A growing market sector.
Although some aspects of Japan’s economy have come under pressure the food and beverage sector has bucked any negative trends. Over the next five years revenue for the food and beverage market in Japan is expected to grow by an average of 7.1% each year.
In ready meals, the retail value of the market rose 2% in 2018, while the market volume rose by 1%. Assuming 2018 prices, these value and volume increases are projected to continue over the next 5 years, with the sector forecast to be worth JPY 2.3 trillion by 2023.
The importance of imports. Japan is a geographically small country with a large population, and the world’s third largest economy. Although the Japanese economy is export driven, their food security is dependent on imports, with over 60% of food imported.
A sector open to competition. The ready meals sector in Japan is diverse with no one company locking the market down. The four leading players collectively hold less than 25% of market share.
Favourable demographic changes. Japan has a distinct population demographic – by 2050, over 40% of Japanese people are predicted to be over 65 years of age. Older consumers are looking for quality products with high ease of use. Add in a working environment with long hours, increasing female participation in the workforce, and a technology conscious culture, and the market is ripe for products that deliver quality nutrition without the hassle of preparation.
These consumer demands are reflected in the detail of the sector growth. While the biggest selling products are chilled ready meals, with a market worth over JPY 1.5 trillion, ready prepared vegetables saw the greatest value growth – for bagged salads it was around 6% in 2018.
Favourable retail trends. Online shopping and home delivery are growing trends in the Japanese retail sector. The value of online sales in the food and beverage sector increased by over 57% between 2011 and 2016. The move towards low hassle shopping options mirrors interest in lifestyle convenience and easy to prepare meals.
A perennially popular option for grocery shopping in Japan are the combini or convenience stores.
They are easy to access, have long opening hours, and sell a wide range of products. They are the major retail outlet for ready meals.
What are Japanese consumers looking for? Shoppers in Japan are informed and conscious of issues around health and sustainability. They want quality products and think about food security. Products with indicators that validate the source, authenticity, and quality of the food are viewed favourably.
Price is also important. With recent slowdowns to GDP, Japanese consumers are price conscious, and look for good deals, including opportunities to buy in bulk. Nevertheless, while consumer emphasis is on good quality for a good price, shoppers are also willing to pay to get what they want, and prices in the ready meals sector rose by 1% in 2018.
Summing it all up
Japan is a complex market, but one dependent on food and beverage imports. The sector is seeing healthy growth, bucking other negative economic trends, and demographic factors point to continued action in the ready meals and packaged foods sector.
Should Japan should be on your export radar? Here at Export Connect we’re always happy to help with your questions and ambitions. We’d love to hear from you.