Indeed, the consensus at the recent HI Japan show in Tokyo was one of optimism, due to rising consumer awareness, the growing needs of an ageing society and the introduction of new regulations that have expanded the opportunities for on-pack marketing.
According to Smooth Link president Hisaaki Kato, the former executive vice president of DSM Japan, the overall market is in a strong position, growing 3% between 2014-2015 to JPY1,922bn.
However, he acknowledged it wasn’t also easy for companies from outside of Japan to enter the market, so he provided a snapshot of the key health, lifestyle and consumer trends that every business needs to be aware of.
“These market drivers…are valid to understand the general context of the health and functional foods sector…they affect the trends in ingredients, products and health claims,” he said.
1) Japan is an ageing society, with fewer children and a declining birth rate. The population’s ageing members will support the demand for more healthy foods and functional products.
2) This is leading to an increase in single-person and elderly households, creating many more occasions when people eat or snack alone. This means there is a greater need for the personalisation and individualization of products.
3) There is a growing need for convenience, and ready-to-eat products, which have functional benefits, especially as the number of working women continues to increase.
4) Food safety and food security is a growing area of concern for Japanese consumers, both on a domestic level around nuclear radiation, and internationally because of tainted food scandals.
5) The Japanese diet continues to diversify. People are increasingly willing to try new and innovative products, especially if they have functional potential.
6) On an economic level, businesses need to be aware of a lingering decline in consumer sentiment due to the country’s consumption tax hike in 2014 (from five to eight per cent].
7) The increasing reliance on mass retail stores and a burgeoning private label sector means products without clear health benefits can struggle to charge a premium.
8) This is leading to many manufacturers to focus on NPD, but few of these products have long staying power.
9) The deflationary economic environment is increasingly seeking manufacturers to consider lower ingredient and processing costs to remain competitive. This could well provide a growing number of opportunities in emerging Asian countries.
10) The changing regulatory landscape in Japan is providing new opportunities. The more relaxed Food with Functions Claims rules, introduced last year, are less stringent and increase the marketing potential for foods with health benefits.
Kato said all of these factors needed to be taken into consideration when seeking to enter or expand in the Japanese market, and stressed that it was imperative to thoroughly prepare all the health-related information and scientific data to make products and ingredients more attractive to buyers.