Japan’s agricultural sector suffers from a combination of low productivity, high and distortionary levels of agricultural support (which places a burden on Japanese consumers and taxpayers) and a shortage of land suited to farming. These limitations undermine Japan’s farming sector and complicate its participation in bilateral and regional trade agreements that would boost its growth potential. To make matters worse, the Fukushima nuclear incident has made exportation harder and importation more volatile. Find out more about Japan’s food and beverage industry below.
About Food & Beverage
Japan’s agricultural sector suffers from a combination of low productivity, high and distortionary levels of agricultural support (which places a burden on Japanese consumers and taxpayers) and a shortage of land suited to farming. These limitations undermine Japan’s farming sector and complicate its participation in bilateral and regional trade agreements that would boost its growth potential. To make matters worse, the Fukushima nuclear incident has made exportation harder and importation more volatile. Food safety is of great importance to the Japanese, who base their purchases more on food origin, and display special concern towards frozen food, beef, and food from countries that they do not highly trust. The EU however, is a trusted supplier of food to Japan.
Europe is the foremost exporter of liquor and wine worldwide, and the Japanese liquor market is one of the biggest in the world with annual sales estimated at over 6 trillion yen. However, imports of foreign alcohol comprise a mere 6% of the total Japanese liquor market, include beer and beer-like products. The principal reasons for this are that while the Japanese government has reduced taxes on liquor, Japan still has a lot of work to do in terms of applying international standards for product definitions and in eliminating non-tariff barriers to market access.
Alcohol in Japan is influenced by a number of social and economic factors. One factor is the resurgence in popularity of traditional alcohol and another is the fact that Japan is characterised by geographical differences in the type of beverages consumed.
- Fair Competition Regulations
- Ready-to-Drink (RTD) Beverages
- Spirits and Liquors
- Expert report
- Self-regulations in the Alcohol Beverage Industry
- Tariffs and Taxes
- EU Countries PR Campaigns in Japan
- Expert Reports
Japan is both one of the world’s most technologically advanced nations and also a small-scale agricultural producer, making it a major importer of wheat and other cereals. The Japanese grain processing sector, especially its feed sector, was hit hard by the Great East Japan Earthquake of March 2011, but recovery efforts have been highly successful.
Despite weak economic growth, Japan still possesses the largest and most mature confectionary market in the Asia-Pacific region. In particular, demand for sugar confectionary is expected to grow rapidly between 2012-2017, helped by increased competition between pharmaceutical companies – marketing medicated sweets and vitamin-enriched lozenges – as well as ordinary companies selling more traditional Japanese confectionary. However, it is important to realise that Japanese consumers prefer many flavours which would seem exotic or unconventional to Western palates, such as green tea, soy sauce and watermelon. Furthermore Japan has many holidays where it is customary to give special types of confectionary. It is therefore important to familiarise yourself with Japan’s attitudes and appetites if you are to successfully enter the Japanese confectionary market.
Japan’s dairy food sector is expected to go against the otherwise downward consumer spending trend in Japan, with strong growth predicted until at least 2017. The dairy sector is the third largest in Japanese industry and will observe the fifth largest increase in the same period. The Japanese are developing a strong appetite for dairy products such as milk cheese and butter, items which do not feature in traditional Japanese cuisine and diets, making it an ideal sector for European SME investment.
Functional & Health Foods
Japan has one of the largest health food markets in the world, and also has the market with the strictest regulations. In an ageing market, health food is especially important in the minds of consumers and it can therefore be difficult to gain accreditation, or to make certain claims about foods. It may be necessary to partner with an organisation with laboratory facilities in order to meet the requirements, should you wish to make health benefit claims in the Japanese market.
According to trade reports by the Japanese Ministry of Finance, the market condition of imported meat is 46,000t for beef, 61,000t for pork and 45,000t for chicken. While the volume of imported pork is decreasing, beef and chicken are gaining popularity.
Processed & Frozen Foods
The Japanese processed food market has traditionally been regarded as difficult to enter. However a the growing popularity of convenient and economical ready-to-eat meals which has opened up the market to foreign investors is being brought about by a combination of factors: The high-powered and fast-paced lifestyle of the stereotypical Japanese worker, the growing number of “single-person” households as well as the increasing popularity of convenience stores in Japan have all helped to fuel growth in Japan’s processed food market as an alternative to traditional home-cooked meals.
The current mood of optimism in Japan which is a result of the proactive economic policies of Japanese Prime Minister Shinzo Abe is expected to have a positive effect on the soft drinks market in Japan. With predicted compound annual growth rates of 3.5% for the period 2012-17, the future of the Japanese soft drinks industry looks bright.
Reference: EU BUSINESS IN JAPAN