<p> In Japan, Consumer Cooperatives （Co-op）, particularly the regional Co-ops that supply safe, secure and high-quality food to consumers, play an important role in the development of Japanese food systems. Members of Co-ops participating in the business operations at various levels are also consumers. However, studies on co-op from the viewpoints of both theoretical and empirical economic analyses, especially in corporate governance, are not sufficient.</p><p> Therefore, in this paper, we aim to clarify the role of Co-ops in the development of food system in Japan and their dynamics in quality-enhancing innovation empirically from the view of corporate governance. First, we present a new analytical framework for economic theory considering the service innovation in Co-ops and driving forces based on the synthesis of the theories of industrial organization and corporate governance. Next, we will empirically clarify the factors for development of the Co-ops based on financial data and a survey on the members' consciousness. Finally, we derive policy implications on the roles and tasks of Co-ops in the sustainable development of food system based on the analytical results.</p><p>JEL Classifications:Q10, M10</p>