2002 Volume 75 Issue 7 Pages 457-478
The purpose of this paper is to clarify how food processors participate in the internationalization of agricultural product flow using the case of Kagome Co., Ltd.. The points under discussion are: 1) the role of Japanese food processors in the spatial change of agricultural product import regions to Japan; 2) the mechanism of the change in procurement regions by Japanese food processors; and 3) the restructuring of domestic production areas by Japanese food processors with progress in international procurement.
The quantity of tomato raw materials (tomato paste) imported by Japan has expanded rapidly since 1972, in advance of other vegetable products. The spatial distribution of import regions of tomato products to Japan has changed markedly, from a concentrated distribution depending on mainly Taiwan in the 1980s to a dispersed distribution depending on many import regions in the 1990s. Until the mid-1980s, the distribution of import regions was influenced by CIF cost and the historical relation between Kagome and the Taiwan market. But after the 1990s, the dispersion of import regions was influenced by CIF cost and the procurement strategy of Kagome, which controls import of almost 50% of its tomato raw materials.
The mechanism of international procurement by Kagome was examined. Plural procurement alliances with foreign suppliers concluded after the 1980s have had an effect on the dispersion of import regions of tomato products. However, Kagome's evaluation of foreign suppliers is not limited to cost factors. Kagome also emphasizes diversification in tomato raw materials using, risk dispersion in procurement, and year-round procurement. The supplier evaluation system thus takes multiple factors into account. In the latest system, cost factors have only a 40% weight in the total evaluation.
With progress in international procurement, Kagome has restructured its domestic procurement process. The restructuring included two factors : a reduction of processing tomato production and a change in processing tomato varieties. The change in processing tomato varieties was the more important. Kagome needed domestic production areas to grow processing tomatoes for tomato juice, which cannot be replaced by imported tomato raw materials. Therefore Kagome switched to the use of the Kagome varieties for tomato juice. The results of this study indicate the relationship between the development of international procurement and restructuring of domestic procurement.
