Advantages and challenges
Although Seikatsu was originally intended to address the problem of food safety, the benefits of consumer coop relative to conventional supermarkets is much greater. Consumer coops are more financially viable because they reduce a large amount of waste. As a result, the price offered by Seikatsu is cheaper than a supermarket most of the time.
- Because Seikatsu has an assured market, it does not have to attract consumers at the retail stage, so it does not waste money on advertisement. Neither does it need ten brands for the same product. One suffices.
- Seikatsu offers an assured consumer market of 300,000 consumers. The bulk buying power minimizes the need for sorting and packaging.
- The pre-order system allows the Seikatsu to accurately predict the flow of goods and cash. As compared to big supermarkets that have to keep a big inventory and the storage infrastructure and the staff associated with it, Seikatsu has little inventory. This not only reduces cost but also ensures more fresh food.
- The pre-payment order system also reduces the risks of price fluctuations for both the producers and the consumers.
- Seikatsu has a solid, long-term relationship with producers. In contrast to supermarkets that easily turned to someone else if the producer does not reduce his price, Seikatsu shares its benefit with producers. By getting rid of the middleman and maintaining a long-term relationship with producers, Seikatsu gets rid of the need for certification.
- Seikatsu distributes it profit among the members, who are both buyers and shareholders. As a result, it is not pressured to achieve a high profit margin. The operating expense of Seikatsu is around 16%, significantly less than the 20-25% profit margin of supermarkets.
Seikatsu Building
Apart from financial benefits, the consumer coop has made contributions to social causes as well. An example is the preservation of local culture. Miso source is a traditional seasoning for soup, but now it is industrially produced, often with preservants. Traditionally-produced miso source only lasts for 2 weeks. Because of its high efficiency of delivery and pre-order system, Seikatsu does not need to worry about deterioration as much as supermarkets. It can guarantee its members traditional miso source throughout the year, while providing a significant market for traditional miso producers.
Miso source
Seikatsu is widely recognized as one of the most successful coops in Japan and in the world in the latter half of the 20th century. With changing social and economic circumstances, Seikatsu is facing significant challenges to continue its success. As the internet becomes an indispensible part of the ordering system, it is becoming increasingly difficult to maintain as close relationships among the members. The pre-payment order system and the annual negotiations for price made price stability possible, but its downside is when the prices offered in supermarkets are lower than Seikatsu in certain weeks, it is difficult to keep members from buying from them. This problem becomes increasingly prominent in the past decade, when the income of the Japanese middle class has not significantly improved. Seikatsu is also having problem involving young people actively in the organization. While there are worries that new members may not understand the original purpose and philosophy of the coop, senior members hope to expand the influence of Seikatsu among the younger generation so that the mission of Seikatsu will be carried on into the future.
Back to Seikatsu Mainpage
Sean Cornelly, ¡°Seikatsu Consumer Coop: Scaling up food system transformation,¡± SERC Research Results, Reports and Papers, http://auspace.athabascau.ca:8080/dspace/bitstream/2149/2822/1/BALTA%20B8%20-%20Seikatsu%20Case%20Study.pdf
Provider: Julie Matthaei
Date created: 16/05/2011
Date modified: 16/05/2011