply system of Japanese sake. Chirigaku Hyōron. 2008;81(4):150–78 [in Japanese]. 12. Kajima S, Tanaka Y, Uchiyama Y. Japanese sake and tea as place-based products: a comparison of regional certifications of globally important agricultural heritage systems, geopark, biosphere reserves, and geographical indication at product level certification. J Ethn Foods. 2017;4(2):80–7. 13. Miyake Y, Kohsaka R. History, ethnicity, and policy analysis of organic farming in Japan: when “nature” was detached from organic. J Ethn Foods. 2020;7(1):1–8. 14. National Tax Agency. Organic labelling standards of sake among others. 2000. [in Japanese]. 15. Masumi. The processes to brew Masumi. n.d. https://www.masumi.co.jp/ spirit#process. Accessed 27 Jul 2020 [in Japanese]. 16. Narita, T. Hakutsuru n.d. Sake expert. n.d. http://sakeexpert.com/jfc_sake_pro/ hakutsuru/. Accessed 23 Mar 2020. [in Japanese]. 17. Hakutsuru Sake Brewing Co. About Hakutsuru. 2019. http://www.hakutsuru. co.jp/english/company/about.html. Accessed 23 Mar 2020. 18. Hatano T, Fujimoto T. Connecting food and agriculture at a local level-the trial called organic agricultural movements. In: Akitsu M, Sato Y, Takenouchi H, editors. New ethics on food and agriculture. Kyoto: Shōwadō.p. 47–70. [in Japanese]. 19. Saito O. Deepening the collaboration among agriculture, commerce, and industry, and value chains. In: Kashiwa M, editor. Logics of regional renovations and actor formations: new trials in agriculture and rural communities. Tokyo: Waseda Daigaku Shuppankai; 2019. [in Japanese]. 20. Kohsaka R, Matsuoka H. Analysis of Japanese municipalities with Geopark, MAB, and GIAHS certification: quantitative approach to official records with text-mining methods. SAGE Open. 2015;5(4):2158244015617517. 21. Tashiro A, Uchiyama Y, Kohsaka R. Impact of Geographical Indication schemes on traditional knowledge in changing agricultural landscapes: an empirical analysis from Japan. J Rural Stud. 2019;68:46–53. 22. Michelsen J, Hamm U, Wynen E, Roth E. The European market for organic products: growth and development. Stuttgart Hohenheim: Universität Hohenheim; 1999. 23. Kohsaka R. The myth of washoku: a twisted discourse on the “uniqueness” of national food heritages. J Eth Foods. 2017;4(2):66–71. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Journal of Ethnic Foods" Springer Journals

Will organic sake intoxicate consumers? Procurements of rice as bottlenecks and comparative procurement strategies by four brewers in Japan

"Journal of Ethnic Foods" , Volume 7 (1) – Sep 3, 2020

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Abstract

This study reviews the status of current organic sake and procurement strategies of organic rice by four brewers in Japan. Despite overall declining trends in shrinking domestic markets, sake categorized in the premium segment has been increasing in trading volumes and indicated resilience in prices. This study first reviewed and analyzed the overall status of sake, trends in premium segment, and challenges for organic sake. Unlike wine, organic sake occupies a minor position in the segment. This was followed by the comparative analysis of procurement strategies of organic rice for four sake breweries in Japan. The strategies were contrasting; three breweries indicated strong “local” bonding while one procured organic rice outside of the region, resulting in different product strategies. At its initiation, all four breweries showed the interests in local agriculture and gained rice locally. Then, availability and affordable price became a bottleneck. Implications of these challenges are further analyzed from exporting perspectives as well. Keywords: Organic agriculture, Export, Local development, Terroir, Rice, Sake, Japan Introduction started in the late ninetieth century. Amongst historical Sake has been part of Japanese culture from the ancient yeast, the “Number 6 yeast” is still used in brewing time as the national foundation mythologies of Kojiki which was originally separated from a brewery in Akita and Nihonshoki described them [1]. Brewing at low Prefecture in 1930 [2]. After the WWII, the development temperature developed at the time of the Song Dynasty of yeasts rapidly contributed to the evolution to the of China (960–1279). Japan accepted this technology current flavor of sake [1]. Nowadays, the breweries pol- around 1570. In addition, the technologies have been de- ish the rice surface and have the scent given off from veloping to overcome immature flavors. First is the de- premium sake. velopment of malt. Malt production became stable in The overall production of sake has been decreasing in the Muromachi period (1336–1573). The recipe of malt contemporary Japan mainly due to diversification of was shared among select groups. Malt became spread in preferences particularly for younger generations and de- the Meiji period (1868–1912). In the same period, scien- creasing population. In short, the domestic market, the tists started to be involved in the studies of malt. In re- production volume more than halved in the last 20 cent years, malt became specified to types of the years. Despite such decline, the demand on premium products. Second, the scientific separations of yeasts sake and the increase of the export were relatively strong to provide positive prospects on the industry. The production of sake in Japan has been decreasing * Correspondence: kohsaka@hotmail.com Graduate School of Environmental Studies, Nagoya University, Furo-Cho from the perspective of volumes. While it was 1133 Chikusa-Ku, Nagoya City, Aichi 464-8601, Japan © The Author(s). 2020 Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/. Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 2 of 11 Fig. 1 Shipment of Japanese sake (million liters). The trend of the overall production of sake has declined. The trend is attributed to the decline of the production of non-premium sake. The production of specifically designated sake, premium sake, increased from 2012 to 2017. The sale after the East-Japan earthquake and tsunami could contribute to this increase as the consumers notice the quality of premium sake [3]. Modified from [4] Table 1 The labeling standard of sake by production quality. Tax Agency decides the sake categories in Japan as below. Sake is at first categorized into specially designated sake and non-premium sake. Specially designated sake is then categorized into pure-rice sake type and honjōzō-shu kei. These categories are based on the ingredients such as edible ethanol. Furthermore, both pure-rice sake type and honjōzō-shu kei are classified by rice-polishing ratio. Rice polishing reduces the coarse flavors related to the acids [1] Translated from [3] Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 3 of 11 million liters in 1998, it is currently 495 million liters in rice keeps sake-brewing rice attractive to produce [7]. 2018 (Fig. 1). The decrease is attributed to the shift of When Japan accepted the Uruguay Round agreement in consumer preference and aging population [4]. In con- 1994, the farm-gate price of conventional edible rice was temporary era, sake has to compete with other alcohol 21,364 yen/60 kg [8]. In recent period from 2014 to drinks such as liquors, shochu (Japanese distilled liquors 2018, the prices were the lowest at 11,967 yen in 2014 of buckwheat, wheat, and sweet potatoes), and wine. and the highest at 15,695 yen in 2018 [9]. To stabilize Despite such overall decline of alcohol or sake produc- the market of sake-brewing rice, Ministry of Agriculture, tion, the production of specially designated sake (tokutei Forestry, and Fisheries (MAFF) recommended the meishō shu), premium sake, is rather strong (Table 1). farmers be sensitive to the market information [4]. Simi- This reflects the consumer preference for high-quality larly, could the introduction of another sake category of luxurious goods with terroir, or local and environmental organic sake help stabilize the production of sake and stories [3]. Additionally, the increase of the export un- sake-brewing rice? What does it mean for exporting derlies the demand on luxurious sake (Fig. 2). In 2018, makers? the export accounted for 4.9% of the total sake shipment In the existing studies, there was a range of analysis [1, in Japan [4]. The Japanese government deregulated Li- 10–12]. For example, Sato and Kohsaka (2017) reviewed quor Tax Law in 2020 in order to boost the exports [5]. and evaluated the historical development of sake in Production permits were previously under strict con- Japan in general [1]. Here, we focused on organic aspect. trolled in numbers but will be deregulated and granted Unlike wines, the production of organic sake has not additionally for products exclusively for exports. played a major role. We analyzed the current status of Such increase of demands on high-quality sake did not the industry and what was underpinning challenges for accompany the increase of sake-brewing rice in corre- organic sake, mainly from production perspectives, fo- sponding way (Fig. 3). The production of sake-brewing cusing on different procurement strategies by four rice halted its increase in 2015. As the price of sake- brewers. brewing rice is much higher than that of conventional By doing so, this study explored how possible it was edible rice, the production of sake-brewing rice in- for Japanese sake of organic rice to increase its produc- creased to cause the overproduction in the year with tion as well as organic rice production. For this purpose, good rice harvest [4]. Still, sake-brewing rice continues this study examined what sake breweries conducted to to be more expensive; for example, in 2018, compared initiate and developed its organic sake production and with 14,524 yen/60 kg for conventional edible rice at a sale. This study first described the current status of or- farm gate, the price of sake-brewing Yamadanishiki var- ganic sake production. Second, this study described and iety in Hyōgo Prefecture was 23,600 yen, and Gohyaku- analyzed the procurement of organic rice by the brewer- mangoku in Niigata Prefecture costed 16,100 yen [4]. ies. Third, the study described the sales and exports of Furthermore, the price decrease of conventional edible organic sake. By analyzing the procurement of organic Fig. 2 Export of sake from Japan. From 1998 to 2018, the export of sake steadily increased both by quantity and monetary value. The increase was 318% by quantity and 653% by monetary value. The main type of sake for export is premium sake. As organic sake is in this category, more of it is expected to export. Source: [4] Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 4 of 11 Fig. 3 Production of sake-brewing rice (100 tons). The production of sake-brewing rice increased until 2015, and then it decreases. The overproduction is followed by the decrease of the production [4]. Higher price of sake-brewing rice was attractive for the farmers. In 2018, the price of conventional edible rice and that of sake-brewing Yamadanishiki variety in Hyōgo Prefecture was 14,524 yen/60 kg and 23,600 yen/60 kg, respectively. To avoid the overproduction, MAFF recommends the farmers to be sensitive to the market information. Sources: [4, 6] rice, they initially procured rice locally, in order to Simultaneously, the increase of organic rice price could emphasize the bonding with terroir, local agriculture and pressure breweries to raise the prices of organic sake or environment. Availability and affordable price became a demand the arrangement with local organic farmers for bottleneck. Faced with a lack of local supply of organic the long-term relations with the discounted rice prices. rice when increasing the productions, Brewery D in cen- As such, it is implied that affordable price and secure tral Japan had to think of different product strategies. supplies are bottleneck to promote the production of Table 2 The basic data on the breweries to produce organic sake. They are small to medium-sized breweries and located in different regions. They are rather veteran breweries to produce organic sake with the experiences of about 10 to 20 years. Despite this, the ratios of organic sake to total is small for the four breweries. Though one brewery produces organic rice for itself, the others buy from a small number of farms. The breweries can sell organic sake as organic without a JAS certificate in Japan. They are requested legally to comply with the Organic Labelling Standards of Sake among Others of National Tax Agency [14] Brewery A Brewery B Brewery C Brewery D Brewery location Tōhoku Hokuriku Chūgoku Chūbu Year of company creation 1973 Sometime in 1818–1831 1867 1738 Year of incorporation 1973 1950 1952 1970s Capital fund 150 million yen 51 million yen 10 million yen 214 million yen No. of employees About 140 19 9 17 No. of non-regular or part-time employees About 40 About 10 4 3 Annual sake production 2343 kl 252 kl 180 kl 450 kl Annual brewing capacity 5400 kl 540 kl 360 kl 900 kl Average rice-polishing ratio 60 to 65% 67 to 68% 60% 68% Year to start organic sake production 2002 About 2011 2007 About 2000 Annual production of organic sake 42 kl 4.3 kl About 3.1 kl 36 kl The ratio of organic sake to annual production (%) 1.8% 1.7% 0.9% 8.0% Average polishing ratio of organic rice 60% 70% 70% 62 to 63% The amount of organic rice to purchase 32,160 kg 3600 kg 2800 kg No. of supplying organic rice producers 4 or 5 1 Self-supply 4 Organic certification in a brewery JONA, EU, COR JAS, EU, USDA Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 5 of 11 organic sake, similar to challenges facing most of the or- ganic agriculture and processed foods [13]. Data collection method This study derived from the questionnaire survey of four sake breweries conducted in January and February 2020 (Table 2). These breweries produced sake from JAS cer- tified organic rice. JAS certification is the only existing legal organic certification in Japan. The intensive Inter- net search resulted in the identification of roughly 31 breweries using organic rice. We captured varieties in the locations and pricings by focusing on four breweries. These differences led to the diverse branding and sales strategies. The questionnaire asked them about their corporation, entire sake-brewing, organic sake-brewing, organic-sake sales, and prospects, difficulties, and pol- icies (Appendix). The authors asked the questions by phone (interviewing a president of one brewery), by email (with a staff member of one brewery), and on site (one brewery to interview a chairperson and a chief brewer) (Figs. 4 and 5). The authors additionally visited one of the breweries in site and enquired the Fig. 5 Steamed and cooled rice was added to unrefined sake. In shikomi, rice and malt are added to yeast mash for further fermentation [15]. To sustain the activeness of the yeasts, rice and malt are not added once but three separate times. One third of the total amount is put each time. Rice is cooled by a machine before being put into a tank. All rice including spilled one is collected during the process. Note. Conventional rice was steamed on the day of the visit. Photo by authors supplementary questions after they asked the questions by phone. Results Brewery characteristics and organic sake production The four breweries in this study in focus varied in their sizes, from regional to local ones with production amount of 180 to 2343 kl or employees from nine to about 140 (Table 2). In general, they were small to medium sizes. For comparison, Hakutsuru, the largest sake brewing company in Japan, produced 61,100 kl in 2011 and currently hired 432 regular employees in 2019 [16, 17]. For the background knowledge, Brewery D experi- enced a corporate takeover three years ago and became Fig. 4 Steamed rice dug to be cooled and malted. In sake-brewing, part of a large and transnational food and restaurant rice is used in the three processes. For malt making, steamed rice is group based in Japan. mixed with koji mold [15]. For making yeast mash, rice and malt are mixed with lactic acid, water, and yeasts. Enzymes from malt turn The production of organic sake currently plays a rice into sugar. This increases yeasts. In shikomi, rice and malt are minor role in the breweries’ entire production. These added to yeast mash for further fermentation. Note. Conventional breweries started organic sake production 13 to about rice was steamed on the day of the visit. Photo by authors 20 years ago. The ratios of organic sake production in Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 6 of 11 overall production amount occupy 0.3 to 1.8% in the The two other breweries tried to produce differenti- four cases. Their productions ranged from about 0.5 to ated sake for sale [Brewery A staff, personal communica- 42 kl. They required 2800 to 32,160 kg of organic rice tion, January 24, 2020; Brewery C president, personal and contract with up to 5 producers. Brewery C is the communication, January 27, 2020]. Brewery A organized only one to produce organic rice for itself. The other a group of local farmers to study rice for sake produc- breweries contract with organic rice farmers. tion 7 years before starting the production of organic Breweries of organic certifications sake are requested pure-rice daiginjō-shu. Brewery C exported sake and legally to comply with the Organic Labelling Standards found, “Western countries evaluate organic per se.We of Sake among Others of National Tax Agency [14]. Un- produce rice ourselves for thirty years. We can differen- like agricultural products, they do not need to be certi- tiate sake more by brewing with organic rice” [Brewery fied under the Organic JAS Standards of MAFF (the C president] ingredients of rice need to comply with JAS as they are agricultural products with the legal framework of Production and certifications MAFFs). When exporting organic sake, they need to fol- The productions of sake with organic rice for all four low organic standards of importing countries and get producers were not faced with technical difficulties con- the necessary certifications. For such purpose, the brew- trary to the initial expectations. They used exactly the eries ask a qualified audit company to check their facil- same instruments with similar procedures. Yet, it was ities and practices for both domestic and foreign critical to separate ingredients and other processes to certifications. Breweries B and D went through this manage the chain-of-custody. The mainstream produc- process to obtain the foreign certifications such as EU, tions were brewed with conventional rice, and the brew- USDA, and COR (Canadian standards) in addition to eries were supposed to wash all the instruments domestic ones like JAS and JONA (Japan Organic & including barrels and filter cloth before brewing organic Natural Foods Association) [Brewery B president, per- rice [Brewery B president, personal communication, Feb- sonal communication, January 31, 2020; Brewery C ruary 6, 2020; Chief brewer in Brewery D, personal com- president, personal communication, January 27, 2020]. munication, February 10, 2020]. Furthermore, certified JONA is a nonprofit organization and an IFOAM (Inter- rice mills were available in the same or adjacent prefec- national Federation of Organic Agriculture Movements) tures [Brewery B president; Chief brewer in Brewery D]. member to certify organic agriculture and food though In order to be certified for export, Brewery C got certi- JONA certification cannot claim organic to sell inside fied under JAS, EU, and USDA [Brewery C president, Japan. personal communication, January 27, 2020]. As this brewery produced rice for itself, it had both its farm and Reasons to initiate organic sake production brewery certified. This burdened the production as all All four breweries, including the one producing rice for certifications costed roughly 10% or less of the sales itself, mentioned the connections with local farmers and from organic sake. Brewery D does not have a certifica- expressed their willingness to brew with local rice when tion [Chief brewer in Brewery D, personal communica- they first initiated the production with organic ingredi- tion, February 10, 2020]. To export its sake, documents ents. The two breweries recognized that local organic were added to prove that rice came from the prefectures rice farmers existed and expressed desire to stabilize with a negligible level of radiation. their rice production and sale [Brewery B president, per- sonal communication, January 31, 2020; Brewery D chairperson, personal communication, February 10, Organic rice procurement 2020]. They wanted to help these ambitious organic rice Majority of breweries contracted the amount and price farmers. As well, Brewery D thought it could contribute of the organic rice in advance with the farmers before to local community development through sake. The the seasons of rice productions (the so-called contract chairperson of Brewery D said, “If everyone plays a role, basis production). The only exception was Brewery C this is a good ‘sprout’ for the public campaign by the producing all necessary organic rice for productions. As city.” By pursuing organic sake in depth, Brewery B was for the rice varieties, Brewery C only handled Yamada- reminded of the basic components of sake brewing, nishiki, sake-brewing rice, as organic rice [Brewery C returning to the local origin and environment. He de- president, personal communication, January 27, 2020]. cided to return to the origin and brew sake in an old Breweries A and D bought both organic sake-brewing way: brewing sake from rice made by local farmers on and organic edible rice [Brewery A staff, personal com- the local land. Organic sake would embody the origin. munication, February 3, 2020; Brewery D chairperson, He thought that this could be a way to overcome the personal communication, February 10, 2020]. Brewery B sluggish situation in the industry. exclusively handled organic edible rice [Brewery B Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 7 of 11 president, personal communication, January 31, 2020]. supply of organic rice for brewing. Consequently, Brew- This initially reflected the situation of the farmer side ery B abandoned the idea of brewing sake with organic before. sake-brewing rice. For the organic edible rice, Brewery B paid about 50% higher than conventional edible rice Before, we exclusively bought Gohyakumangoku (Fig. 6). Brewery B explained that the price was lower [sake-brewing rice]. The production of organic than those of farmer’s organic edible rice and reputed Gohyakumangoku was unstable between bad and conventional Yamadanishiki, but was higher than other good years. We asked the farmer to produce and kinds of sake-brewing rice. Currently, a farmer offered sell organic edible rice. He can sell it somewhere discount price to the brewery because they had a long else [in a good year]. [Brewery B president] trading partnership. This still kept the contract price to observe organic premium as both edible and sake-brew- Brewery B only had one farmer to purchase organic ing rice. rice. Before, if the farmer produced less sake-brewing Regarding contract price, the chairperson of Brewery rice than Brewery B demanded in a bad harvesting year, D mentioned that their price was higher than cheap the brewery changed the production plan adaptively. To Yamadanishiki [personal communication, February 10, avoid such shortage, farmers produced more than the re- 2020]. To illustrate in Fig. 6, it could be between 14,524 quested amount, yet in this case, there are two risks for yen and 23,600 yen which is the price of Yamadanishiki good harvest years; either farmers had to sell rice to from Hyogo, supposedly the most expensive sake-brew- nonlocal breweries, or Brewery B would need to pur- ing rice. To ascertain the quality of rice, Brewery A chase excessive amount. To avoid risks on both ends, added the incentive [Brewery A staff, personal commu- the farmer and the brewery decided the procurement of nication, February 3, 2020]. The brewery checked the in- organic edible rice in advance. By doing so, the farmer dicators of rice quality such as a crack and the weight of secured production more than the brewery needed, and one thousand grains. With better quality, the brewery the rest were sold directly to the consumers. By having paid about 500 to 1500 yen per 60 kg. this channel of direct sales, the brewery could avoid the With such price range, did it expand rice production risk of the unstable productions and procure the stable for sake? Though Brewery C produced its own organic Fig. 6 Price estimate to buy organic edible rice by Brewery B in 2018 (yen/60 kg). To buy organic edible rice from a farmer, Brewery B pays a farmer for the price higher than conventional edible rice and some conventional sake-brewing rice. This difference is the premium the brewery pays for organic rice to brew sake. This is still lower than the price of Yamadanishiki in Hyōgo Prefecture, the most expensive conventional sake- brewing rice. This might be because brewing organic rice does not guarantee the better flavor than the Yamadanishiki. Farmers consider a long relation with the brewery and sell rice to the brewery cheaper than selling in the other channels. Sources: ([1], Farmer, personal communication, April 1, 2020). Note. This was based on the price of brown rice per 30 kg. The rice variety was the same as Brewery B bought Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 8 of 11 rice for about 15 years, it decreased the production of Brewery A limited its sale domestically and kept the organic rice owing to the increase of weeding [Brewery character of the product in the domestic niche market C president, personal communication, January 27, 2020]. [Brewery A staff, personal communication, January 24, Employees of Brewery C worked in the rice fields of 18 2020]. On the other hand, all the other breweries ha including 1.8 ha of the ones for organic Yamada- exported their organic sake to foreign countries and nishiki. They used a weeding machine and weeded by places such as EU, the USA, Vietnam, China, and Hong hand afterwards as annual work. Furthermore, Brewery Kong. They sold the sake to alcohol traders and Japanese A was cautious about the rapid expansion of organic rice food companies [Brewery C president, personal commu- for sake. Brewery A staff said, “Organic does not mean nication, January 27, 2020]. To find sale channels, they high quality rice. Farmers who know how to produce went to trade fairs [Brewery B president, personal com- high quality rice get to be organic” [personal communi- munication, January 31, 2020]. Brewery C first sold or- cation, February 3, 2020]. Therefore, it was not very easy ganic sake in EU through a trader who was known by to find rice farmers who would become organic and own transactions in the past. the skills to endure the risk of production decrease with In the process of exporting organic sake, Breweries B conversion and harvest high-quality organic rice for and C said they had difficulty in finding regular cus- sake-brewing. tomers or repeaters [Brewery B president, personal com- To increase the supply of organic rice, Breweries A munication, January 31, 2020; Brewery C president, and C added contract organic farmers. Brewery A personal communication, January 27, 2020]. Once they contracted with a farmer in the local farmer group and made a deal with a foreign wholesaler, the sale would then asked a local nonprofit certifying organization of generally increase. However, it normally slowed down in organic agriculture and found additional farmers inside case of organic sake. Both Brewery B and C attributed the prefecture [Brewery A staff, personal communica- the decline to high prices of organic sake. Brewery C tion, February 3, 2020]. This allowed 99% of their pro- raised the price to absorb the high cost for the produc- curement of conventional and organic rice to be local. tion including the certifications; otherwise, their sales Besides, Brewery D asked its corporate group to find would be limited to certain countries [Brewery B presi- farms [Brewery D chairperson, personal communication, dent]. Furthermore, Brewery B thought they had to com- February 10, 2020]. This enabled the brewery to contract pete with local alcoholic beverages including wines in with the farmers far away in western Japan. With the Europe. Similar to the situation in exports, high price introduction of nonlocal organic rice, Brewery D diversi- prevented repeated sales in Japan. Organic sake had to fied its products. It separated the products by local or compete with conventional sake. Japanese consumers nonlocal and diversified the sake from nonlocal rice by did not value organic compared to foreign consumers. rice variety. It further attached familiar animals such as Brewery B expressed the difficulties with organic sake. a cat, a dog, and a rabbit in the product names and la- Brewery B is undecided whether they would halt brew- bels of sake from each variety of nonlocal organic rice. ing organic sake and keep selling a stock in the brewing season of 2020 to 2021. Domestic sales and exports Discussion Organic sake was not sold well in a local area. Instead, it We illustrated the processes for Japanese breweries to could be sold in “various places” [Brewery C president, produce and sell sake made from certified organic rice personal communication, January 27, 2020]. It was sold in the introduction. The result serves as basis to increase in shops and Teikei groups specialized in organic food organic agriculture in Japan, including future export [Brewery D chairperson, personal communication, Feb- strategy (Fig. 7). To start the production of organic sake ruary 10, 2020]. Teikei is a group of organic farmers and about 10 to 20 years ago, all breweries in this study were consumers to facilitate the productions and sales of or- interested in rice farming in the region. Then, availability ganic agricultural products [18]. Supermarkets were able of local organic rice affected the product strategies. Cer- to sell organic sake while they explained the quality tain breweries found the sale increased and had to find through stories [Brewery B president, personal commu- additional rice farmers. The breweries such as Brewery nication, January 31, 2020]. For Brewery B, organic sake D could not find organic rice farmers in a local area, and was not sold well because its price was high. The taste they found the ones away from their own locations was too unique for the general population especially be- [Brewery D chairperson, personal communication, Feb- cause Brewery B did not use sake-brewing rice. One ex- ruary 10, 2020]. They could start the products to reflect ception to sell organic sake was a souvenir shop to the reality of farmers’ distant locations and invent new connect sake with the locality of agriculture and sake product identities. Conversely, they lost the strong local brewing. bond to insist on locality, terroir [1, 19]. Local Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 9 of 11 Fig. 7 Factors to increase local organic rice and sake production and export. To increase the export of organic sake, the brewers need to know the market condition and find the stable matches with foreign wholesalers and traders. The recognition by consumers needs to consist of the two types: one for sake and the other for organic. This also applies to the increase of the local demand for organic sake. Whether local organic rice is available or not can change the marketing and sales strategies of organic sake. The government policy would increase organic rice at a local level agriculture missed the sale opportunity of organic rice. high-quality sake in Japan and wine especially in the Even at an incremental pace, organic rice farmers would European market. To perform well in both markets, or- increase to supply rice for breweries. The support by ganic sake needed to prove its quality and premium. local and national governments and existent organic Furthermore, in the case of Brewery B, as a rice farmer farmers could help avoid this opportunity costs [20, 21]. got the reputation and premium, the price got more ex- The result section discussed the price of organic rice pensive than to sell the brewery [Brewery B president, for sake. This section answered the questions raised in personal communication, February 6, 2020]. If the price the introduction; whether another sake category of or- of organic rice increased, the breweries would have more ganic sake help stabilize the production of sake and difficulty in buying and brewing organic rice. Thus, this sake-brewing rice or not. We further examined what it study implied the possibility to stagnate the production means for exporting makers in the introduction. In of processed organic food owing to a further price in- short, organic sake played a marginal role in economic crease of organic ingredients. Some differentiation in sense, contributing less as profit. Yet, it served as cataly- price premium could exist by product [22]. Without sis to change the contract relationships and brought the the concurrent additions of premium, the processed brewers, rice producers to basic principles, contributing food or drinks might not be the strategy for the de- to reflexivity of the producers. Organic rice price af- velopment of local organic agriculture. In the case of fected breweries to decide the prices of organic sake or this study, a brewery and a farmer regarded the ex- demand the arrangement with local organic farmers for perience of long-term transactions and agreed to the the long-term relations. For Brewery B, it was 50% more price assuming the future transactions. Like this, the than the price of conventional edible rice [Brewery B breweries could devise the strategies to align the pro- president, personal communication, January 31, 2020]; duction of organic sake in line with the enhancement for Brewery D, it was about the same as those of low-to- of its competitiveness through terroir [1, 19, 23, 24]. middle quality sake-brewing rice [Brewery D chairper- This could make the local breweries of organic sake son, personal communication, February 10, 2020]. The gain some edge against national and transnational procurement price of organic rice could reflect the com- breweries. In return, this would be how organic rice petitiveness of organic sake in the current market. Or- farmers would have a chance to keep a stable market ganic sake had difficulty in competing with conventional channel at a local level. Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 10 of 11 Besides, the strategies would be suggested to promote Appendix (Continued) both inputs and processed products as organic so that Annual sale consumers could realize the premium of them (Miyake Y, Annual brewing capacity Uchiyama Y, Kohsaka R: Status and trends of urban organic Average rice-polishing ratio agricultural policy in Japan: the survey on ordinance Questions on organic sake-brewing designated cities, forthcoming). For this purpose, the under- standings of both domestic and foreign consumers would Year to start organic sake production be necessary; for example, organic sake needs some regular Annual production of organic sake place to sell. Owing to higher price, it could not keep re- Average polishing ration of organic rice peaters and lose the place to sell. Reversely as a marketing Reasons to start organic sake production trial, providing organic sake with some regular spots would Methods to start organic sake production give the chance of consumers to be familiar with the Questions on organic-rice purchase products [25]. Additionally, selling with other organic sake or other organic products, the shops and supermarkets The amount of organic rice to purchase could stimulate the interests of the consumers and How to decide the prices of organic rice familiarize them with organic foods including sake. # of supplying organic rice producers This study analyzed the current situation of organic sake Farm size of supplying organic rice producers production through the interviews of rare organic sake How to find organic rice producers breweries in Japan. This study focused on sake and rice How much care on local purchase of organic rice and showed the reality of competition involving both in- puts and processed products. This study provides the im- Other special measures to buy organic rice plication for expansion of organic sake-brewing and rice Questions on organic-sake sales for sake as well as implications for the development of or- Annual sale of organic sake ganic agriculture involving organic processed food. To How to find the purchasers of organic sake maintain the competitiveness and image of high-quality How much care on local consumption of organic sake organic processed food, the relation between ingredients How is organic sake exported? and processed products should firmly be taken into con- sideration for the productions and sales and local organic Questions on prospects, difficulties, and policies agriculture. This study showed availability and affordabil- Any prospect to increase organic sake production ity of ingredient organic products were a key. The mis- Any difficulty in organic sake production match could affect the product identities. Furthermore, Any policy measures to apply maintaining the sales would demand consumer under- standings of organic agriculture in general as well as spe- Authors’ contributions cific products. While studying future productions, sales, Yoshitaka Miyake and Ryo Kohsaka coauthored the manuscript. The authors and exports of sake, more ideas and studies are necessary read and approved the final manuscript. for the promotion of organic processed products to de- velop local organic agriculture in other places in Asia. As Funding The study for this article was funded by Policy Research Institute, MAFF of is the case with Japan, the connection of organic and local Japan as the Commissioned Project on the Policy Science of Agriculture, was traditional but new to explore. Forestry, and Fisheries from the year 2018 to 2020: Factors to Facilitate Production and Export of Organic Agricultural Products: Analysis of Status and Trends in EU and Implications for Japan. In addition, the study was Appendix funded by the JSPS KAKENHI Grant Numbers JP16KK0053 and JP17K02105 and DAIKO Foundation. Questions to ask organic-sake breweries in this study General questions on a corporation Availability of data and materials The data of this study are available upon request. Brewery location Year of company creation Competing interests Year of incorporation The authors declare no conflicts of interest. Capital fund Received: 7 April 2020 Accepted: 4 August 2020 # of employees # of non-regular or part-time employees References General questions on sake-brewing 1. Sato J, Kohsaka R. Japanese sake and evolution of technology: a comparative view with wine and its implications for regional branding and Annual sake production tourism. J Ethn Foods. 2017;4(2):88–93. Miyake and Kohsaka Journal of Ethnic Foods (2020) 7:30 Page 11 of 11 2. Aramasa. History. n.d. http://www.aramasa.jp/around/.Accessed 27 July 2020 24. Kohsaka R, Matsuoka H, Uchiyama Y. 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"Journal of Ethnic Foods"Springer Journals

Published: Sep 3, 2020

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