Exporter Guide - Osaka ATO - Japan - 12-27-2018
Exporter Guide - Osaka ATO - Japan - 12-27-2018
Exporter Guide - Osaka ATO - Japan - 12-27-2018
Date: 12/27/2018
GAIN Report Number: JA8710
Japan
Exporter Guide
Approved By:
Jeff Zimmerman - Osaka ATO Director
Prepared By:
Chika Motomura - Agricultural Marketing Specialist
Report Highlights:
Japan is the fourth largest export market for U.S. exporters of food and agricultural products.
The total Japanese food and drink market was valued at over $769 billion in 2017. The United
States exported $11.9 billion of agricultural products to Japan in that year. There are
tremendous opportunities for U.S. exporters willing and able to follow the strict Japanese
product regulations and keep up with the latest trends in this market.
Post:
Osaka ATO
Japan Market Overview Fact Sheet Food Processing Industry:
The Japanese food processing industry produced
Japan is a country which relies heavily on food $211 billion in food and beverage products in 2017.
imports -- accounting for over 60% of its caloric The Japanese food processing industry produces a
intake. The United States is the largest foreign wide variety of foods, including traditional Japanese
supplier of food and agricultural products to Japan foods, Western foods, and health-oriented foods for
(22% of the total import market share), and Japan is infants and the elderly. Japanese food producers
the 4th largest market for U.S. agricultural exports focus on maintaining market share with traditional
($11.9 billion in 2017). Japan’s food industries are product lines while developing creative products.
well-developed and innovative; including, retail, food
service, food processing, and distribution. Top Ten Growth Food Products
1) Beef & Beef 6) Food Preps. & Misc. Bev
Population: 126,451,398 (July 2017 est.) Products
GDP: $4.88 trillion (3rd) 2) Fish Products 7) Tree Nuts
GDP/Capita: $38,428 3) Dairy Products 8) Distilled Spirits
4) Pork & Pork 9) Poultry Meat & Prods. (ex.
Products Eggs)
5) Processed 10) Egg & Egg Products
Vegetables
a. Profile of Japan
Japan is an island nation located off the eastern seaboard of the Eurasian continent. The
Japanese archipelago consists of the five main islands of Hokkaido, Honshu, Shikoku, Kyushu,
and Okinawa and over 6,800 smaller isles.
The Japanese population was 126.45 million in 2017. The population is concentrated in the
three major regions; Kanto which is around the capital of Tokyo (population 37.3 million);
Kansai, around Osaka (19.3 million); and Chukyo, around Nagoya (9.4 million).
Japan’s GDP totaled US$4.88 trillion, making it the world’s third largest economy, following
the United States’ and China’s. Tertiary industries (the service sector) represent the mainstay of
the Japanese economy, accounting for 72.7% of total GDP in 2015. Secondary industries
(manufacturing) followed with 26.2% and primary industries (agriculture, fisheries, and forestry)
lagged behind at only 1.1%. As the result, Japan relies for the bulk of its food supply on imports
from other countries.
The food self-sufficiency rate of Japan was 38% in terms of calories and 65% in terms of value
in 2017. The rate has been around 40% (caloric basis) and 65-67% (value basis) in recent years.
(Source: Statistics Bureau, Ministry of Internal Affairs and Communications)
2. Market trends
While traditional menus and tastes still generally guide the average Japanese consumer’s
consumption, Western and other Asian ethnic cuisines are increasingly influencing the market.
Although there is a tendency to prefer domestic products over imports, Japanese consumers also
enjoy products from other countries.
The Japanese market is highly competitive. While Japanese consumers tend to accept higher
prices for quality and convenience, at the same time they also seek value. Consumers have a
number of options to choose from in order to satisfy their food needs; ranging from restaurants,
fast food, convenience stores and a variety of retailers. Major supermarket chains are coping
with this demand by introducing their own private labels, while many restaurant chains are
reducing their prices or differentiating themselves with new menu offerings in order to stay
competitive.
Japanese consumers are, in general, highly health-conscious. The Japanese food and beverage
market continues to focus on functional, healthy and nutritious products. Anything perceived as
providing benefits for health and beauty has a stronger appeal and greater chance of becoming
popular, particularly among women. Healthy food trends from the U.S. also have some
influence, with special diets (e.g. gluten free) and trendy “superfoods” often popular in the
Japanese market as well.
Due to a decrease in the birth rate, the Japanese population is experiencing a gradual decline and
steadily aging. The share of people 65 years old or over in the total population exceeded 26% in
2015. Although there are many concerns about the impact of an aging and decreasing
population on society in general and food demand in particular, overall food demand remains
strong and the market continues to offer great opportunities for individual exporters. Average
Japanese life expectancy is 87.1 years for women and 80.8 years for men, and retirees tend to
have large savings and active life style. The demand for high-quality and high-value food
ingredients and finished products is expected to become stronger in the future.
(Source: Statistics Bureau, Ministry of Internal Affairs and Communications)
The number of foreign visitors to Japan was a record high of 28.7 million in 2017, up 19.3%
from the previous year. The government of Japan has been promoting tourism in order to
increase visitors to Japan. Their spending in Japan amounted to US $39.4 billion, up 17.8%
from 2016, out of which 20.1 % was spent on meals during their stay. With the Olympic Games
in Tokyo scheduled in 2020, the number of visitors to Japan is expected to grow further. A
number of hotels and restaurants are trying to draw these visitors and accommodate their diet
needs and preferences into their menu offering.
(Source: Japan Tourism Agency, Ministry of Land, Transport and Tourism)
c. U.S. Advantages vs. U.S. Challenges in the Japanese Market
The Japanese market offers a number of benefits to U.S. exporters, but it is not without
difficulties.
When you work with Japanese people, please be reminded of the following points:
Be prepared for negotiations which move slowly and require a number of meetings to reach an
agreement.
Expect requests for very detailed information on ingredients, production process and quality
controls, etc.
• Be aware of units used in Japan.
Use metric terms and quote price in CIF (cost, insurance and freight), unless your importer
specifically requests FOB (Free on Board).
The New Year holiday (approximately from December 30 to January 3); Golden Week, a
combination of national holidays (April 29 - May 5); and Obon, a period for respecting ancestors
lasting for a week in mid-August, during which many companies close and people take
vacations.
These ideas may help you consider your product approach in Japan.
Japanese consumers:
U.S. exporters doing business with Japan for the first time may find Japanese food standards and
regulations difficult to deal with. Please refer to the following:
• Refer to USDA’s “Japan Food and Agricultural Import Regulations and Standards
(FAIRS) Country Report.” This document provides information on the general food laws
and the regulations on food additives, pesticides, packaging and containers, labeling, and
other specific standards. It is updated annually and can be found at
http://www.usdajapan.org/reports/
• Refer to Japan Food Sanitation Law. This is one of the basic laws that regulate foods in
Japan in order to ensure food safety and prevent sanitation hazards.
(http://www.jetro.go.jp/en/reports/regulations/)
• Refer to JETRO’s report, “Specifications and Standards for Foods, Food Additives, etc.
under the Food Sanitation Law”. This report summarizes specific technical import
procedures, especially for processed food products.
(http://www.jetro.go.jp/en/reports/regulations/)
b. Import Procedures
• Refer to USDA’s “Japan Food and Agricultural Import Regulations and Standards
(FAIRS) Country Report.” This document provides information on import procedures
and required documents. http://www.usdajapan.org/reports/
• Tariff rates in Japan are calculated on a CIF basis to all imports. Japan tariff rates can be
found here: http://www.customs.go.jp/english/tariff/
Following is summaries of each food sector. Detailed report on each sector can be found at:
http://www.usdajapan.org/reports/
a. Retail Sector
In 2017, the total value of all retail food and beverage sales in Japan was $474.3 billion dollars.
Supermarkets represent the bulk of the retail food market, at 72 percent, but the fast-growing
convenience store sector now represents 14 percent of sales. Ready to eat meals (REM) or take
home food items represent a very strong area of growth, and are key to sales throughout the food
& beverage retail industry to increase revenue. Japanese consumers look for convenience,
quality, and single-serving sizes. Recent trends also include growth of Private Brands (PB),
healthy and functional foods, time-saving foods (i.e. frozen foods), and new retail ideas to meet
new demands. Desserts also have exhibited strong growth in the past few years.
Japan’s hotel, restaurant, and institutional food service industry achieved $295.2 billion in 2017
following six consecutive years of growth. Increases in home-meal replacements (HMR),
inbound tourism, and corporate earnings have contributed to the industry’s success. Competition
is intense and both Japanese consumers and foreign travelers demand high-quality food and
beverages as well as unique eating experiences. The variety of restaurants and menu items
available continues to expand as Japanese consumers are interested in trying new cuisines.
Foods from Europe, Asia, Australia, and the Americas are becoming increasingly popular, partly
due to the large number of Japanese traveling abroad every year.
c. Food processing
The Japanese food processing industry is one of the most advanced and sophisticated in the
world. The Japanese food processing industry manufactured $211.4 billion worth of food and
beverage products in 2017. Much of Japan’s food processing industry relies on imported
ingredients, and the United States is the number one supplier. In addition to the scale of this
industry, technological advances combine with changing demographics and consumer
preferences to create constant product churn and opportunities for new exporters.
V. Agricultural and Food Imports (Please see Appendix I for import data)
Demand for U.S. lean beef and products continues to increase in Japan, mainly through food
service and restaurant channels. This longstanding growth sector can be attributed in part to
Japan’s aging population and single-person households coupled with health conscience
attitudes. U.S. lean beef lends itself to larger portion sizes when compared to traditional very
highly marbled Japanese beef. New and existing restaurant chains that feature U.S. lean beef are
expanding rapidly as overall beef consumption in Japan continues to climb.
U.S. tree nuts have made large in-roads into the convenience health snack sector in Japan.
Peanuts, almonds, pecan, walnuts, among others, in plain, roasted and salted forms can now be
readily found in single-serve snack packaging at convenience stores across Japan. These serve
the large fast-paced health conscience Japanese working population. In addition, candy- and/or
chocolate-coated tree nuts snacks continue increasing both sales and the scope of new product
offerings. Japanese food service is beginning to explore new salad creations, many of which
incorporate tree nuts.
Fish Products
Japan has the highest rate of seafood consumption in the world: Total consumption of seafood
was 5.8 million MT in 2016, and the Japanese seafood imports totaled 2.5 million MT in 2017.
Top imported seafood items are Salmon, Shrimp and Tuna. Black Cod, King Crab and Snow
Crab from Alaska are also popular and imports of Pollock Surimi and Pollock Roe have
exhibited very strong growth; up 24% in 2017 to 130,412 MT.
Processed Vegetables
Japanese consumers are seeking more convenience and easy-to-prepare meals to save time due
partly to an increase in working women and single-person households. A rise in demand for
processed vegetables is notable under this social change. The United States is the second largest
supplier of processed vegetables to Japan with about 20% import market share in volume,
following China. The United States is the major supplier of prepared potatoes, tomato paste,
prepared sweet corn, etc. The demand for processed vegetables is expected to increase further
while the on-going social trends continue.
The U.S. recently gained access to Japan for lamb and lamb products after a 14-year absence
from the market. As a result, safe and delicious U.S. lamb and lamb products are expected to
see growth in the coming year among high-end hotels and restaurants.
Ice cream
Ice cream consumption in Japan has increased steadily over the past years, with sales increasing
at an annual rate of 4%. Industry contacts credit marketing campaigns to promote cold weather
consumption, whereas ice cream was traditionally viewed as a summertime treat. The Japanese
ice cream market is highly competitive with thirteen manufacturers supplying most of the
market, with imports dominated by suppliers from New Zealand, Belgium and the United
States. Annually, May 9th marks the national Ice Cream Day in Japan.
Cheese
The Japanese government utilizes import controls through tariff and quota measures to restrict
foreign dairy product imports in support of the domestic dairy industry. However, cheese is an
exception and can be imported without an import quota license. Domestic cheese consumption
has been expanding year by year, and the imports are also expected to increase along with the
growth of wine consumption. Meanwhile, there are trends among aging population to intake
more animal protein, such as cheese and meats, to be healthier and energetic. This trend is
evidenced through a broader variety of cheeses served at restaurants and even at home. On the
other hand, the cheese producers in Oceania and European countries have established a quality
image in the market along with increased variety and compelling production history. Recent
strong U.S. dollar against Japan yen situation and excessive discount sales done by EU countries
also accelerated their cheese export to Japan. In order to compete with the European and
Oceanian products, a branding program with fancy cheeses, such as Artisan cheese and contest
winner cheeses may attract Japanese up-scale consumers.
Essential Oils
The United States is a leading supplier of essential oils to Japan. Essential oils exported to Japan
for industry application - food, medicine, cosmetics - are regulated under the Food Sanitation
Act or the Pharmaceutical Affairs Act of Japan (JETRO Report). Essential oils destined for
other uses, such as aromatherapy and fragrances, are deemed general merchandise and do not
fall under any specific applicable regulation. For this latter category, Japanese consumers prefer
the citrus family of essential oils (lemon, orange, lime, grapefruit, etc.) being less inclined to
other essential oils; such as, eucalyptus, rosemary, and cinnamon. Essential oils are perceived
as providing benefits for health and beauty, which continues to propel the growth of the product
category.
Select growth category and best high-value prospects import data is shown in the table below.
For additional U.S. agricultural trade data available in customizable reports, please consult the
Global Agricultural Trade System (GATS) here.
2017 U.S.
share of
Yearly Japanese Imports from the United States total
Product Category Unit import
(value) to
Japan
2013 2014 2015 2016 2017 (%)
MT NA NA NA NA NA
Consumer-oriented
US$ 20.3%
Product Total
(mln) 6,742 6,829 5,931 5,988 6,494
MT 216,850 221,739 198,504 230,049 282,001
Beef & Beef
US$ 47.0%
Products
(mln) 1,355 1,507 1,339 1,487 1,859
MT 251,168 285,845 305,490 269,448 314,556
Fish Products US$ 9.9%
(mln) 1,193 1,241 1,292 1,226 1,447
MT 97,462 118,686 101,961 103,716 110,578
Dairy Products US$ 16.0%
(mln) 312 418 295 233 300
MT 376,408 359,674 349,006 366,489 399,378
Processed
US$ 17.5%
Vegetables
(mln) 562 521 514 518 571
MT 46,814 49,382 47,446 47,888 54,462
Tree Nuts US$ 52.3%
(mln) 383 473 507 389 401
MT 294 239 231 169 182
Tea US$ 3.3%
(mln) 6 6 6 6 7
MT 1,897 2,087 1,944 2,105 2,014
Essential Oil US$ 20.8%
(mln) 60 73 71 83 81
Source: Global Trade Atlas (GTA) Official Japanese import statistics
Appendix II. U.S. Cooperator representatives in Japan