HI Japan 2017
Five factors that could increase supplement and functional food growth in Japan
Japan has the world's most developed supplement market, with many consumers highly educated about the potential benefits of such products.
Therefore, the market will never witness the kind of double-digit growth seen in the region’s emerging nations.
However, as the industry gathers in Tokyo for the annual HI Japan show, here are five factors that may well help increase that growth figure in the coming years.
1) Greater product innovation in the wake of Food with Function Claims
Introduced in 2015, Japan’s Food With Function Claims (FFC) rules allow manufacturers to make limited health claims without having to go through the more stringent Foods for Specified Health Uses (FOSHU) process.
For FOSHU, the government evaluates the claimed effects and safety, and the Consumer Affairs Agency (CAA) gives approval for the labelling of each food product that satisfies the requirements.
FFC, however, is only a notification system, where manufacturers need to meet six criteria ahead of launch.
Since its introduction, more than 1,000 products have been launched, and this level of new product development is showing no sign of slowing down.
However, to build on its growth potential, more needs to be done to educate consumers about what the rules entail.
A recent survey found that only 16% of consumers, 23% of physicians, and 44% of pharmacists correctly understood the key characteristics of the regulation.
2) Diabetes cases on the rise
While Japan is not experiencing the diabetes epidemic to the same extent as China and some South East Asian nations, recent statistics showed the number of patients hit 10 million for the first time last year.
Japan’s health ministry first started releasing these estimates 20 years ago, when there were 6.9 million diabetics in the country.
From then on, it has been gathering data on diabetics every four to five years, under its annual national health and nutrition survey.
Since 1997, diabetes rates have grown consistently, and between 2012 and 2016, the number of diabetes patients in Japan increased by 500,000.
Today, 8% of the population is diabetic, opening up considerable opportunities for supplement and functional food manufacturers to develop new products to mitigate or help prevent the disease.
3) The ageing population has cash to spend
Currently, about a quarter of Japan’s population is over 64, and this is expected to rise to 38% over the next five decades.
While this will inevitably lead to a population decrease — PM Shinzo Abe has vowed to keep it above 100% — longer lifespans mean more consumers are willing to take preventive health measures earlier in life to ensure a more comfortable old age.
Firms that can tap into this trend should be able to reap rewards, while those already in their later years are contributing to a consumer market worth more than ¥100 trillion (US$80 billion) and is expected to grow at a rate of ¥1 trillion a year, according to analysts at Mintel.
4) Sports nutrition and protein products are booming
The forthcoming Tokyo Olympics and Rugby World Cup are leading to surge in interest for sports nutrition and protein products.
Fonterra’s ingredient arm NZMP recently told us how demand was soaring for its products in the country, in light of the high-profile sporting events.
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 on 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.
5) Beauty still boasts growth potential
Japan has long been regarded as a nutri-cosmetics hotspot, and consumer demand for products that can provide beauty from within is still widespread.
Analysts say they that Japan is expected to be a prominent contributor in terms of revenue in this sector to 2021, followed by China.
In recent years, there has been an explosion of product innovation, especially in the functional beverage space.
For example, in 2015, Suntory launched an "All Free Collagen" non-alcoholic beer, fortified with 2,000mg of collagen.