Innovation in the Japanese green tea industry, 1970-2020

This paper is a contribution to the debate about the ability of traditional industries to survive in the context of globalization. In Japan, the Westernization of lifestyle since the 1960s, along with the decline of the domestic market since 2000 (Sawai & Yuzawa, 2018), have had a major impact on the survivability of traditional industries. The production and consumption of clothing (kimonos and geta sandals, for example), necessities (Japanese paper, towels), handicrafts (wood/stone sculpture, handwoven rugs), and drinks (sake and tea) were deeply impacted (Hashino, 2018; Sone, 2019). However, instead of being trapped in the long-term decline, the green tea industry was able to transform itself and to gain a new period of growth thanks to a broad range of innovations. Still, how did this industry innovate to pursue its existence in a challenging environment was not fully explored. This paper focuses consequently on the nature of innovations in the Japanese green tea industry since 1970, following an approach of industry history and business history (Kurosawa 2017). Sources for research includes statistics published by Tea Industry Association and the Ministry of Agriculture, Forestry and Fisheries; publications by Nikkei group, the largest business news media in Japan, since 1975 (https://t21.nikkei.co.jp); and company market shares published by Nikkan Keizai Tsushin (1974–2019). Moreover, we use patents and trademarks from Japan patent office (https://www.j-platpat.inpit.go.jp) and global brand database (https://www3.wipo.int/branddb/en/) to estimate the technology and marketing innovations of tea over time quantitatively and then analyze different modes of innovations from firms qualitatively. This research demonstrates the co-existence of three major marketing innovations that propelled the survival of Japanese tea industry: the transformation of green tea from an agricultural commodity to a branded consumer good, the building of luxury tea brands based on user experience and heritage management, and the expansion to overseas niche markets. For each of these models, we provide in-depth analysis based on original documents and interviews with managers.