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A Japanese Sake Brewery Making Decisions

Article  in  Supply Chain Forum · January 2013

DOI: 10.1080/16258312.2009.11517212

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 A Japanese Sake Brewery
Making Decisions
Tatiana Bouzdine-Chameeva This case describes the drastic changes in sake distribution channels in Japan since
BEM - Bordeaux Management School 2000. The number of local sake breweries and amount of sake production has
Tatiana.chameeva@bem.edu significantly decreased. In 2000 there were about 2,000 breweries in and by March
Mari Ninomiya 2009 their number had decreased to 1,353 breweries.1 A discussion of current sake
Fukuoka University distribution channels together with an analysis of the structural changes in sake
Ninomiya@fukuoka-u.ac.jp production in Japan during the last 50 years suggests several hypotheses on the
possible evolution of sake distribution channels. After learning about the Kitayama
Commented by
brewery story and considering experts' advice, the reader should consider the future
Toyohiko Iida potential for the Japanese sake supply chains and create a defensible policy for a
CEO, Lida Co, Ltd
small local brewery.

Hiroshi Kitayama, the owner of a small kura2 in the Kitayama san thought that he promised yesterday to
Kansai area of Japan (the middle part) was wistful this help his workers with rice polishing for Junmai-Shu and
morning as he planned his day. Kitayama's mother had Ginjo-Shu sake (traditional sake; see Figure 2 and Table
passed away several days previously at the age of 78, 4 later). Because this function is in another building, he
and a priest was invited this morning to conduct a would not break the religious rule, so he planned to do
traditional ceremony of ritual mantras to Bodhisattva, that in the early afternoon. The morning hours are good
which are held weekly during the seven weeks after the for thinking quietly, and Kitayama san decided to study
funeral. Throughout these 49 days Kitayama san will attentively the possibilities of enlarging his distribution
have to refrain from entering his brewery, even to just network to maintain sales.
step inside. Hiroshi knew that he could count firmly on
his toji3, but it was still quite unusual for him to start the Recently Kitayama san received a proposal from a new
day without taking a look at rice steamers and vats association promoting the principle Chi San Chi Sho
where the koji4 mixture takes over the rice (see Figure 1). (local production, local consumption), and he thought
Kitayama san enjoyed getting a whiff of fermentation to that it might become an interesting prospect to consider
balance the day with his effervescent pace. in terms of new distribution possibilities, especially

Figure 1
Typical appearance of a local sake brewery in Japan.

1. This is the number of breweries that produced sake in the brewing year of 2008 (from April 2008 to March 2009). The number of sites possessing a licence
to produce sake is 1,842 according to the National Tax Agency](2008).
2. Kura or Kuramoto refers to a small sake brewery or a place where sake is brewed. In general, a kura is a one- story house with thick fireproof walls to
protect valuable items.
3. A toji is a brew master who controls the whole process of sake production. A similar position is held by an oenologist in wine making. The toji's name is
sometimes written on a sake bottle's label, and is thought of as a sign of exclusivity.
4. Koji is an enzyme essential for brewing sake and used in producing most of the alcoholic beverages of Asia.

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 108 www.supplychain-forum.com
 A Japanese Sake Brewery Making Decisions

Figure 2 the volume of the production of Honkaku-Shochu

The ordinary rice grains (right) and the mil- surpassed that of sake (see Figure 3).
led or polished rice grains (left).
Sake production was always strictly regulated by the
authorities because it is made from rice grains and rice
is the staple food for the Japanese nation. The brewing
process required ample space to ferment in one year
and its successful production was dependent to a great
extent on working capital. Thereby brewers were
representatives of the upper-class in Japan and
originally sake was produced and consumed mostly by
the upper classes5.

Before the Edo period (1603-1867), large land owners

produced sake from rice surplus for drinking during the
festivals in the villages. In 1657 the Tokugawa shogunate
started issuing licenses (the wooden labels) for sake
because it concerned natural bio agribusiness products
production. This measure led to a total control of the
like traditional Junmai-Shu. The new rice producers'
number of breweries all over Japan. Each year the
network was in his relatively close neighbourhood, so
authorities also allocated the amount of rice available
the association asked him to brew sake made with rice
for sake production.
grown in their hometown. Kitayama san accepted their
request in 2008, considering the positive impact his
After the Meiji restoration in 1871, the new government
decision had on his social contribution to the regional
wrote the first rulebook on collecting liquor taxes.
economy, increasing agriculture production, and
According to the new regulations, all persons
protecting the natural environment of his hometown.
possessing sufficient capital were allowed to operate
However, there were certainly some changes that might
their own sake breweries. Within a year around 30,000
have far-reaching effects, which needed to be explored
breweries sprang up throughout Japan. The Japanese
carefully. The local wholesaler, with whom Kitayama has
Industrial Revolution helped increase production by
dealt, now has become a distributor, and this could also
introducing automation and machinery into the brewing
affect all the distribution channels of Kitayama sake.
process, so a popular drink became even much more
available. Conversely heavy additional governmental
Sake sales started slipping since 2005 and they still taxes were levied on sake production during the next 20
continue to decrease. Table 1 shows the latest statistical years. Consequently, by 1919 the number of the
data on sake production figures in volume. breweries had decreased to 9,552.6
Large and medium-sized breweries especially have During World War II, the Japanese government effected
decreased their turnover; however, some small local a compulsory consolidation of Japanese enterprises.
breweries have recently grown at a steady pace. The The sake brewing industry was considered to have little
Kitayama brewery is one of them. Their sales began a contribution to a wartime nation; both the number of
yearly increase in 2007. The current sake distribution breweries and the output were reduced by almost 50
channels of Kitayama need to be reconsidered to percent. Half of the breweries were closed down or
continue this success. changed to war plants.

The history of sake production in Japan After WWII, the sake industry still remained under
governmental control, with imposed strict quotas on
The traditional rice wine of Japan, sake, known as 'the rice grain material. The government decided to add
drink of the Gods,' has a history of more than 2,000 artificial additives to sake to cope with the lack of rice
years steeped in tradition, innovation, and custom. Sake material.7 Even after the 1955 revival of the Japanese
is used for many different purposes in the Shinto economy, the quota of rice material and the price
religion, including as an offering to the gods and for
purifying the shrine. It still remains one of the most
5. A famous Japanese saying is “having built up Kura” which means
popular alcoholic beverages in the country, but in 2004 getting rich.

Table 1
Volume of sake production in Japan.

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 109 www.supplychain-forum.com
 A Japanese Sake Brewery Making Decisions

Figure 3
Alcohol production and consumption in Japan (in thousands of kl)

Source: National Tax Agency Japan, 2008

control of sake continued. The big breweries decided to The sake brewing process and the role of the toji
buy sake from local breweries (Oke-Uri, see following for
details) to improve the quality of their product. Until the 17th century, sake was brewed all year round.
From the mid-17th century on-the early period of Edo-
Until the early 1960s the prices for sake were fixed by sake brewing became a seasonal affair from October to
the authorities and based on regulations and taxations, March, and a temporary employment relationship was
despite the fact that the sake industry suffered from introduced to the kuramoto. The toji and kurabito8 were
overproduction. The rapid economic growth of Japan at farmers or fishermen during summer, and at the
this time and the liberation of prices in 1964 boosted beginning of autumn moved to a kura to work. Most toji
production of sake all over the country. An authorized did not live close to their kura; sometimes they lived as
production cartel was carried out from 1969 to 1974, but far away as hundreds of kilometres.
it was ineffective. In 1964, the small and medium size
enterprises (SME) promotion law was adopted to Brewing sake itself needs constant efforts, like many
upgrade an industrial structure and improve the processes; in particular, controlling the koji and yeast
productivity of SMEs. It included various measures to
are quite complex. It is considered more of an art than
modernize designated industries, which included the
engineering or a science. The ultimate responsibility for
sake brewing industry, for the next decade. Thanks to
the quality of the final sake product lies on the toji, who
this law, groupings of breweries through joint
should master every technical aspect of brewing.
businesses, alliances, mergers, and cooperation were
Although brewing has always depended on a toji's six
stimulated and facilitated.
senses, nowadays measuring instruments have been
introduced to help in sake creation. Minimally, toji have
Nevertheless, the structure of sake production was not
to be good at numbers; they calculate from the given
much affected by the law: most of the sake breweries
data to make production plans and keep accounts to pay
had a long history, and the owners cared about
maintaining the family business and their own brand. taxes.
Eventually, the SME promotion law proved to be
effective by creating bottling cooperatives. However, the toji's duties extend beyond actual brewing.
Toji recruit kurabito (often coming from far-away
By the 1980s, local sake breweries had come to a summit villages) and sign contracts with them. For almost six
of success. Local sake, especially in the Nigata
prefecture, the northern part of Japan, attracted 6. Nakamura (2002).The number of breweries continued to decrease to
7,077 in 1936.
considerable attention and attained a significant growth. 7. The artificial additives were alcohol, starch syrup, saccharine, shochu,
Since then, sake production and the number of sake and an amino acid that tripled the sake yield and was called triple brewed
breweries have decreased. There were 2,512 breweries sake. Until 2006, when the liquor tax was revised, this triple brewed sake
was]also called just sake.
in 1983, and in 2007 there were only around 1,700 8. Bito means the person, so kurabito is a name used for workers in a sake
breweries possessing licenses. brewery, kura.

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 110 www.supplychain-forum.com
 A Japanese Sake Brewery Making Decisions

months, the toji and the kurabito work together leadership role in sake transactions: they bore sales
constantly, live in the same place, and are separated risks and guaranteed sake quality by putting their trade-
from their families. As the administrator, the toji care for mark or a brand name on a particular sake. Breweries in
the kurabito and try to provide a peaceful atmosphere in Nada and Fushimi were compelled to sell their product
the kura. It is no exaggeration to say that the success of under merchants' brands following the simple principle
the brewery depends on the ability of toji.9 of one brand-one merchant. In 1931, when a brewery in
Nada created its own brand name designating an
There are some areas in Japan, such as Tajima (Hyogo), exclusive dealer in Tokyo, the decision was considered
Tamba (Hyogo), Nambu (Iwate), that are traditionally astonishing in the industry.11
famous for producing talented toji. The toji who come
from these areas are said to be as talented as the Nowadays these big rural sake breweries are top-
brewers. Ancient sake-brewing techniques and skills ranking players producing over 10,000 kl per year, and
have been inherited by those in toji groups across Japan. are classified as Type 1 breweries. In 2007 the first to
However, not all kurabito can become a toji because the tenth largest breweries produced 48.8% of the whole
toji employment system is based on merit. Toji have to volume of sake in Japan. Type 2 breweries are much
possess different talents: being a good technician, a well- smaller in size and primarily supply local markets.
organised administrator, and a person of character.
Bulk sake trading among breweries existed for many
Many kuramoto have been operating for 200 or 300 years and balanced inventory overages or shortages.
years and have been handed down from generation to Before 1944 a liquor tax was levied on an output basis;
generation, remaining in the same family even now. breweries had to pay depending on the quantity of the
Some kurabito also have been working for many production. In 1944, the liquor tax was reformed; liquor
generations but not always in the same kura. Nowadays, tax was levied on the quantity of shipment from factories
not every sake brewery has such talented toji. In in the end breweries selling bulk sake were exempt from
addition, it is not essentially a contract system : the toji taxes. From 1944 onwards, as mentioned earlier, big sake
is a part-time worker although also considered an breweries increased their purchase of bulk sake from
independent craftsperson. local breweries. Local small Type 2 breweries not only
bottled sake by themselves, but also started to actively
In the 1960s big sake companies in Nada and Fushimi sell their production to the big Type 1 breweries (this
built new factories equipped with air-conditioning and type of contract is called Oke-Uri).
started operating year round. At the same time, they no
longer used the toji employment system. Before the 1980s small breweries were exempt from
taxes. Preferences in terms of distribution channels
Some small kura wanted to maintain old traditions and were to sell via big breweries. Small companies were
combine them with new approaches. In one kuramoto, obliged to have a license for producing sake; however;
the president's son went to university to study taxes were paid by the Type 1 big breweries where sake
fermentation, and after the training, became a toji. In was bottled under national brand names. In 1973 sake
another kuramoto, the president decided to abolish the production reached a peak of 1,766,000 kl,12 and was
toji employment system, and the toji and kurabito considered a period of stability for small producers.
became full-time employees of the company. The
number of farmers declined in Japan; in 2001, there were At the end of the 1980s the sake industry went slowly
1,196 toji and 1,960 kurabito registered with the into a recession because of the phenomenon of "bubbly
Japanese Toji Association. economy" in Japan, an economy in which trade takes
place in large volumes with a discrepancy between the
Sake distribution channels price and the intrinsic value of the product.
Deregulations were applied to many industries and sake
In the early Edo period, sake breweries developed distribution channels went through a strong
within town limits or in their close vicinity. Later, sake transformation, resulting in the appearance of
breweries expanded into rural areas.10 Since the late discounters.
1880s rural sake breweries spread, vanquishing the
town sake breweries. During this same period, the sake Since the beginning of 2000 the number of sake
trade flourished: merchants bought sake in areas breweries in Japan has been shrinking. However, local
famous for good quality sake, such as Ikeda, Nada brand names for sake have become more popular. Big
(Hyogo), Fushimi (Kyoto), and shipped it to the huge groups have started selling their sake to some small
Edo (Tokyo) market. Thanks to an exclusive privilege breweries who then sell the same sake under the
given to them by the Tokugawa shogunate in the middle
of the 17th century, merchants built up an immense
capital and prospered until 1927, when they began to
lose power because of a financial crisis.
9. There is a Japanese saying used in a brewery, 'Wajo Ryousyu,' which
Although breweries in Nada and Fushimi enjoyed the means 'Friendship makes good sake.'
10. See Yunoki M. (1989).
benefits of trading sake with Edo merchants, when they 11. Nishinomiya S. (1989), p. 208.
became large enough, the merchants took on the 12. Based on the data from Nikkan Keizai Tsushin (2000), p. 6.

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 111 www.supplychain-forum.com
 A Japanese Sake Brewery Making Decisions

Table 2
Current sake distribution channels in Japan

different brand names-the local brand names of these structure of sake supply chains due to regular changes
breweries. in the taxation system, different level of transportation
fees (in general very high in Japan), variety of sake
Alternating sake selling and sake buying between Type 1 products, and new market trends (see Table 3).
and Type 2 sake breweries continues to affect the

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Sake production and classification of sake Some breweries have switched completely to producing
sweet sake liquors (especially in Kyushu). Other
Several types of sake exist today (see Table 3 for details) breweries prefer to reorient their production to meet
and new consumer trends influence production. the demands in traditional products.
Normal and synthetic sakes are created by long-standing
traditions and conquered their market due to their low The history of the Kitayama brewery
price for the consumers and high profitability for the
breweries. In the past many consumers had not been The Kitayama brewery is one of the very oldest in the
able to distinguish the different types of sake, Kansai area, the founder of the Kitayama started to brew
particularly in lower-priced sake and between sake in 1820. The brewery has existed for more than 180
traditional and synthetic sake. They are still put on the years as a family business similar to many other local
same shelf and into boxes with similar designs. In 1992 sake breweries in Japan. The company was registered as
new technology enabled a large brewery to liquefy rice a SME of sake brewing in 1948. In 1955, a new 25-year-old
with an enzyme. This technology makes brewing even kurabito entered the brewery, subsequently becoming a
more cost efficient and lowers the price even further.13 toji in 1970. He stayed with the company for 51 years
and contributed much to the quality improvement of
Currently there are two new trends concerning the Kitayama's sake. This particular toji was incredibly
amount of sake production. Although total sake knowledgeable about everything related to the sake
production has declined, the figures for sake production brewing process. His influence among tojis within the
of specific denominations are constantly growing little Noto Toji Association was growing resulting in an
by little (see Figure 3 and Table 4). This trend shows a enhanced image of Kitayama sake both in quality and
gain in consumers since 2004- 2005. reputation. Kitayama honours this toji with a special

Table 3
The classification of alcoholic beverages in Japan since May 1, 2006

Source: National Tax Agency http://www.nta.go.jp

Table 4
The volume of sake production by specific denomination15

Source: National Tax Agency http://www.nta.go.jp

13. For example, 2000 ml of normal sake in a box costs between 749 Yen and 900 Yen in a discount store in 2008.
14. The raw materials used for normal sake and for sake of special denominations are rice, koji, water, brewing alcohol, and others breweries use alcohol,
shochu or sake, glucose, saccharine, amino acids, and other fragrances to create a sake compound. It is important to note that for normal sake, brewing
alcohol and other ingredients must be under 50% of the weight of the rice.
15. All the three types of sake of special denomination-Honzojou-Shu, Ginjo-Shu, and Junmai-Shu-are made of rice and koji. Junmai-Shu does not contain
brewing alcohol, but the other two types do; brewing alcohol must be under 10% the weight of the rice in Honzojou-Shu and Ginjo-Shu. The minimum rate of
polished rice is 70% in Honzojou-Shu and 60% in Ginjo-Shu.

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 113 www.supplychain-forum.com
 Table 5
Kitayama sake products and prices

sake that he created and that bears his name. A new toji is the biggest nationwide sake competition since 1911.
took the reins of the sake brewing process in Kitayama For example, 957 breweries participated in BY 2007; only
in 2006. Kitayama was a pioneer among small breweries: 255 of them got golden prizes.
the brewery started using cooling machines for steamed
rice in 1961, bought the first eight big tanks to stock Kitayama san relies mainly on the contracts with
sake, introduced the air shooter in the 1970s, and wholesalers: almost half of Kitayama's production goes
brought in the automatic rice-koji-making machine in to the local wholesaler, all of whose activity is
1983. conducted within one prefecture. They also have a
contract with a sake wholesaler in Tokyo and use every
Hiroshi Kitayama's mother was the seventh president of opportunity to participate in exposition salons, local
the company after the death of her husband in 1968. In and national sake-tasting events, and welcome sake
1971 she decided to sign a contract of Oke-Uri with tours.
Gekkaikan, a big famous brewing company in Japan,
selling a large part of the Kitayama sake production. In 2008, 7-11 started a new business of selling alcoholic
beverages through the Internet. Consumers can order
This contract lasted for almost 15 years.
online and then can receive their ordered goods at any
7-11 shop all over Japan without transportation fees.
Hiroshi entered the family business after graduation in
Although the Kitayama brewery was asked to join this
1978, and became the eighth president of the company
new system, Kitayama san decided not to get into this
in 1991, just when the first signs of weaknesses in the new Internet venture. Kitayama's sake is of exceptional
traditional sake distribution channel system appeared. quality and what is found in the 7-11 stores has an image
After several years of confusion and high instability, an of ordinary goods, which would lose Kitayama's
important decision was made by Kitayama san in 1998. uniqueness. Kitayama san thinks “I understand the
He decided to deal with a special sake wholesaler (see potential demand of Internet sales. On the contrary, I
Table 2) in Tokyo. know the importance of the merchants, dealers who
understand what our sake is and can then explain that
Kitayama has been lucky to have had such talented toji to the consumer. Person-to-person selling is the way our
during the last half century. The toji is almost equal to distribution channel is organised; it is the source of our
the president of the kuramoto in all aspects of brewing; competitive superiority. We have already sold our sake
their relations must be grounded in total mutual trust. through this dealership. I feel discomfort in selling sake
Nowadays, employing toji means keeping traditions, through Internet sales where the goods are sold
brewing sake following old customs, which has become automatically without any effort.”
rare. Kitayama san is keen on keeping the tradition of
the toji, on the one hand, but he constantly wants to In the sake market, some breweries focus on mass
modernise the sake production on the other hand. production and low prices; others put their energies
into selling in the huge city markets like Tokyo because
The Kitayama brewery future? of their reputation for high quality and high price sales
in high repute. Now local breweries like Kitayama, which
The Kitayama brewery possesses its own brand name produces local sake for local customers, is at a
(see Table 4), producing a small amount of normal sake crossroad.
for their local customers and traditional sake of specific
The only dream of Kitayama san is to preserve the brand
denomination types (see 6 and 7 in Table 2). Moving to
name from breaking; he wants to plan for 10 to 20 years
a natural biological sake requires focusing more on the
ahead. Being the president of a company, Kitayama san
raw materials and rice quality. At present, Kitayama san
is obliged to think about yearly management and profits.
considers that it is very difficult to make sake from all
However, he has to perform his duty of handing down
organically grown rice. the traditions of the kura to the next generation, as well
as honouring what the ancestors did. Kitayama san
Kitayama has a strong reputation for its exceptional thinks 'to keep the balance between running the
quality in all their sake products. For five consecutive enterprise and preserving family business is a real
years since 2002 (nine times in all categories) Kitayama challenge.'
has won the golden prize of the National New Sake
Awards of the National Research Institute of Brewing. It 16. For 2009, the exchange rate is 1,000 Yen = 7.5 euros

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 114 www.supplychain-forum.com
References
Ishikawa, K. (2004). Traditional markets Nikkan Keizai Tsushin Co., Ltd. ed. Yunoki, M. (1989). Sake brewing
and product development: The case of (2000). Data 500 shurui shokuhin industry in Japan: From the Tokugawa
Gekkeikan. Japanese Research in sangyou" (Alcoholic beverages and food to the Meiji-Taisho Era. Shakai Keizai
Business History, 21, pp.33-50 industry", Tokyo: Nikkan Keizai Tsushin Shigaku (Socio-Economic History),
Co.,Ltd. 55(2), pp.1-11.
Nakamura, T. (2002). Shuzo-gyo no
suuryousi (A quantitative history of Nishinomiya, S. (1989). Nishinomiya
sake brewing 1871-1935). In Nakamura T. shuzo 100 nenshi (100 years of
& Fujii A. (eds.), Toshika to zairaisangyo Nishinomiya brewery). Nishinomiya,
(Urbanization and traditional industry), Hyogo: Nishinomiya Shuzo.
pp.179-209. Tokyo: Nihon Keizai
Hyouronsha. Tanimoto, M. (1996). Jouzougyo
(Brewing industry). In Nisikawa S.,
National Tax Agency Japan. (2008). Sake Odaka K., & Saito O. (eds.), Nihonkeizai
no shiori (Statistics on the alcoholic no 200 nen (200 years of Japanese
beverages). Accessed May 18, 2009, economy). pp.255-280. Tokyo: Nihon
from http://www.nta.go.jp/shiraberu/ Hyouronsha.
senmonjoho/sake/shiori-gaikyo/
mokuji.htm

COMMENTS ON THE CASE STUDY

Mr. Toyohiko Iida critics (the United Kingdom, for surprised with their differences.
CEO, Iida Co., Ltd. instance, blamed the unpopularity That is, sake tasting is conducted
Osaka, Japan of Scotch whisky on the absence of to find its faults. Smells of over
available licenses in large-scale maturity, deterioration, yeast, are
shops). This radical deregulation the smells that should not actually
The consumption of Japanese sake
took ten years to carry out and is exist. ". However, smells of vanilla,
has been decreasing since its peak
now almost done; however, small red fruits, and animals are those
in 1974. In particular, as is the case
with Kitayama, the decline of local liquor shops were not protected expressing virtues of wine aromas.
sake breweries is even more from the negative effects of this In short, sake tasting is evaluated
serious. To tell the truth, I myself change. Many local liquor shops by deducting points, and wine is
am one of these kuramoto and am closed or joined with major evaluated by adding points. There
wondering how to manage our convenience chains as franchisees. is only one best in a point-
kura. Those who had dealt with local- deducting system whereas there
made sake started selling major are many top levels in a point-
Some of the reasons for the brands of sake according to the adding system.
decline in Japanese sake have policies decided by few buyers at
been pointed out, such as higher the nationwide chain The second fact that indicates the
costs compared of other alcohols headquarters. Those local kura, traditional sense of values is that
due to the restriction on imports like the Kitayama, are obliged to many flagship sakes of most
of its raw material (rice) and a build new supply chains. kuramoto are made of
myth that sake contains high yamadanishiki, which originated
calories. Above all, the changes in It takes time to construct new in Hyogo. Yamadanishiki is a
the supply chain because of supply chains. Moreover, the other variety of rice considered 'king' of
deregulation engendered the fall obstacle for those kuramoto such sake rice. Indeed, yamadanishiki
of local kura. High liquor taxes are as Kitayama is, I believe, the can make a good quality sake with
imposed and production and sale traditional sense of value of rich aroma and full-round taste.
of alcohol in Japan requires a Japanese sake. Following, I will Also, large and hard grains of
license, which was strictly introduce two facts that yamadanishiki can be well handled
regulated before the 1990s. It was demonstrate this traditional sense. by inexperienced toji, and
mostly difficult for supermarket experienced toji can make perfect
chains and CVS chains, which The first concerns Japanese sake sake with it. Especially the top
developed extensively since the tasting. The tasting process of sake class of yamadanishiki cultivated in
1970s, to acquire a liquor-selling and wines are the same: look at its a special area in Hyogo is by far
license. Therefore, small local colour first of all, swirl the glass the most exceptional in quality.
liquor shops played an important gently, smell with the nose, then However, this means that anybody
role in sake sales. In the 1990s the taste with the mouth. However, can make a quality sake with little
Japanese government decided to when I started studying wine difference among the products.
deregulate this required liquor tasting in order to start wine Eighty-five percent of kura sake
license in response to foreign importing 15 years ago, I was selected for participating in the

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 115 www.supplychain-forum.com
 National New Sake Awards in 2008 natural aspect, and a maker's brewing technologies have
was made from yamadanishiki." passion. developed greatly. It is impossible
to find sake of poor taste in the
It is difficult for a small local kura Supply chains never convey just market, which means that
to compete successfully against a merchandise; they offer growing the business is even more
larger company, so it is necessary information and a company's difficult.'
for them to respect their sense of passion, which inspire impressions.
specialty in a niche and to These intangible elements are, In the era of post-WWII growth, an
challenge the market daringly. however, expressed differently average quality with good cost
After a period of rapid expansion, depending on which channel is performance was the main priority
Japan is now in an era of stable used. Therefore, when Kitayama of sake makers. Now any kura can
growth. Each person has a san thinks of the sake business, it is make average sake based on the
different preference for the style essential for him to evaluate the developed technology, so it is
of sake. Kuramoto like Kitayama new marketing strategies and important for them to create new
will develop a new way when they channel choices to be successful senses of value surrounding
learn to respect these various Japanese sake and to spread them
aspects of value. They should aim I spoke with the director of a widely. When a supply chain that
not to create sake with no faults major sake brewery, who said the can convey this new sense is
but to create sake that can impress following: 'I chose this company 40 found, Japanese sake will regain
people. In fact, people are years ago because the sake of its shining potentials. I expect
touched not only by the tastes and other companies did not taste Kitayama san's new strategy and
the aromas of sake, they are also good to me; the sake-brewing efforts will bring about new
affected by those intangibles technologies varied from kura to prosperity for his company.
behind it, such as history, its kura. In the last 40 years, sake-

Supply Chain Forum An International Journal Vol. 10 - N°1 - 2009 116 www.supplychain-forum.com

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