We have discussed the history of Japanese black tea, the use of manufacturing technology, and the components of tea and their effects on humans. In this chapter, we focus on technological development, technology transfer and learning, and new market development. Technological development caused new market development, and technology transfer connected them.
The technological development of Japanese black tea refers to progress made regarding breed improvement, manufacturing, component analysis, and the analysis of its effect on human health.
Among these factors, the main reasons for the revival and spread of Japanese black tea are production and manufacturing innovation. In terms of manufacturing, various studies have focused on the development of tea manufacturing machines and other equipment in the 1950s. However, the Japanese black tea industry declined after the liberalization of foreign tea imports, and modern farmers did not have the expertise necessary for black tea manufacturing. Under such circumstances, manufacturing technology for fermentation should have been gradually established by entrepreneurial farmers who learned about various elements such as climate, varieties, and fermentation methods that differ from other countries.
The production of black tea includes four processes: withering, rolling, fermenting, and drying. Particularly, fermentation is a high-skilled process. For example, if the humidity is low, the surface of the tea leaves dries because of the fermentation heat and the tea leaves retain their grassy smell. If the fermentation process is not consistent, some tea leaves will decay due to excessive fermentation. To carry out fermentation in a moderate state, it is extremely important to develop technical knowledge regarding the interaction of tea with humidity and temperature as well as the process of fermentation.
Technology transfer and learning
As seen in the case, there were opportunities that farmers could learn modern tea production technologies from researchers and leading farmers within the country and overseas. This has had a great impact to improve the quality of Japanese black tea as a whole.
When the Japanese black tea market launched, a number of new entrants increased and some of the production in the early stages was of low quality. Under such circumstances, the spread of technological knowledge by these leading farmers has improved the level of tea production as a whole, and low-quality products have gradually been eliminated. For the black tea farmers, expansion of the Japanese black tea market would be a big dream with high-quality products.
According to prior studies on exploratory learning (Danneels 2007; Eisenhardt and Martin 2000; Miller et al. 2007), strategies resulting from various trial efforts are likely to be more successful than those designed based on the results of well-analyzed programs. McGrath (2001) argues that omnidirectional exploratory activities are the key to growth from radical innovation.
New market development
There are two major tea markets in Japan, the imported black tea market and the Japanese green tea market. The market for Japanese black tea is intermediate and exists in between the two.
The imported black tea market and the Japanese green tea market have two separate supply chains. Both have standardized harvesting technologies, and both types of tea are manufactured with a standardized high quality. Large trading companies and tea product makers import and manufacture these intermediate commodities and distribute them to retailers. The prices have a wide range, but the median price appears to be low for the respective volume. There are three forms of consumption, leaf tea, instant tea such as tea bags, and beverages sold in cans or plastic bottles. Modern lifestyles have changed the main consumption from leaf tea to beverages.
As mentioned above, the quality of Japanese black tea has been rapidly improved by farmers who developed technological innovation and transferred it to others, which has also expanded the market. This expanding market needs a robust supply chain. The most significant difference in the market of Japanese black tea and that of imported black tea or Japanese green tea is the existence of an intermediary in the distribution system. Some Japanese black tea is traded by intermediaries, but mostly, farmers needed to construct a system to either sell this tea directly to small retailers and blenders or sell it by using the Internet as the sales channel. Therefore, generally, leaf tea should be sold at a higher price.
One of the principal characteristics of direct selling is that the farmers have control over packing, packaging, and pricing of the tea, which increases farmers’ costs but also gives them more options for managing their enterprise. These circumstances increase the challenges of farmers and also increase the quality of tea. Another remarkable characteristic of direct selling is the open channel of communication among farmers and consumers. There is no such communication system in the Japanese green tea market. However, farmers who make Japanese black tea use the feedback from consumers as a driver for the next innovation.