Strategic Management from the Perspective of Hatcho Miso

There are two miso brewers in Okazaki City, Aichi Prefecture, which have the oldest history in Japan. One is Hatcho Miso Limited Partnership, which runs the brewery Kakukyu and the other is Maruya Haccho Miso Co., Ltd. which operates Maruya. Both companies are long-established shops that have been making a type of miso called hatcho miso since the early modern period. Okazaki City is the home of Okazaki Castle, the birthplace of Shogun Tokugawa Ieyasu.

The area is also located at the intersection of the Old Tokaido Road and Yahagi River, a designated Class A river under the government river classification system. During the Edo period (1603–1867) it was a transportation hub where roads crossed waterways.

The two miso breweries are located in the former village of Hatcho (currently Hatcho Town, Okazaki City), “8-cho (read “hatcho” meaning 8 blocks equivalent to 870 meters)” away from Okazaki Castle, going down the Old Tokaido road to the west. As the area was right by the intersection of the Old Tokaido road and Yahagi River, it enjoyed easy access to transportation during the Edo period. Using its location to its advantage, the brewers started their businesses and shipped hatcho miso all over the country.

After entering the Meiji period (1868-1912), the breweries actively exported their miso overseas. There were hatcho miso fans all over the world during the Edo and Meiji periods, before and after World War II, and the same is true today in the Reiwa era (from 2019).

Fermentation Over Two Summers and Two Winters

The fact that the miso is made in Hatcho village is not the only characteristic that defines hatcho miso. The two breweries have kept their unique traditional brewing methods unchanged since the Edo period. Craftsmen pour 6 tons of soybean “koji” mold into a huge cedar wood barrel which is around 1.8 meters in diameter. Then they pile three tons of large stones into a pyramid shape to let them brew naturally.

The miso goes through a long fermentation process for “two summers and two winters,” or over two years. I am inspired whenever I enter the breweries and take in the spectacular sight of the wooden casks and the stone piles that are taller than humans.

The word hatcho miso represents the traditional culture ingrained in the Hatcho village and is something that only these two brewers have upheld for centuries. It is not merely a simple product name or a brand.

I started the field survey of hatcho miso in the summer of 2004. I chose the oldest miso breweries as the subject of my undergraduate thesis. The theme at that time was the long-term survival of companies and strategic management. I came across a wonderful field as the two hatcho miso houses have good track records of long-term survival.

In the world of strategic management at the time, there was popular thinking called the resource-based view (RBV) which believed that the possession of unique resources promotes differentiation of a company and gives it a sustainable competitive edge. Many academics researching long-established companies followed this theory and argued that the possession of traditional resources that define long-established shops would lead to their long-term survival.

However, for long-established shops that have survived the changes of the times, it is not as simple as to say that merely having access to traditional resources will ensure their survival. What is at the heart is the values created by the people involved through the generations, the history and the culture they carry, and whether they can gain legitimacy as established names and to pass it on to future generations. This is the aesthetics of long-established shops.

In recent years, there has been some noise surrounding a conflict over the brand name “Hatcho Miso.” Two big problems emerged following my fieldwork at Hatcho village.

One occurred after the cabinet of former Prime Minister Junichiro Koizumi introduced a system called “regional brand (regional collective trademark).” Because the two breweries both used the name “hatcho miso” for their products, neither had obtained a registered trademark right. Rather, it would not have been fair if either one had obtained it. For this reason, there were no companies that had trademarked the name.

As the regional brand system was designed to allow regional units such as Hatcho village to apply for a trademark, it seemed like it would function to support the two breweries. The two companies began to work together in partnership with a local chamber of commerce to register the miso as a regional brand.

However, seemingly out of nowhere, an entity called the Aichi Prefectural Miso and Tamari Soy Sauce Industry Cooperative in Nagoya City also applied for a regional brand using the name Hatcho Miso. The patent office rejected both the applications from the two breweries and the prefectural entity citing a lack of consensus.

Brand That Excludes Hatcho Local Brewers

A similar problem arose when the Ministry of Agriculture, Forestry and Fisheries introduced the Geographical Indication (GI) protection system in 2015. This system was created to identify the production area of ​​foods and maintain their quality, as well as to protect Japanese foods that are exported overseas.

Once again, the views of the hatcho miso cooperative association, organized by the two established breweries, and the prefectural cooperative society was divided. Moreover, the Ministry of Agriculture, Forestry and Fisheries is basically planning to accept an application from the prefectural entity, which would allow manufacturers in the prefecture other than the two established breweries to sell products using the name Hatcho Miso and may make it difficult for the two to use the name.

In the first place, soybean miso, also known as red miso, is a traditional food that has been made not only in Aichi Prefecture but also in the prefectures of Gifu and Mie. It is a food culture born from the climate and the environment of the three prefectures surrounding Ise Bay. There are many soybean miso makers in these three prefectures, each of which produces unique soybean miso, making soybean miso a traditional food culture of the Tokai region.

The GI system should function to provide unified protection for the food culture of the region beyond the administrative division of Aichi prefecture. In fact, the nationwide GI system for sake contributed to enhancing the international competitiveness of domestic brewers. It is “soybean miso” that would have fit the original purpose of the GI system.

In any case, the stance of the prefectural union only addresses the issue of superficial use of the name Hatcho Miso as a brand. There may be merit from the perspective of business strategy and marketing, but unfortunately, in my view, they have no aesthetics of established shops that preserve the tradition and culture for generations as the two breweries have.

Aesthetics of long-established shops is a view based on organizational aesthetics, which has become increasingly a subject of European organizational research. The English word “aesthetic” used to be translated into a Japanese word that meant a sense of appreciation for beauty.

The idea is that rather than mere superficial beauty, sensibilities, ways of life, pride, and the weight of culture and other sources of comfort are important to the activities of the people involved in the organization and are actually key pillars of management. It is a view that is diametrically opposite of the concept of achieving superiority over peer companies and fierce competition. My current research focuses on the aesthetics of not only hatcho miso but corporate organizations all over Japan.

(Keita Kato, Associate Professor, Ph.D. in Business Administration at Saitama University.)