IJERD ± International Journal of Environmental and Rural Development (2018) 9-2

Research articleerd

Theme-Community Based Adaptation Strategies Toward
Sustainable Rural Development: Case from a Local Tofu
Company in Saitama Prefecture, Japan
NINA N. SHIMOGUCHI*Tokyo University of Agriculture, Tokyo, Japan
Email: n3nocon@nodai.ac.jp

HIROKI INAIZUMITokyo University of Agriculture, Tokyo, Japan

KENJI OMURO
NARO Western Regional Agricultural Research Center, Hiroshima, Japan
Received 31 December 2017

Accepted 15 October 2018(*Corresponding Author)

Abstract There are several past researches cond c ed on heme-comm ni
he ein heinitiatives and/or relationship among stakeholders focus on a certain product or concept
regardless of traditional political boundaries. This paper focuses on tofu or its raw material,soybean. Tofu is one of the main soybean processed products and an integral part of a
traditional meal in Japan. Although the amount of its domestic production and consumption
have only changed slightly, the number of tofu companies have been drastically decreased
from 50,000 in 1960 to 8,000 in 2014. This can be attributed to the inability of small-scale
tofu companies to compete with prevalent mass production of large-scale processing
companies, and to respond to the demand of supermarkets for much lower retail price. Inorder to provide possible ways to gain resiliency for local small-scale companies, this study
aims to determine the adaptation strategies of a local tofu company in Saitama Prefecture,
Japan using the case study approach. Company visits and key informant interviews revealed
that the local tofu company conducted (1) product development in accordance with season,
farming community and consumer demand, (2) introduction of TEIKEI for soybean farmers,and (3) implementation of innovative selling activities. Moreover, these initiatives furtherpaved way for sustainable rural development. For further study, there is a need to determine
the development of its partnership with and its respective impact to the local soybean
farmers.
Keywords organic farming, soybean, TEIKEI, product development, selling

INTRODUCTION
There are several past researches cond c ed on heme-comm ni 1) wherein the initiatives and/or
relationship among stakeholders focus on a certain product or concept regardless of traditional
political boundaries. This paper focuses on tofu or its raw material, soybean. Tofu is one of themain soybean processed products and an integral part of a traditional meal in Japan. Although theamount of its domestic production and consumption have only changed slightly, the number of tofu
companies have drastically decreased from 50,000 in 1960 to 8,000 in 2014 (Zentoren, 2017). Thiscan be attributed to the inability of small-scale tofu companies to compete with prevalent mass
production of large-scale processing companies, and to respond to the demand of supermarkets formuch lower retail price.
In order to provide possible ways to gain resiliency2) for local small-scale companies, thisstudy aims to determine the adaptation strategies of a local tofu company (thereafter, LTC) inSaitama Prefecture, Japan using the case study approach.
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METHODOLOGYThis study utilized the case study approach using both qualitative and quantitative data. Thisfocuses on the experiences of LTC operating in Tokigawa, Saitama Prefecture, Japan since 1946.
Tokigawa Town, which is located North-West of Tokyo, has a land size of 55.9 sq. km. andpopulation of 11,488 persons (TOT, 2017). Primary data were gathered from company visits andkey-informant interviews with President W (thereafter, PW) conducted in June and December 2015,and November 2016. Gathered information included company profile and vision, company
development, relationship with other stakeholders, usage of locally-grown soybeans to name a few.
Moreover, preliminary and additional information were also gathered from the special lectures
given by PW about his tofu company during the Shimosato Farm Tour 3) in May 2015 and 2016,respectively.
RESULTS AND DISCUSSION
Profile of LTC
Table 1 shows the highlights on how LTC developed as a company, which was initially established asa family-managed konnyaku (jelly-like cake made from konnyaku flour) store by the founder (fatherof PW) in 1946. Since konnyaku showed to be unsellable during summer, the family also engaged in
tofu business in 1951. Selling activities was mainly conducted by peddling in 1955, and expanded towholesale selling to local stores of food, vegetables and/or fish in 1965. PW took over the business in1979 when he realized that the founder was heavily affected by the passing of his mother. This was
also the time when PW, as then college graduate, gave up his dream to be an accountant.
Table 1 Highlights on the Development of LTC
Year1946
1951
1955
1965
1979
1985
1992
1993
1997
2002
2003
2004
2005

2006
2007
2012

EventsFounder (Father of the current president) established a family-managed konyaku store in
Myokaku Village (Presently known as Tokigawa Town)
Engaged in family-managed tofu business
Mainly sold tofu by peddling
Started wholesale selling tofu in local stores of food, vegetable and/or fish
Mother of PW passed away
Took over the business from founder
Shifted to retail selling at supermarkets as main channel
Experienced business challenges due to extreme price competition among supermarkets
Started construction for tofu factory expansion
Secured parking lots for three (3) delivery vans
Met with organic farmers and consumers who prefer organic / natural produce
Shif ed o di eco e elling i h Territorial Development with Cultural Iden i
as amanagement policy
Started being supplied by local farmers from Hatoyama Town, followed by Ogawa Town
Made improvements in the main store
Converted family business to a limited company (LTC) with 10 million yen capitalFounder passed away
Received the Saitama Governor Award for Agriculture and Forestry Division specifically for its
local production-local consumption initiatives
Moved the main store to new location for establishment of disposal facility and expansion ofparking space, and improvement of production/selling operations
Received the Minister of Agriculture, Forestry and Fisheries Prize as the Best Food Retail Store(National Competition)
Reached 340 million yen in sales
Received The Mainichi Newspaper Agriculture Record Award
Started mobile store

Source: Key-Informant Interviews, June 2015, December 2015 and November 2016.
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In the early 1980s, most tofu companies were mainly dependent on supermarkets as mainchannel. However, the price competition among supermarkets became extreme in 1985.
Supermarkets lowered the price from 80 yen per to 30 yen (US$1 = 119.49 yen, Mitsui SumitomoBank, 1 December 2017) per pack to attract more customers. However, this resulted to great
financial burden for tofu companies, including LTC. In PWs search for other business options, PW
had the opportunity to start exchanging ideas with organic farmers (including Mr. Kaneko of
Shimosato Farm, pioneer organic farmer in Ogawa Town, Saitama) and consumers who preferorganic/natural produce in various study groups and events since 1993. By 1997, PW reformulated
its management policy to a company focusing on Territorial Development with Cultural Identity.
Specificall , PW belie e ha afe and good ali food a e made ba ed on good h man
relationships. Thus, the store will continue to keep promises to the society and to serve as theb idge fo local fa me and con me b o gh oge he b of making. In o deod,connectedness with and among local farmers, customers, employees and other stakeholders are
significantly valued. In the same year, transactions with local farmers from Hatoyama and Ogawa
Towns were initiated.
In order to fulfill the management policy, improvements were made in the main store and PW
converted family business to a limited company in 2002, then the store moved to the current
location in 2005 to improve its production and selling operations, and its service to valued
customers.
Currently, LTC employs about 50 persons, including part-time, mostly residing within 15 km
away from the store, conveying that LTC also supports local employment. In addition to its own
local produce for local consumers, it also supports local farmers by allocating a corner at its store
for local vegetable, flowers and other local products. Since 2006, the annual company sales havebeen more than 300 million yen.
In recognition to LTCs various efforts and initiatives, PW has received various awards such as
Saitama Governor Award (2004), Minister of Agriculture, Forestry and Fisheries Prize as the Best
Food Retail Store (2005) and The Mainichi Newspaper Agriculture Record Award (2007).
Adaptation Strategies
Soybean-based TEIKEI: In order for LTC to offer various tofu products made from locallyproduced soybeans, LTC gives value and support to its soybean farmers through TEIKEI system.
LTC president first heard about TEIKEI4) (Producer-consumer co-partnership that is not limited tobuying-selling transaction) from Mr. Kaneko of Shimosato Farm and wanted to make a SoybeanBa ed TEIKEI. C en l , LTC ba ic polic in p cha ing soybeans are (1) price is set at a point
wherein farmers can sustain its operations and replant for next season; (2) all harvested soybeans
are purchased; and (3) all payments are made in cash only.
Table 2 Local Soybean Supply of LTC by Location and Variety, 20141)
Location

Kumagawa City
Ranzan Town
Ogawa Town3)
Kawagoe City
Hatoyama Town
TotalAoyama
Zairai2)
48,3830
13,5907,320
9,730
79,023

Soybean variety (kg)
Miyagi
Sato Irazu
ShakinShiromi
Nashi
00360
4,350
9,900
2,730
0000
6,24000004,350
16,1403,090

TotalTanba
Kuromame
138
0000
138

48,743
16,98013,59013,5609,430
102,603

Source: Key-Informant Interview, December 2015.
1) In terms of size, LTC had been supplied with extra-large, large, medium and small sizes of soybean. Large sizedsoybeans accounted for 95% of the total supply.
2) Aoyama Zairai accounted for 77% of total supply.
3) Ogawa Town farmers supplied organically-grown (yuuki saibai) or specially cultivated (tokubetsu saibai) soybean.
Organically-grown soybeans accounted for 38% of total supply from Ogawa farmers.

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Table 2 shows local soybean supply of LTC by location and variety in 2014 with a total
supply of 102,603 kg. There were five (5) varieties of soybean namely Aoyama Zairai, Miyagi
Shiromi, Sato Irazu, Shakin Nashi and Tanba Kuromame. Among them, Aoyama Zairai accounted
for 77% of total soybean, followed by Sato Irazu (16,140 kg).
In terms of location, Kumagaya City supplied the highest volume, amounting to 48,743 kg(47% of total supply), followed by Ranzan Town (16,980 kg) and Ogawa Town (13,590 kg). It
should be noted that Ogawa Town supplied organically-grown (yuuki saibai) and speciallycultivated (tokubetsu saibai) soybean. Organically-grown soybeans accounted for 38% of total
supply from Ogawa Town. In order to further promote local brands, LTC also offers special
products made from certain farms, locations or varieties (e.g. Shimosato Series). Although thesoybean supply fluctuates every year, volume supplied by Ogawa farmers has been increasing from6,590 kg in 2011 to 13,590 kg in 2014.
Product development: LTC sells a total of 100 products, of which own brand accounts for about
30-50 soybean products including special products for winter and summer seasons. It also offers
special local products by soybean variety (e.g. sato irazu momen tofu, sato irazu nigari tofu) andlocation/farmer (e.g. Shimosato tofu series, Hatoyama natto, Shimosato natto). Jimoto no daizu detsukutta tofu is made from locally soybean produced within a 3km radius from the store. Since
Japanese also have the tradition to give/send presents (e.g. mid-year gift, year-end gift) to family,friends and/or colleagues, gift sets (e.g. Tokigawa set, Organic Set by Shimosato) are also madeavailable. In order words, LTC offers a wide-range of products.
Table 3 shows the top 10 most saleable products in 2014. According to PW, June andFebruary are the peak and low months, respectively. Except for tofu purin (tofu flan), all listed
products are LTC brand. All-year round favorites are okara donuts (donuts made from tofu
leftovers), agebo (fried tofu bar) and renkon ganmo (fried tofu with lotus root). The top 10 mostsaleable products accounted for 42% and 40% of the total sale in June and February, respectively.
Table 3 Top 10 Most Saleable Products of LTC by Peak and Low Months, 20141)
Rank

Peak Month(June)

12345678
910

Okara Donuts (5-pc. pack)Agebo (1 pack)Renkon Ganmo (1 pack)
Tokigawa Tokyo Kata
Kyo Nigari Shimosato
Shiro Zaru Tofu
Nagoshi Tofu
Teage Aburaage (1 pack)
Kurogoma Tofu
Tofu Purin2)

Low Month(February)
Okara Donuts (5-pc. pack)Agebo (1 pack)
Tokigawa Tokyo Kata
Onsen Yu Tofu
Renkon Ganmo (1 pack)
Teage Aburaage (1 pack)
Kyo Nigari Shimosato
Fuwafuwa Atsuage (3 pcs)
Shiro Zaru Tofu
Fuwafuwa Namaage (3 pcs)

Source: Key-Informant Interview, December 2015.
1) LTC sells about 100 products every day, of which LTC brand accounts for about 30-50 products.
2) Among the top 10 most saleable products for both months, all products are own brand products except for tofu
purin.
3) Top 10 most saleable products accounted for 42% and 40% of the total sale in June and February, respectively.

Innovative selling strategies: A men ioned ea lie , LTC elling me hod ha con in o l andproactively evolved from peddling (1955) to wholesale selling in to local food stores (1965) toretail selling in at supermarkets (1979) to direct store selling (1997-present), in response to thechanging business environment. Moreover, it also organizes events (e.g. monthly Tofu Marche, instore tofu tasting) as part of their promotion activities. The tofu processing area is also madeavailable to customers who can view through in-store glass windows. In this way, not only thetransparency of tofu making can be achieved, but also the connectedness between employees (whodirectly make the tofu) and customers can be spontaneously created. As a result of these initiatives,Ⓒ ISERD

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LTC has about 400 customers in weekdays and 800 customers in weekends during summer season,
while 300 customers in weekdays and 600 customers in weekends from October to March.
However, PW emphasized that the store has reached its peak in terms of sale and customer
reach. Therefore, LTC has started its mobile store in 2012, which has further expanded its potential
market (e.g. aging population and/or those who do not have cars to directly buy in the store).
Currently, there are 3 mobile stores that offer freshly-made soybean products to customers innearby Hatoyama Town, Ranzan Town, Higashi Matsuyama City and Sakado City following aweekly schedule.
CONCLUSIONCompany visits and key informant interviews revealed that the local tofu LTC conducted (1)product development in accordance with season, farming community and consumer demand, (2)introduction of TEIKEI for soybean farmers, and (3) implementation of innovative selling activities
to name a few. Moreover, these initiatives further paved way for sustainable rural development. For
further study, there is a need to determine the development of its partnership with and its respective
impact to the local soybean farmers.
NOTES
1) Shimoguchi and Inaizumi (2016) cla ifie he ela ion hip of a fa me and o he pon aneoo ganicpeers (e.g. local tofu maker) through organic farming/products. Shimoguchi (2015) explains how two
Philippine provinces in the same island, however, separated by political boundaries, language andenvironmental conditions (e.g. mountain) sign an agreement to establish the Negros Island as theO ganic I land in A ia o a d hei m al andainable g o h and development.
2) Milestad & Darnhofer (2003) explains that resiliency can be achieved by continuously learn and adapt tochanging environment.
3) Shimoguchi et al. (2015) explains that Shimosato Farm offers farm tour six (6) times a year. Each tour
includes two (2) lectures and tour around the farm. One lecture is given by Mr. Kaneko, organic pioneer
and farmer in Ogawa Town, Saitama, and another lecture by his collaborators such as Reform Company
for Community Supported Agriculture (CSA)-related to rice and Tofu Company for soybean.
4) Orito (2014) explains the TEIKEI experience of Shimosato Farm. In addition to stipulating the 10
principles of TEIKEI, JOAA (1978) e plain ha TEIKEI is an idea to create an alternative distribution
system, not depending on the conventional market. Though the forms of "teikei" vary, it is basically adirect distribution system. To carry it out, the producer(s) and the consumer(s) have talks and contact todeepen their mutual understanding: both of them provide labor and capital to support their own delivery
em. The Japane e o ganic ag ic l e mo emen a ed i h hi " eikei"
em. "Teikei" inot only a practical idea but also a dynamic philosophy to make people think of a better way of lifeeither as a producer or as a con me h o gh hei in e ac ion .

ACKNOWLEDGEMENT
This paper is partly funded by a 4-year JSPS projected (2013 April - 2017 Ma ch) en i led S ppo
S em fo R al Inno a ion o a d H man De elopmen and Kno ledge C ea ion i h P of. D .
Hiroki Inaizumi as project leader. Moreover, we wish to extend our sincere appreciation to thelocal tofu company for their support and cooperation.
REFERENCES
Japan Organic Agriculture Association (JOAA). 1978. Teikei of farmer and consumer (http://www.
joaa.net/english/teikei.htm (accesssed on 1 December, 2017).
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