Six Japan food, nutrition and consumer trends set to shape 2017
The show will see exhibitors from across the globe descend on Chiba, greater Tokyo, as they seek to boost their business efforts in this potentially lucrative market.
But before the show gets underway, here’s what industry experts think food and nutrition firms need to know about the state of the Japanese market, and its consumers, today.
1) Babies aren’t booming, but pensioner spending power is
The Japanese population has being declining for years, and there aren’t any signs that this is going to change any time soon.
According to Japan’s National Institution of Population and Social Security Research, by 2040, 36% of Japan’s population will be 65 or older, compared with 23% in 2010. Japan’s senior consumer market is worth more than JPY100 trillion (US$800 billion) and is expected to grow at a rate of 1 trillion Yen a year, according to analysts at Mintel.
This means that sales of baby food and related products continue to be negatively affected, while packaged food products targetting senior citizens continued to see growth.
According to market analysts at Euromonitor, this is also true of products offering functional and health benefits, particularly those appealing to the older population segments.
“With a growing number of small and single-person households, growth in the number of professional females and consumers’ increasing time constraints, packaged food products offering a high level of convenience, such as ready meals and frozen processed vegetables, saw further notable performances in 2016.”
Mintel added that new players in the soup space were often coming from nutritional ingredient and baby nutrition backgrounds, but were now targetting ageing seniors
2) Consumers increasingly seeking out ‘superfood’ solutions
Spirulina has been rapidly gaining traction in Japan, with its rich protein levels making it popular across the board, as well as among those interested in anti-ageing.
And according to Hisaaki Kato, president at Japan consultancy Smooth Link, two ‘newcomer’ superfoods that are starting to have success are hemp seeds and teff.
The immunity and beauty potential of hemp seeds is making it attractive to a younger market, while teff’s high protein, fibre and iron content means it is becoming popular to control blood sugar and aid weight loss. The fact that is gluten free is an added bonus, he said.
However, around 44% of all sales in the wider health foods segment are still for fatigue recovery, and, remarkably, 52% of the industry’s sales still come through mail order. This leads us nicely on to…
3) Functional foods see a flurry of activity
Japan is the pioneer of functional foods, but getting a product listed as a Food for Specified Health Uses (FOSHU) was time consuming and costly.
That’s why the introduction of Foods with Function claims rules were welcomed by industry (not least because they didn’t require clinical trials).
By the end of last year well over 400 Foods with Function products had been launched, with the most popular products tackling blood sugar management and cholesterol issues.
Emerging health claims for foods in the region being tapped into by manufacturers are concerned with sleep, stress, eye health and joint health.
According to Kato from Smooth Link, the new rules have "had a big impact on marketing strategies and [the sector’s] potential. It is especially providing a new business chance for international players and SMEs.”
4) Economic slowdown doesn’t stifle premium products
Japanese food and nutrition manufacturers are increasingly branching out into niche and premium product spaces as they seek to maximise margins in a sluggish economy.
And all the signs suggest consumers are willing to dig deeper for such items.
According to Euromonitor, Japanese firms are using consumer feedback to update or redevelop premium products for further growth.
“Larger players are promoting premium varieties of long-running brands as well as launching new offerings. The premiumisation trend particularly targeted senior consumers, who are more affluent than their younger counterparts, and also represent a large and growing population base,” added the market research firm.
5) Cheers: Raise a glass to (healthy) drinks opportunities
The healthy drinks market in Japan is vibrant, with consumers seemingly having an insatiable thirst for wellness-boosting beverages.
The top brand in the segment remains Coca-Cola boosted by its sports nutrition products and ready-to-drink green teas. Local outfits Suntory, Ito En and Yakult follow next, with the latter aided by ever-increasing interest in probiotics.
This sector has also benefitted from the aforementioned health claims changes, with many of the early Food with Function products coming via the drinks chillers.
As for firms looking to break into the space, analysts at Allied Market Research suggest organic and functional diary goods offer ample opportunities.
They say the organic dairy market in Japan is forecast to grow by 14.51% to 2022, offering “promising potential for investors and expanding businesses to venture into. The industry’s vibrant competitive landscape is an indication of the dynamic growth of the industry in the next few years.”
6) On your marks: Sports nutrition could break records
The sports nutrition industry in Japan is expected to grow at a consistent rate of 9% annually until 2022.
A large number of market players are also focusing their product development strategies in more plant-based protein powders, with products made from whey protein, casein, pea, rice, and hemp protein gaining a nod of approval from many health-conscious consumers in the country.
More generally, nutrition bars and healthy snack bars are also a rapidly growing segment in Asia market. Consumers are preferring to snack on these nutrition bars because with busy lifestyles, they can be consumed on the go.
At 14.5% CAGR during 2016-2022, this is also one of the fastest growing segments, where new entrants in the market can successfully venture, say analysts at Allied Market Research.