Experiments in New Product Development Utilizing University-Industry and
Cross-Industry Partnership in a Disaster-Affected Area of Japan
Cross-Industry Partnership in a Disaster-Affected Area of Japan
Faculty of Business Administration
Ishinomaki Senshu University
Since the Great East Japan Earthquake, the production ratio of Ishinomaki's food manufacturing industry has remained low, and opening up sales channels has become an urgent mission. Here we look at new product development initiatives in Ishinomaki City that draw on university-industry and cross-industry partnership.
1. Status of industrial recovery in Ishinomaki City, Miyagi Prefecture
Local industry in Ishinomaki City in Miyagi Prefecture suffered catastrophic damage in the Great East Japan Earthquake. Marine product processors clustered around fishing ports and food manufacturers located along the coast in particular experienced both tsunami damage and major land subsidence, forcing them to build the soil back up again before they could turn their attention to repairing production facilities. Food manufacturers in Ishinomaki City, marine product processors included, account for close to 40 percent of the entire manufacturing industry in terms of both number of business premises and payroll size. The restoration and reconstruction of the marine product processing is accordingly a critical issue in terms of maintaining the region's manufacturing structure.
Many food manufacturers affected by the disaster have received a subsidy for the restoration of commonly used facilities that belong to business cooperatives or other associations of SMEs ('SME Group Subsidies'), and have used these to restore their production facilities. However, in many cases, even if they have repaired their production facilities and started manufacturing the company's products again, loss of customers and sales channels has kept production ratios from rising. According to a March 2013 survey undertaken by the Sanriku Industrial Revitalization Network, which we established along with economic associations and financial institutions in Ishinomaki City and Kesennuma City (the Kesennuma Chamber of Commerce and Industry, the Ishinomaki Chamber of Commerce and Industry, Kesennuma Shinkin Bank and Ishinomaki Shinkin Bank), even though more than 90 percent of the respondent companies (n=124) indicated that restoration of production facilities was complete or partly complete, a hefty 85 percent also observed that their production ratio was down. It also emerged that 29.6 percent of companies had a production ratio of less than 50 percent. In terms of sales, 85.3 percent of companies noted that sales had shrunk compared to pre-disaster levels, while 60.5 percent felt that their sales activities were not proceeding satisfactorily.
2. Development of shopping district gourmet foods
Recent years have seen a rapid rise in the manufacturing of marine processed products in Asia, and there is a trend toward these being used under the private brands of major mass retailers. It has also become common for marine products to be carried from production areas offshore to Asian countries for primary processing before being exported to Japan. Given that international competition is likely to become even more intense in the years ahead, Japanese manufacturers who focus exclusively on quantitative advantage could well find themselves embroiled in price competition. With marine resources declining and markets shrinking, our manufacturers instead need to pursue qualitative advantage, working to develop and manufacture products under their own brands.
Since the fall of 2011, my students and I have been working with businesses in the Iinogawa shopping district in the north of Ishinomaki City (formerly Monou-gun's Kahoku-cho) to develop shopping district gourmet food. As the first phase in this project, we developed Ishinomaki Iinogawa saba-dashi (mackerel stock) ramen noodles, positioning the saba-dashi traditionally used in restaurants as part of the region's food culture. Motivations behind the project included cheering up residents in the affected areas, attracting visitors from outside the region, and contributing to the recovery of Ishinomaki as a marine products city. In developing the ramen, the shared concept was to create high added value by making soup from the mackerel heads and backbones discarded by marine product processing companies and topping it with locally-caught mackerel.
Our development work resulted in saba-dashi ramen being supplied to four businesses (five restaurants) in the Iinogawa shopping district. Now, restaurants are offering ramen and dipping noodles with three original toppings-tsumire (fish dumplings), satsuma-age (fried fishcake) and tatsuta-age (a type of fried chicken)-in a salt- or soy-flavored broth. Before the disaster, the bulk of customers at restaurants in the shopping district lived locally, but now visitors too are patronizing these eating establishments, with eating ramen becoming a reason for visiting Ishinomaki.
3. Development of household goods through cross-industry partnership
Subsequently, recognizing the need for different local industries to work together to develop products that take advantage of unique local characteristics, my team put forward a proposal to develop saba-dashi ramen for home use. In addition to local businesses from the Iinogawa shopping district, we solicited the participation of farmers producing wheat in Ishinomaki (the agricultural producers' cooperative corporation Funagata Agri), a noodle-making company (Shimakin Shoten), and a marine product processor (Yamatoku Hiratsuka Marine Products Co., Ltd.), and development began in September 2012. As it happens, Yamatoku Hiratsuka Marine Products and Shimakin Shoten are companies which lost their production facilities as a result of the disaster and used an SME Group Subsidy to repair them.
To develop a soup concentrate, we adopted the same concept as used for restaurant ramen and manufactured the raw material from mackerel waste from Yamatoku Hiratsuka Marine Products. For the noodles, we used Yukichikara, a type of wheat produced by Funagata Agri, to which we added the mackerel bones left after soup production combined with calcinated calcium (granules). We got that idea from the calcinated eggshell calcium traditionally mixed in when making ramen noodles, and were able to halve the amount of chemically-produced lye water as a result. In approaching the development of a product for home use, our development process emphasis was on incorporating market needs into the product, holding tasting parties and test marketing meetings to seek consumers' impressions and views.
As a result of around one year's development work, we completed a product with an extremely high food self-sufficiency ratio-in other words, sourced almost exclusively from Ishinomaki-and began selling it in city supermarkets and roadside rest areas as of 2 September 2013. At around 400 yen for a pack of two, the price is a little high compared to supermarkets and private brands, but in the first three months that the product has been on the market, we have already made and sold four times as much as we expected. Recently, a growing number of businesses have shown an interest in products with a local character and originality, and business talks are in progress not only with major supermarkets and food stores in the Kanto region, but also food suppliers in the Tokyo metropolitan region.
4. University-industry and cross-industry partnership toward local industrial revitalization
The noodles which we developed for home use are also being used by Iinogawa restaurants, with the synergetic effect of increasing the number of visitors to these restaurants since the noodles went on sale. While the need to create schemes for different local industries to work together, as in agriculture-commerce-industry partnerships, has been highlighted in the past, there have been many cases where this partnership has gone no further than supplying and receiving raw materials. In approaching the revitalization of local industry in the years ahead, local businesses should work together strategically and organically, creating business that takes advantage of their respective management resources. Local research institutes and universities too should look beyond forms of support such as local contributions and technical consultation to participate more proactively in projects. It will soon be three years since the disaster. Those of us working at local universities are committed to continuing to work with affected companies on workable solutions and to pursue concrete results.
(original article : Japanese)