Jesper Edman is a professor in the Graduate School of International Corporate Strategy at Hitotsubashi University and Christina Ahmadjian is a professor in the Graduate School of Commerce and Management at Hitotsubashi University. The two have been researching entrepreneurship and innovation in Japan, including how it relates to craft beer. Students, get your notepads ready.

How did you two get into this area of research?

C: We were talking about innovation and entrepreneurship, as well as how foreign ideas come into Japan and spread or don’t spread. I was studying the restaurant industry because Japanese restaurants imitate things so well. But the idea of borrowing something and making it very uniquely Japanese was fascinating. You don’t actually see so much of that. We began to consider where this was happening and since we liked drinking beer (laughter), we started to look into that. In the beginning, most Japanese breweries imitated German styles, but because the government and media labeled it “ji-beer” (local beer), breweries tried to use “local” products.

J: The ji-beer industry was interesting in another way because foreigners were overrepresented. There were between 60 and 70 German brewers in Japan in the beginning and they even had an association. But what was their impact on the industry? Would a German brewer, for example, determine the success of a brewery? We discovered that there was no impact when we researched it. Those kinds of details interested us.

What else caught your attention about ji-beer’s origins?

J: Well, the industry collapsed in the beginning. We thought it was going to be research on a failed industry when we first started.

C: “Secrets of Japanese success” had become a motif in the Western world, but here we had thought we had found a contrary example. The more fascinating aspect for us became how the ji-beer industry turned itself around.

J: Yeah, there was a beverage out there called “bilk” that combined beer and local milk! Even Coedo’s sweet potato beer may have been just a gimmick back in the day, but they went on to win all kinds of awards for that beer.

What’s your working definition of ji-beer?

C: We don’t really have one. People came up with the name before there was a real definition. It’s what we call an empty category. So we write about how the industry searched or created a definition for what it is.

J: When you look at other countries, there have been social movements or grassroots movements to provide definitions, like “homebrewing” or “microbrewing.” People recognize its definition and use it. But like Christina said, in Japan there was a name before there was anything else.

How did his happen?

C: We’ve been trying to determine who first used the word “ji-beer.” We know the word was used in the 1980s in a few spots to describe local beer in Germany. Why should you travel there? Because they have local beer. That word was born from “ji-zake” (local sake). When the government announced deregulation of the brewing industry in the early 1990s, the media picked it up and described it as being like “ji-zake.”

J: Once the “ji-beer” name came out, people said, wow, there’s a new category! Many people thought they’d simply use local products. In some places the “ji” was going to be about water, or some agricultural specialty. In other places, the “ji” meant that the local town was rallying around the brewery. That’s where machizukuri (community building) aspects came in. All of this created a problem. You could make bilk, or double-bock or whatever, but the “ji” denoted different things.

Why was that a problem?

C: In Japan, you have to create categories. Research shows us that category is very important for consumers. If you start mixing too much, consumers become confused and walk away.

J: I agree; I think it’s very important to maintain a category and not confuse people. I also think another problem was that there was no minimum quality level. The beer just had to be local, not necessarily good. That created a really negative image among consumers. I think it’s important that breweries maintain a focus on quality first.

Where do you think the shift came in associating “ji-beer” with quality instead of merely locale? There were, after all, a handful of breweries in the beginning making good beer.

C: According to our studies, Asagiri of Coedo Beer was one of the first to consciously make a distinction between “ji-beer” and “craft beer”. You don’t normally see the emergence of a new word like that. It allowed small breweries to rebrand themselves.

J: Yes, Asagiri started using the word “craft” to try to escape the free-for-all definition of “ji-beer” and focus on quality, not tourism. He turned Coedo from a Saitama ji-beer into a national beer, though he maintained some local character. It’s OK, though, to have some holdovers still trying to draw tourism, like Hakone Beer. I don’t think you have to force them to think about becoming national.

Any other significant changes you’ve seen in your research?

C: When we started, people said ji-beer was not good and that it would never take off because such bold beers would not suit the Japanese palate. People were so convinced that beer was not Japanese, but that has completely changed. Such cultural arguments have broken down.

J: Increased consumer access to craft beer has been important, too. That’s been really noticeable for us. It’s even appearing in convenience stores, now. In the beginning you could only go to Popeye and a few other places.

What kind of further changes do you anticipate or think might be good?

C: Entrepreneurs start up a business, but are often removed. Or, they stay on as advisers, but bring in a professional CEO to manage the business. That’s the next step in some Japanese breweries and this will be difficult for them because they are hands-on artisans. Still, professional managers need to come in. You don’t have to give up the artisanal side of your business.

J: On the other hand, many breweries are not brewer owned, and that has its own set of problems. Yet I also think that most of the rest of the people who run breweries are still, to the core, artisans, not business people. In any other business, you generally need the founder to step aside. But there’s not really a market here for successful CEOs. You don’t hear somebody say, I worked for company A and now I’m going to go manage company B. There are very few breweries where somebody from the outside with experience comes in to manage the business. From the brewers’ perspective, they don’t want to let somebody else in. In the end, it’s a lifestyle choice.

What positive signs are you seeing?

C: We used to get asked the same question: Why are you as business professors studying something that’s not serious? You should be contributing to Japan’s growth, not this. Ji-beer doesn’t make any money. And it’s not really a business worth your time; it’s more of a lifestyle. But now it’s a serious topic with other professors and graduate students researching it.

J: This industry continues to show entrepreneurship and innovation. It’s not just imitation; Japanese craft beer has become world class. And there is a lot of risk taking, too. It’s been fascinating to see people emerging as real business leaders. The success in this industry is amazing. It goes against expectation and people are generally young, with a big future ahead of them.

Thanks Jesper and Christina.

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This article was published in Japan Beer Times # () and is among the limited content available online. Order your copy through our online shop or download the digital version from the iTunes store to access the full contents of this issue.