Market Information
Asia Pacific

Packaged Food Sales in Japan

June 2006

June 2006
Source: Euromonitor
Secondary Sources: Trade press (including Nikkei Weekly, Nikkei Marketing Journal, Nikkei Newspaper and Mainichi Newspaper)

Contacts:
Marc Gervais - gervaism@agr.gc.ca
Jim deGraaf - degraafj@agr.gc.ca

Trade Evaluation and Analysis Division
Markets and Trade Team
Agriculture and Agri-Food Canada

This report is designed to show the opportunities in the Japanese packaged food market. It measures market value, offers a summary of trends that affect packaged food sales, and outlines niche company presence. The report also describes the main growth areas, the main players in the market at company level, their brands as well as the market shares they hold.

Market Summary of Trends

The demand for frozen preserved or canned foods has increased in value and there is a growing trend towards microwavable foods, which can be prepared rapidly. The growth in sales for products such as low fat mayonnaise, frozen yoghurt and no-sugar added confectionaries have contributed to the success of packaged foods.

Notes: All dollars are in Canadian dollars, based on Bank of Canada exchange rates June 19, 2006 at an exchange rate of 1 Canadian dollar = 102.65 Japanese yen (using nominal rates). All data for growing products are based on 2004 and 2005 reports. All forecasts are for the 2004 – 2009 period

Niche Market Presence

Biscuits

The top selling biscuit company throughout Japan in 2004 was Ezaki Glico Co Ltd. Their success is related to the top selling chocolate coated biscuits known as Pocky. Market share declined from 9% in 2003 to 8% in 2004. However, the decline of Pocky was caused by the unanticipated warm weather in 2004 that affected all biscuit sales.

Baked Goods

Yamazaki Bakery Co Ltd is the leading company for the production of baked goods. The company increased its market share to 18% in 2004, up from 17% in 2003. Yamazaki Bakery Co Ltd has a well established distribution network throughout Japan supplying baked goods to convenience stores and supermarkets. In 2004, 95% of Yamazaki products were available in Japanese convenience stores.

Dairy

Meiji Dairy Co Ltd is one of the successful dairy producers in Japan. The company supplies a wide range of products such as milk, yoghurt and bio drinking yoghurt. The company has become national in scope, increasing its market share to 15% in 2004 from 14% in 2003. This increase was caused by the introduction of new products in milk and yoghurt. With the growing health trend, Meiji Dairy Co Ltd introduced milk that contains less water, 40% more calcium and 30% protein. In 2005, Meiji Dairy Co Ltd launched a new yoghurt called Tialence, which successfully attracted females with high disposable incomes.

Sauces

QP Corp is the leader in the Japanese market for condiments and sauces. QP Corp has managed to increase sales by moving into healthier choices such as low fat mayonnaise and low fat salad dressings. Low fat mayonnaise is expected to grow in sales to continue the success of the company.

Market Segments

Between 2003 and 2004, many sectors and products in the Japanese packaged food market saw increased sales. While 2004 and 2005 experienced minor sales growth, forecasts predict continued healthy growth between through 2009. The following sub-sectors demonstrate potential.

Bakery

Sales increased from $25.24 billion to $25.50 billion, while the quantity increased from 25.68 million tonnes to 25.71 million tonnes.

Main Products Showing Growth:

• Baked goods sales increased from $20.9 billion to $21.0 billion
• Biscuits sales increased from $3.9 billion to $4.0 billion
• Breakfast cereal sales increased from $4.1 million to $4.3 million

Main Producers and their Japanese Brands:

• Yamazaki Baking Co Ltd held 17.8% of the market with its brands Yamazaki Baking Kashipan, Yamazaki, and Chou Houjun
• Shikishima Baking Co Ltd held 5% of the market with the brand Choujyuku
• Fuji Baking Co Ltd held 3% of the market with its brands Fuji, Honjikomi, and Neo

Forecasts:

Bakery products are forecast to decrease by 0.3% in value. The main products expected to increase in sales are breakfast cereals by 16.2% and biscuits by 3.6% in value.

Confectionery

This sector's sales increased from $8.2 billion to $8.4 billion, while the quantity increased from 343,280 tonnes to 347,020 tonnes.

Main Products Showing Growth:

• Sugar confectionery sales increased from $3.00 billion to $3.02 billion
• Gum confectionery sales increased from $1.98 million to $2.04 million
• Chocolate confectionery sales increased from $3.26 million to $3.32 million

Main Producers and their Japanese Brands:

• Lotte Co Ltd held 22.4% of the market with leading brands such as Xylitol, Lotte, Black Black, Ghana, Crunky, Lotte Almond Chocolate, Green Gum, Lotte Macadamia Chocolate, and Plus X
• Meiji Seika Kaisha Ltd held 12.1% of the market with the brand Meiji
• Morinaga & Co Ltd held 9.5% of the market with some leading brands including Hi-Chew, Koeda, Choco Ball, Hi-Soft, and Carré de Chocolate

Forecasts:

Confectionery sales are forecast to increase by 6.5% in value. Gum confectionery is expected to lead the growth with an increase of 12.6% in sales. Chocolate sales are expected to grow by 6.6% and sugar confection sales increase by 2.4%.

Dairy

This sector's sales increased from $23.2 billion to $23.6 billion. The quantity increased from 61.7 million tonnes to 61.9 million tonnes.

Main Products Showing Growth:

• Flavoured milk drink sales increased from $2.3 billion to $2.4 billion
• Cheese sales increased from $2.4 billion to $2.5 billion
• Soy beverage sales increased from $6.8 million to $8.0 million

Main Producers and their Japanese Brands:

• Meiji Dairies Corp held 14.7% of the market with brands Meiji, Bulgaria, and Tokachi
• Morinaga Milk Industry Co Ltd held 13.8% of the market with brands Morinaga Milk, Morinaga, and Mt Rainier
• Yakult Honsha Co Ltd held 9.1 % of the market with the brand Joie

Forecasts

Dairy products are expected to see an increase in value of 4.6% from 2004 to 2009. Soy beverages are expected to show the highest growth rate with an increase in value of 51.5%. Cream is expected to increase by 29% in sales while cheese, and chilled and shelf stable desserts are expected to grow at 10% each in value respectively.

Ice Cream

Sales increased in value from $5.09 billion to $5.1 billion, a minor increase of 0.21% from the previous year. The quantity decreased from 744.3 million litres to 735.1 million litres.

Main Products Showing Growth:

• Impulse ice cream purchases increased from $4.7 billion to $4.8 billion
• Artisanal ice cream sales increased from $9 million to $10 million

Main Producers and their Brands:

• Häagen-Dazs Japan Inc held 11.0% of the market with the brand Häagen-Dazs
• Ezaki Glico Co Ltd held 10.9% of the market with the brand Glico
• Lotte Co Ltd held 10.3% of the market with the brand Lotte

Forecasts

The ice cream sector is forecast to increase by 2.8%. Impulse ice cream purchases are expected to grow by 3.2% while Artisanal ice cream sales are expected to rise by 3.5%.

Noodles

This sector's sales increased in value from $11.8 billion to $12.0 billion, while the quantity increased from 12.5 million tonnes to 12.6 million tonnes.

Main Products Showing Growth:

• Instant noodle sales increased from $6.7 billion to $6.8 billion
• Frozen noodle sales increased from $1.2 million to $1.3 million
• Snack noodle sales increased from $1.3 million to $1.4 million

Main Producers and their Brands:

• Nissin Food Products Co Ltd held 30.1% of the market with the brand Nissin
• Toyo Suisan Kaisha Ltd held 14.5% of the market with the brand Maruchan
• Sanyo Foods Co Ltd held 8.6% of the market with the brand Sapporo Ichiban

Forecasts

Noodles are expected to increase by 3.4% in value. Frozen noodles are expected to lead the trend by increasing 24.0% in sales. Snack noodle sales are anticipated to increase by 8.8%. Instant noodles are expected to increase by 1.8% in sales.

Pasta

This sector's sales increased from $9.7 million to $9.8 million, an increase of 1.5%. The quantity increased from 161,800 tonnes to 164,300 tonnes.

Main Products Showing Growth:

• Dried pasta sales increased from $8.3 million to $8.4 million
• Chilled/fresh pasta sales increased from $1.4 million to $1.5

Main Producers and their Japanese Brands:

• Nisshin Seifun Group Inc held 30.0% of the market with the brands Mama, Nisshin, Ao No Seido, and De Cecco
• Nippon Flour Mills Co Ltd held 15.2% of the market with the brands Oh My, and Barilla
• Showa Sangyo Co Ltd held 10.0% of the market with the brand Showa

Forecasts

Pasta is forecasted to increase in value by 5.0%. Chilled or fresh pasta is expected to lead with an increase of 4.7% in sales followed by dried pasta with an increase of 4.6% in sales.

Soup

Sales increased from $1.75 million to $1.79 million, for an increase of 1.8%. The quantity increased from 9,270 tonnes to 9,440 tonnes.

Main Products Showing Growth:

• Instant soup sales increased from $1.40 million to $1.43 million
• UHT soup sales increased from $1.2 million to $1.3 million

Main Producers and their Japanese Brands:

• Ajinomoto Co Inc held 26.5% of the market with the brand Knorr
• Nagatanien Co Ltd held 11.8% of the market with the brand Nagatanien
• Pokka Corp held 7.8% of the market with the brand Pokka

Forecasts

Soup is forecasted to increase by 5.9% in value, led by UHT soup increasing by 12.4% in sales. Chilled soups are anticipated to increase by 10% and instant soup is expected to increase by 7.0% in value.

Snack Bars

This sector's sales increased in value from $4.8 million to $4.9 million, an increase of 2.8%. The quantity increased from 1,760 tonnes to 1,790 tonnes.

Main Products Showing Growth:

• Breakfast bars are showing an increase in growth from 2004 to 2005.

Main Producers and their Brands:

• Otsuka Pharmaceutical Co Ltd held 39.0% of the market with the brand Calorie Mate
• Asahi Food & Healthcare Co Ltd held 13.4% of the market with the brands Balance Up, Glanola, and Cereal Bar
• Meiji Seika Kaisha Ltd held 9.5% of the market with the brand Perfect Plus

Forecasts

Breakfast bar sales are forecasted to grow by 22% in value, while sales in 'other snack bars' are expected to increase by 11%.

Meal Replacements

This sector's sales increased from $3.8 billion to 3.9 billion, for an increase of 5.2%. The quantity sold increased from 1,690 tonnes to 1,780 tonnes.

Main Products Showing Growth:

• Meal replacement and slimming products increased slightly from 2004 to 2005 in sales
• Convalescence product sales increased from $1.5 million to $1.6 million

Main Producers and their Japanese Brands:

• Abbott Japan Co Ltd held 25% of the market with the brands Ensure, Enrich, and Glucerna
• Meiji Seika Kaisha Ltd held 14% of the market with the brands Meiji and Perfect Plus
• Global Co held 14% of the market with the brand Slimtop

Forecasts

Meal replacements are expected to increase by 13%, with Convalescence products increasing in sales at 23% followed by Meal replacement slimming products at 7%.