C-W Interview: Seikatsu Club Consumers’ Co-operative Union
An interview with Seikatsu Club co-op delegation from Japan, by Steve Dubb, Research Director of The Democracy Collaborative. Translation by Ryoko Shimizu (Seikatsu Club Consumers Cooperative Union).
- Takayuki Watanabe, Chief Managing Director, Seikatsu Club Consumers’ Cooperative Union
- Kyoko Okamoto, Board Member of the Seikatsu Club Consumers’ Cooperative Union
- Hitomi Igarashi, Board Member, Seikatsu Club Insurance Cooperative Union
- Junji Asou, Executive Director of the Seikatsu Club Insurance Cooperative Union
- Momoko Toda. Seikatsu Club Liaison Committee on GMOs, Board member of the Seikatsu Club Consumers’ Cooperative Ibaraki
- Ryoko Shimizu, Planning Division, Seikatsu Club Consumers Cooperative Union)
- Ichiro Kishi, Deputy General Manager, Grain Section, Feed & Livestock Production Division, Zen-noh (National Federation of Agricultural Cooperative Associations)
- Yosuke Ota, WTO and EPA Office, Agricultural Policy Department, Central Union of Agricultural Cooperative (Ja-Zenchu)
In August 2012, a delegation of the Seikatsu Club Consumers’ Co-operative Union toured co-ops in Cleveland, Ohio; Iowa; and Washington, D.C. (where this interview was conducted). Founded in 1965 as a buying club by 200 housewives in Tokyo, today the Seikatsu (“lifestyle” or “living”) co-ops have over 340,000 members. Members belong to separately incorporated, affiliated cooperatives, located in 21 of Japan’s states or “prefectures.” The network also includes eight associated companies, including a milk factory. Together, network enterprises have an annual turnover of US $1 billion. Member equity is US $452 million (average member share of US $1,300 per member). In 1992, Seikatsu founded its first worker cooperative. Today, over 600 worker co-ops employ over 17,000 people in such businesses as food distribution, food preparation, catering, recycling, childcare and education.
Steve Dubb: How did the Seikatsu Club begin?
Kyoko Okamoto: In 1965, in Setagaya Ward in Tokyo, a group of housewives formed a buying club to be able to collectively purchase milk. In 1968, the Seikatsu Club became a consumers’ cooperative. When we started, we worked in groups that are called han – so those groups started to act as collective buying clubs. At the beginning, their main focus was on reducing the price of goods. By buying in a group, the buying club can have greater purchasing power to reduce the price. Later on, they began to notice that conventional products are contaminated in chemicals, so they started to buy chemical-free products. They also started an initiative to oppose chemically harmful detergents. And regarding milk, the collective purchasing of milk, our members launched a company to produce milk. So now we have a milk company which produces milk.
What inspired the creation of the Seikatsu Club? Any key individuals who led the effort?
Kyoko Okamoto: There was a lady who was named Shizuko Iwane. Initially, the Seikatsu Club was a club exclusively for women. But then soon after that men could also join Seikastsu.
The group of women – those women wanted to have a community that is independently governed by those women at the local level. So that was the start of the Seikatsu Club. There were about 200 women at the beginning.
Could you comment on the role of women in leadership in the cooperative movement in Japan? Is female leadership common in the co-op movement in Japan or is it a contribution of Seikatsu?
Kyoko Okamoto: In the 1970s, many cooperatives in Japan that were run by women disappeared or merged. At that time, there were many small co-ops that were run by women, but many of them disappeared or merged into larger cooperatives. So there are many cooperatives that are led by men instead of women, but I think the Seikatsu Club is a very successful example that is still run by women and very successful.
Could you talk about the process of expansion? Were there key stages in Seikatsu’s development? How did it grow from 200 members to hundreds of thousands?
Momoko Toda: From the beginning, there were very active women in the Seikatsu Club. They were highly educated. They were baby boomers. Many graduated from university, but they stayed at home and they were housewives. They wanted to have a place where they can be very active and play a key role in society. Seikatsu Club played as a stage to be active. From the beginning, the numbers increased very rapidly.
Who is attracted to join Seikatsu Club co-ops? Why do people join?
Kyoko Okamoto: We have challenges to attract more people. We have problems with that. People who join the Seikatsu Club want to eat safe food. In order to get safe food, it helps to have scale. So existing members work to recruit more members to participate in the Seikatsu Club.
Momoko Toda: For example, in the case of milk, women members found a lot of problems with the commercial milk supply. That’s why members wanted to start our own milk factory and company in order to address the problems and issues in the commercial market. In order to have our own product, we have to have more members.
So that is the starting point of the cooperative. Still there are people who join in order to buy safer goods, safer food products.
For the milk factory, did the capital come from the members or were there other sources of financing?
Takayuki Watanabe: Our member cooperatives are in 21 prefectures in Japan. The capital is coming from six member cooperatives: Tokyo, Kanagawa, Osaka, Chiba, Saitama, and Nagano. All have shares in the milk company. Those shares are financed from the members’ equity in each cooperative. These cooperatives have shares in the milk company, but the Seikatsu Consumer Cooperative Union is the purchasing cooperative for all of the Seikatsu Club.
What is the value of the member share investment in that business?
Takayuki Watanabe: There is about $6 million capitalization from all members in the milk company. There are six producer groups. Three organizations out of those six are dairy farmer groups and the other three organizations, two of them are farmers and one is an affiliated company in charge of logistics. That company is called Taiyo Shokuhin Hanbai and it distributes goods nationally.
What persuaded each of you to join Seikatsu? How did each of you become involved individually?
Hitomi Igarashi: It was quite common — it is still common — for Japanese consumers to buy synthetic detergent. It was difficult to find a place to buy natural soap instead of synthetic detergent. So being able to buy natural soap was important to me. More broadly, the most important reason that motivates me to work as a leader of the Seikatsu Club is that I understand that one individual person cannot do much, but if we get together in a group and cooperate we can do a lot of things. We can be stronger together. That is the most important reason to work as a leader. One single person cannot change the world, but if we can work in larger numbers in solidarity, in cooperation, we can change the world, such as for example when we started a milk company. We can’t do that as individuals.
Momoko Toda: First of all, I wanted to get reliable food products for children.
Kyoko Okamoto: The reason I joined was that I wanted to buy good milk and good eggs because I have allergies. So the reason why I became a leader was because I worked on social activities, including networking – which is a political movement in the Seikatsu Club. I got more and more interested in the Seikatsu Club. It became more attractive to me.
Junji Asou: In 1978, I was first hired by the Seikatsu Club Tokyo. I am an employee of the Seikatsu Club. At the same time, I am a board member of the Seikatsu Club. I was a board member of the Seikatsu Club Tokyo and after that I joined the Seikatsu Club Consumer Cooperative Union as a board member as well. I now work as a member of the board of directors of the Seikatsu Club insurance company, which began as a project of the Seikatsu Club Consumer Cooperative.
Takayuki Watanabe: Seikatsu Club Saitama first hired me in 1975. My case is similar to Mr. Asou. I was an employee at the Seikatsu Club Seitama. At the same time I was on the board of directors of Seitama. Six years ago, I began to work at SCCU as one of the board of directors.
Ryoko Shimizu: I am also employed by Seikatsu Club Tokyo. I am now dispatched at Seikatsu Consumer Cooperative Union’s national office to work as full-time staff. I first became interested in Seikatsu because of my interest in consumer issues. A woman who was named Katsuko Nonura came to my university. She made a speech and I got interested in consumer issues. She also taught me to speak English. She was a mentor to me. As a student, I became interested in consumer issues. Someone asked me to join. He was a friend of my mentor. That was the start of my career. I’ve been working at the Seikatsu for 30 years.
Can you discuss the broader cooperative movement in Japan? How does Seikatsu interact with the broader cooperative movement in Japan, which has more than 20 million member-owners?
Junji Asou: There is an umbrella body for consumer co-ops in Japan called the Japanese Consumer Cooperative Union (JCCU). The Seikatsu Club is a member of JCCU. So we sometimes work with other consumer co-ops in Japan under the aegis of the JCCU, depending on the issues. In some areas, we work with other co-ops. But JCCU has its own private brand of their products, which is called “Co-op brand.” We do not sell the Co-op brand. We have our own products.
There is a very big difference between JCCU and Seikatsu Club regarding commitment to the local community and also a big difference in the business management and governance model. JCCU has a business model that is based on competition, so they want to compete with conventional supermarket chains. Many cooperatives that work closely with JCCU tend to merge with other cooperatives to become bigger.
So when you ask us about the cooperative movement, we try to tell you how many cooperatives there are in Japan, but we are not sure of the exact number because many cooperatives get merged. There are fewer and fewer cooperatives in Japan at this moment.
Another important point of distinction regards our commitment to the local community. In order to be more community based, Seikatsu Club has been divided into prefecture [Japanese equivalent of “state”] units and some prefectures are divided into smaller Seikatsu Clubs. And each cooperative has its own legal status at the local level. In the case of Tokyo, there are four local Seikatsu Clubs. And Kanagawa has been divided into five local Seikatsu Clubs. All of them have got their own legal status as cooperatives. Each cooperative is member governed by residents of that locality. The decision-making structure is divided into the local areas, but we supply the same product line to all of our member cooperatives.
Could you talk about the Seikatsu Club’s “han” or branch structure – how does this function?
Junji Asou: Before we introduced delivery service to individual members, the han worked as a basic unit for our activities and businesses. So regarding han, our products were delivered to a group and people in this group would divide those products into the orders of the individual members. By doing that, we can reduce the cost of the delivery, but at the same time, the han – the group – also functions as the base unit in the decision-making process. Each han sends a representative to a branch in its area and the branch sends a representative to the individual co-ops. That used to be the decision-making structure.
What is the decision making structure today?
Junji Asou: The branch structure remains, but you no longer have to be a member of a han. In 1980, we introduced a new system to deliver our products to individual households instead of the han. We now have more individual members than group members.
Momoko Toda: It depends on the prefecture [state]. In Ibaraki, half of the members still belong a han. Nationally roughly 30 percent of our members belong to a han. A majority, 54 percent, are individual members. Han remain a key element for members to share information.
Many supermarkets often stock tens or even hundreds of thousands of items. Famously the Seikatsu Club carries only about 2,000 products (the majority of which are staple foods like milk, rice and vegetables) and only one or two types of each product. Could you talk about why your stores are structured that way?
Junji Asou: There is a background behind this policy. We decided to not have many product lines, but it is also true for us to say that we couldn’t afford to have so many product lines. We only have one line of milk. There are not any other milk products. We don’t work with other milk companies. That is the same for other products. We only have one variety of soya sauce, one variety of ketchup, mayo, or anything. In doing so, we can have closer relations with those food companies from which we buy. With milk, it is our own company, but, even when it is not our own company, we have closer relationships with those food companies and we can have more say, we can influence those companies, and we can tell them what we want because of this close relationship.
In the 1990s, you began to also form a network of worker-owned cooperatives. How did this occur? What are the areas of business where you have had the most success with that approach?
Hitomi Igarashi: In Kanaga prefecture, in 1992, co-op members began a shop. They needed to have workers who’d work there. They did not want to have employees at that shop. They learned from European countries about worker collectives where members are not employed by anyone but are owners of the worker collective, they invest in the workers collective and they are engaged in the management and governance of the cooperative. A workers’ collective was started to run the business of the shop. But now they have businesses in many other areas of services, which include providing for the welfare of the elderly or kids. There are many kinds of activities that worker collectives are doing now.
Can you discuss Seikatsu’s work in the area of genetically modified organisms (GMOs)?
Momoko Toda: In 1997, the Seikatsu Club declared that we would not use any GMO ingredients in our food products, which was just after the Japanese government decided to introduce GMOs at the end of 1996. So since then members of the Seikatsu Club worked hard with producers to eliminate GMO ingredients from our food products. As members of the Seikatsu Club, we learned about GMOs and it is very important to know—members worked very hard to learn what a genetically modified organism is. We also worked to share information about GMOs. And we worked to build public awareness of GMOs and to draw public attention to this issue.
Have there been any public policy achievements that resulted from this effort in Japan?
Hitomi Igarashi: We circulated a petition to ask the government to label GMOs. When GMOs were first introduced to Japan, there was no mandatory labeling. That’s why we circulated a petition and gathered more than one million signatures. After that, the Japanese government introduced a law to have mandatory labeling of GMOs. That law was enacted in 2000.
But that law is not enough. It is not very good. They introduced mandatory labeling – the government introduced a law – but that law is not good enough for consumers because if the altered DNA or protein is not detected in the final product, then there is no mandatory labeling on that product. For example, in the case of soya sauce or edible oil, there is no labeling even though it is from GMOs because in the final product we cannot detect altered DNA. So that is why we don’t believe we have adequate labeling. In relation to that we have a very high threshold for GMO contamination, so even though the product, like corn or canola, is contaminated, if it is less than five percent, then there is no labeling requirement. That is why we don’t think it is enough. Because we think the law is not enough, we are working very hard to change the law and improve the law. We urge the government to do so.
What are your impressions of your tour of the United States? In what ways are co-ops in the United States similar to Japanese co-ops? What are some of the key differences?
Hitomi Igarashi: I can tell you one key difference. The key players in the United States are workers, as far as we have seen. In Japan, the key players are members: consumer-members.
Your tour may be mostly with worker co-ops, but consumer co-ops are the norm in the United States.
Hitomi Igarashi: Even in the case of U.S. food co-ops, which are similar to Japanese consumer co-ops, I felt that in those food co-ops the focus is more on employees at those food co-ops rather than members. The food co-op we visited in Iowa has its own pension program and health care programs for the employees. We thought that even though they are consumer food co-ops, they are working and focusing on the workers. In the case of the Seikatsu Club, the focus is more on the consumer members.
Do you have any other observations regarding your visit to the United States so far?
Hitomi Igarashi: The thing I found familiar is that cooperatives are based on the same principles. We are both based on ICA [International Cooperative Alliance] cooperative principles. So our missions are very similar to each other.
In Japan also, like the United States, there is a widening gap between the rich and the poor. When I went to Cleveland to visit the Evergreen Cooperatives, I saw that cooperatives could work toward closing that economic gap.
As you know, 2012 has been designated by the United Nations as the International Year of the Cooperative. Can you talk a bit about your work in support of the International Year of Cooperatives? What activities are occurring in Japan around this event?
Ryoko Shimizu: This tour is an example of our activities to celebrate the international year of cooperatives. This tour is one of our activities for the year.
Hitomi Igarashi: There is a national committee organized by stakeholders, which is named the Japan National Planning Committee for the International Year of the Cooperative 2012. The Seikatsu is one of the active members on the national committee.
What are activities that Seikatsu is engaged with regarding the International Year of the Cooperative within Japan?
Momoko Toda: Mainstream cooperatives in Japan are more like supermarkets at this moment. The Seikatsu Club identifies itself as a genuine cooperative. We are based on cooperative principles. We are telling our members that it is our unique characteristics that work to make us a true cooperative. That is a part of the activities that we are doing in the International Year of Cooperatives.
Kyoko Okamoto: Regarding this tour, we are going to share information about our trip on the Internet. We also have many publications of our member cooperatives, so we are going to use those publications to disseminate information about our trips, including here and other parts of the world.
Hitomi Igarashi: We will also do two other tours. One is to Australia and one is to Italy and Spain, including visiting the Mondragón cooperatives in Spain. Those are the series of our trips. At home, we also are working to organize symposiums. We have had already one symposium by working with another co-op on green co-ops. We will have another meeting in September and, as the culmination of the year in Kyushu, we will hold an international conference on cooperatives. Speakers will include Paul Hazen [Executive Director of the U.S. Overseas Cooperative Development Council] and Dr. Ian McPherson [former Director of the Centre for Co-operatives and Community-Based Economy at the University of Victoria] from Canada.
Junji Asou: We put the logo of the international year of the cooperative on our cards. And on our website. We use that logo in various publications.
Is there anything else that you would like to add?
Momoko Toda: The most important thing for our members is to know what the products they buy really are. Information disclosure is the most important thing for the members of the Seikatsu Club.
Hitomi Igarashi: The paradigmatic product is milk. The reason why we wanted to start our own milk company is that we wanted to know what milk really is. We wanted to know the cost structure, the distribution structure, and everything else about the way milk was produced. That would be a foundational point of the Seikatsu Club.
In a sense, we don’t care what kind of government policy they have – we do – but we try to keep vocal about the importance of building an alternative society. That’s why we are doing our activities.
Another thing that after coming here I came to know: I came to be more aware of incubator organizations and intermediaries. In order to start an activity or movement, it is important to have an incubator organization to support many groups, which work for various kinds of change. Intermediary or incubator organizations are very important.
For more information on the Seikatsu Club Consumers Cooperative Union, see: http://www.seikatsuclub.coop/english/