Region/Countries: Asia, Japan Industry: Food and Beverage Date: January 2018

Why this is important to Wisconsin businesses: Opportunities about for Wisconsin companies, as long as they keep in mind consumer trends in the market.

With a population of 127 million, Japan is one of the wealthiest and most mature consumer markets in the world. The Japanese market for food is large, mature and quality-focused. Food and beverage sales make up about 10 percent of Japan’s total GDP, amounting to ¥81.6 trillion ($740 billion) in 2015. Food and beverage is the largest category of expenditures for Japanese households, and consumers tend to buy groceries on a daily basis in local stores. Because of this tendency, Japan has a large number of stores to support shoppers’ habits: approximately 18,400 grocery stores and 54,400 convenience stores nationwide. Japan is shifting toward a dual-income, typically very busy lifestyle, with convenience more important than low price.

Eating out is extremely popular in Japan. The country has approximately 620,000 restaurants and bars. The Michelin Guide has given stars to 227 restaurants in the Tokyo area alone, making it the city with the most Michelin stars in the world. Because the market is crowded and competitive, restaurants must have unique marketing to stand out.

In Japan, the package and gift wrapping are seen as part of the product. Any damage to the package will make the product impossible to sell. To avoid such cases and product losses, imported products are often re-packaged locally after import. Benefits of packing locally are lower shipping cost, increased ease of following product labeling regulation, and localized product portions. Japanese consumers prefer to purchase smaller portions rather than bulk, both to keep the food fresh and due to a lack of storage space. Thus, imported goods tend to be sold in smaller quantities, which also helpskeep the retail price competitive.

Japan heavily relies on food imports to satisfy consumer demand. According to statistics of the Ministry of Agriculture, Forestry and Fisheries, Japan’s food self-sufficiency rate was only 39 percent in 2015, whereas other developed countries have much higher self-sufficiency rates. The rising trend in food imports can also be explained by diversification of  consumer eating habits.
Per capita consumption of rice, historically Japan’s staple food, has decreased since reaching a peak in 1962. This trend reflects the increasing globalization of Japanese food culture. Meat and dairy consumption levels have more than quadrupled since the 1960s.  Consumers attempt to maintain their health by selecting more nutritious products. Certifications supporting health claims add value to these products.

According to a recent consumer survey, 65 percent of Japanese consumers almost never buy organic food, with many saying it’s simply too expensive.

High-growth segments include:

  • Chocolate
  • Healthy biscuits and crackers
  • Premium frozen foods
  • Low-carb foods
  • Ready-to-eat meals
  • Non-alcoholic drinks

Opportunities abound for Wisconsin exporters of food and beverage ingredients and products, particularly those in high demand in Japan. Consumers are willing to pay more for premium products, as long as the value and quality meet their price expectations. Studying consumer taste preference and utilizing research could enable companies to charge higher prices. Finding the right Japanese partner(s)—importers and distributors—is the key to entering the market and achieving long-term success.