A Study of Japan's Halal Food Supply Chain From an Inbound Perspective (Part 1)

Abstract: the Tokyo Olympics and Paralympics

The Olympics were to be held in 2020. Recently, many Muslims have stayed in Japan while traveling, and more were expected to do so during the Olympics. Therefore, from an inbound perspective, the integrity of Japanese food is important — especially for Muslims, who need safe and reliable food that must comply with their religious faith, that is, halal food. Halal means 'permitted' in Arabic, and the categories of halal food are obtained according to these rules. At present, halal food is not widely supplied to Muslims in Japan. This paper therefore focuses on halal food integrity, investigating it through research on the halal certification system and interviews with 20 Japanese companies dealing in halal food. The aim of the study is to suggest how we can ensure high halal food integrity in Japan. The interviewed companies were classified according to integration-arc theory. The findings show that 17 companies adopted a periphery-facing strategy — moderate integration of suppliers and customers. However, their management strategy depended on halal certification or a Muslim-friendly policy. Companies with a Muslim-friendly policy adopted a strategy of information integration rather than delivery integration. Companies with halal certification adopted both directions of supply-chain integration.

Index terms: integrity arc, halal certification, supply-chain integration.

1. Introduction

Ahead of the 2020 Tokyo Olympics and Paralympics, the number of foreign visitors to Japan could be expected to increase. Indeed, the number of Muslim tourists would increase, and it was necessary to provide them with a safe, reliable food supply. In addition, the ASEAN (Association of Southeast Asian Nations) region has recently shown economic growth and market expansion, and Japanese companies aim to export Japanese food, mainly to Southeast Asia, consistent with the great popularity of Japanese cuisine there. The Muslim population of the ASEAN region is about 40%, and many Muslims have recently stayed in Japan while traveling. Therefore, halal food has become more important for Muslims traveling into Japan.

Halal means 'permitted' in Arabic. We study food produced according to this teaching and define it as halal food. A halal certification system is established to ensure food production meets halal standards. A food supply chain is defined as a series of supply processes, from food production to storage, distribution, processing, sale and consumption. As with non-halal food, the halal food supply chain and its management are also important in Japan.

Tan et al. proposed a framework for the halal food supply chain. They built a conceptual model to study the relationship between supply-chain integration and halal food supply-chain integrity in the Malaysian context. The results show that internal integration and strategy have a positive impact on halal food supply-chain integrity, and that strategic cooperation should be pursued with suppliers who value the quality and safety of halal food raw materials. Ali et al. also studied the impact of external integration on compliance with halal standards, as an example of product integrity in the food industry. Their study extends existing research on food integrity, examining not only the quality and safety of Malaysian halal food but also the food supply chain from production, procurement and distribution. They found a clear impact on customer integration in both product quality and cost, but no clear impact on supplier integration. Intan Marzita Saidon et al. studied the supply-chain integration of Japanese food-service businesses in Malaysia. They proposed a short and concise supply chain regardless of company size; Japanese companies have short, concise supply chains, sourcing raw materials from farms in Malaysia and improving time efficiency.

Most companies do not sign contracts with suppliers, indicating that they build long-term relationships with suppliers based on mutual agreement.

Beyond halal food, the safety and reliability of all supplied food should be improved to meet the needs of all stakeholders worldwide. This is the concept of 'food integrity.' Ali et al. proposed, from a Malaysian perspective, how to improve the halal food integrity of focal companies through supply-chain integration. They applied integration-arc theory to explore halal integrity management and supply-chain relationships. Frohlich and Westbrook proposed two types of supply-chain integration: the forward physical flow of delivery, and the backward coordination of data from customer to supplier. They graphically represented the two types as an 'integration arc.' The direction of the segment shows whether a company leans toward suppliers or customers; the degree of the arc indicates the degree of integration. They also proposed five types of supply-chain integration: inward-facing, periphery-facing, supplier-facing, customer-facing and outward-facing. For the halal food integrity of Malaysian focal companies, Ali et al. provided evidence for four hypotheses on the applicability of halal food supply-chain integration — for example, that focal companies adopting broader supply-chain integration strategies affected the quality of halal food.

Halal food is not widely accepted by Muslims in Japan, although it is safe and reliable for Muslims and can be consumed by other residents and tourists. However, there is little research on halal food and its supply chain in Japan. The aim of this study is to investigate halal food integrity by researching the halal food certification system and interviewing Japanese halal-food companies, and to suggest how to ensure high halal food integrity in Japan.

2. Method

The halal food supply chain depends on Japan's culture and certification system. First, we investigated the current state of halal food in Japan. Second, we conducted a questionnaire survey, completed by 20 companies dealing in halal products plus a halal expert involved in halal food in Japan. These companies include suppliers, manufacturers, retailers and restaurants. Table 1 shows the business categories of these companies. All had made some efforts to supply halal food in Japan.

The questionnaire is based on Ali et al., who investigated the integrity of Malaysian halal food from a supply-chain-integration perspective through in-depth interviews. In this study, we adapted their questions into Japanese, forming a questionnaire of 18 questions. The resulting data were examined from the perspective of integration-arc theory.