Sector Trend Analysis - Vegetable Oils in Japan

May 2017

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Contents

Executive summary

Japan was the eleventh largest vegetable oil products market worldwide in 2016, with US$1.51 billion worth of retail value sales (Euromonitor International, 2017). Between 2012 and 2016, world vegetable oil products market grew at a compound annual growth rate (CAGR) of 8.16%, versus 5.61% for Japan (Euromonitor International, 2017). Subsectors of the Japanese oil market experienced varying levels of growth between 2012 and 2016, with a significant increase in retail sales for olive oil and other oil products, and falling sales for rapeseed and soy oil.

Of the five largest vegetable oil product companies in the world, only Deoleo SA had a significant amount of sales in Japan, with US$29.7 million in sales (Euromonitor International, 2017). The leading vegetable oil products company in Japan is Nisshin Oillio Group Ltd., which controlled 47.2% of the market in 2016. Japanese vegetable oil product manufacturers are heavily dependent on raw material imports from the world: over US$1.2 billion of vegetable oil ingredients including canola seed were imported into Japan in 2015.

The Japanese economy has experienced ups and downs in recent years after rapidly recovering from the international 2008 financial crisis and the 2011 earthquake and tsunami. Through 2020, the Japanese economy is expected to grow at an average rate of 0.9% per year. Factors such as a strong Yen, a declining population and slowing gross domestic product (GDP) growth in China will constrain economic growth in Japan (Euromonitor International, 2016). The upshot of an aging workforce, however, is that unemployment is low among the working-age population, at 3.1% in 2016.

Positioning vegetable oil products in the world

Top 5 vegetable oil companies worldwide in 2016, US$
Company International Sales Sales in Japan
1. Wilmar International Ltd. $6.82 billion no sales
2. Bunge Ltd. $2.37 billion no sales
3. Cargill Inc. $1.71 billion no sales
4. China National Cereals, Oils and Foodstuffs Corporation (COFCO) $1.67 billion no sales
5. Deoleo SA $1.64 billion $29.7 million
6. Other $27.40 billion $268.1 million
7. Private Label $7.25 billion $46.4 million
Source: Euromonitor International, 2017
Top 10 vegetable oil products retail markets worldwide in 2016, US$
Country Retail sales
1. India $15.69 billion
2. China $15.05 billion
3. Brazil $3.95 billion
4. United States $3.47 billion
5. Turkey $2.79 billion
6. Russia $2.17 billion
7. Iran $2.14 billion
8. Italy $2.11 billion
9. Spain $1.99 billion
10. Pakistan $1.55 billion
11. Japan $1.51 billion
Source: Euromonitor International, 2017
Global Trade Tracker, 2017
The vegetable oil products market in Japan in 2015, US$
Indicator Value
Retail sales, 2015 $1.45 billion
Domestic manufacturer shipments (value of goods consumed domestically) $312.47 million
Imports of vegetable oil products from the world, in 2015 (fixed 2016 Exchange Rate) $1.199 billion
Exports of vegetable oil products to the world, in 2015 (fixed 2016 Exchange Rate) $61.47 million
Dependence on imports 82.47%
Source: Euromonitor International, 2017
Global Trade Tracker, 2017

Canada's performance

In 2015, Canada exported over US$2.3 billion worth of vegetable oil products to the world, with 68.7% going to the United States. However, Japan accounted for US$17.8 million of Canada's vegetable oil products in 2015. More specifically, 52% of Canada's main vegetable oil exports to Japan were colza or canola oil at a value of US$9.3 million. Canada is however a larger exporter of canola seeds to Japan.

Vegetable oil products export gap, 2015 (US$ millions)
Imports 2011 2012 2013 2014 2015 2011-15 CAGR %
Japan Imports of Vegetable Oil Products from the World 1437.3 1303.9 1199.5 1215.6 1199.5 −4.42
Japan Imports of Vegetable Oil Products from Canada 58.7 55.8 55.5 61.8 61.5 1.17
Gross Export Gap 1378.6 1248.1 1144.0 1153.8 1138.0 −4.68
Source: Global Trade Tracker, 2017
Harmonized System (HS)
Compound Annual Growth Rate (CAGR)
Note: For the purpose of this report, “vegetable oil products” was defined using the following HS codes: 1507-1515, inclusively.
Top 10 importers of vegetable oil products worldwide 2015, US$
Country Imports US$ billions Top Suppliers & Market Share #1 Top Suppliers & Market Share #2 Top Suppliers & Market Share #3 Canada's Share
India 10.45 Indonesia 35.4% Malaysia 22.9% Argentina 18.9% 0.07%
China 7.06 Indonesia 39.1% Malaysia 23.7% Ukraine 9.0% 6.16%
United States 5.43 Canada 28.6% Indonesia 12.8% Malaysia 12.7% 28.6%
Italy 3.99 Spain 28.6% Indonesia 21.4% Greece 13.8% 0.00%
Netherlands 3.68 Malaysia 21.2% Indonesia 19.4% United Kingdom 2.1% 0.02%
Germany 2.90 Netherlands 25.5% Indonesia 15.6% Italy 10.4% 0.15%
Spain 2.15 Indonesia 27.5% Tunisia 14.6% Portugal 9.7% 0.00%
Turkey 1.67 Russia 47.8% Malaysia 23.1% Ukraine 13.2% 0.00%
Malaysia 1.56 Indonesia 71.6% Argentina 5.7% Thailand 3.1% 1.64%
France 1.55 Spain 24.5% Netherlands 18.6% Italy 11.4% 0.01%
Source: Global Trade Tracker, 2017
Harmonized System (HS)
Note: For the purpose of this report, “vegetable oil products” was defined using the following HS codes: 1507-1515, inclusively

Retail environment

Retail value sales of vegetable oil products have been steadily increasing since 2012, with a compound annual growth rate (CAGR) of 5.6% over the last five years. Through 2021, the market is expected to continue growing at 4.3% CAGR (Euromonitor International, 2017).

A significant portion (41.3%) of edible oils sold in Japan in 2016 were classified as “other” by Euromonitor, a classification that includes coconut, grapeseed, groundnut, sesame and blended oils (Euromonitor International, 2017). While no breakdown of this subsector was available, it represented the fastest-growing subsector of the vegetable oil products market, with 14.4% CAGR from 2012 to 2016. Through 2021, this subsector is expected to increase at a faster rate than vegetable oils in general, with 6.2% CAGR. The largest subsector in 2012 was rapeseed oil, which shrank by −4.4% CAGR through 2016. Further loss of market share is expected through 2021, with CAGR of -0.3% (Euromonitor International, 2017).

Store-based retailing accounted for 90.7% of vegetable oil product sales in 2016, down from 91.7% in 2012. Homeshopping and internet sales both increased over this period, from 6.6% and 1.8% in 2012 to 7.1% and 2.2% in 2016, respectively. Among store-based retailers, grocery retailers and sepecifically supermarkets dominated sales: 72.4% of total sales were from grocery retailers and 60% were from supermakets in 2016. Mixed retailers accounted for 16.1% of total sales in that same year (Euromonitor International, 2017).

Historic retail value sales of vegetable oil products in Japan, in US$ millions and period growth (%), current prices – fixed 2016 exchange rates
Categories 2012 2013 2014 2015 2016 2012-16 CAGR (%)
Edible oils (total) 1,213.3 1,258.4 1,376.7 1,449.6 1,509.3 5.6
Olive oil 264.3 301.1 328.1 351.5 373.2 9.0
Corn oil 63.1 62.7 61.2 60.3 59.6 −1.4
Palm oil 27.3 29.5 30.2 30.7 31.3 3.5
Rapeseed oil 405.5 377.2 365.9 354.2 339.1 −4.4
Soy oil 66.4 63.0 60.4 56.4 53.9 −5.1
Sunflower oil 23.2 23.2 23.3 26.2 28.5 5.3
Other edible oil 363.6 401.7 507.6 570.2 623.7 14.4
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Forecast retail value sales of vegetable oil products in Japan, in US$ millions and period growth (%), current prices – fixed 2016 exchange rates
Categories 2017 2018 2019 2020 2021 2017-21 CAGR (%)
Edible oils (total) 1,592.9 1,668.9 1,743.0 1,814.8 1,883.0 4.3
Olive oil 401.8 428.5 454.3 479.3 503.2 5.8
Corn oil 60.1 60.5 61.0 61.6 62.3 0.9
Palm oil 32.3 33.2 34.0 34.8 35.5 2.3
Rapeseed oil 336.4 334.1 332.7 332.4 333.0 −0.3
Soy oil 52.5 51.4 50.6 49.9 49.5 −1.5
Sunflower oil 30.7 32.6 34.3 35.6 36.7 4.6
Other edible oil 679.0 728.5 776.1 821.1 862.9 6.2
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Historic retail volume in litres (millions) of vegetable oil products in subsectors in Japan
Subsectors 2012 2013 2014 2015 2016 2012-16 CAGR (%)
Edible oils (total) 357.9 351.1 360.3 364.9 370.8 0.9
Olive oil 19.4 21.4 23.0 22.1 23.5 4.9
Corn oil 14.4 14.1 13.7 13.4 13.1 −2.3
Palm oil 17.7 18.8 19.0 19.3 19.6 2.6
Rapeseed oil 186.1 173.2 165.5 163.3 161.5 −3.5
Soy oil 34.3 32.3 30.9 29.8 29.1 −4.0
Sunflower oil 3.0 3.0 3.0 3.3 3.5 3.9
Other edible oil 83.1 88.3 105.3 113.7 120.5 9.7
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Forecast retail volume in litres (millions) of vegetable oil products in subsectors in Japan
Subsectors 2017 2018 2019 2020 2021 2017-21 CAGR (%)
Edible oils (total) 374.9 378.1 380.8 383.1 384.9 0.7
Olive oil 24.7 25.8 26.8 27.8 28.6 3.7
Corn oil 12.9 12.7 12.6 12.5 12.4 −1.0
Palm oil 19.8 20.0 20.2 20.4 20.5 0.9
Rapeseed oil 160.1 158.8 157.7 156.7 155.9 −0.7
Soy oil 28.4 27.8 27.3 26.9 26.5 −1.7
Sunflower oil 3.6 3.7 3.8 3.9 3.9 2.0
Other edible oil 125.4 129.1 132.3 135.0 137.0 2.2
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Top 5 vegetable oil product company shares in Japan – retail value sales % breakdown
Companies 2012 2013 2014 2015 2016
Nisshin Oillio Group Ltd.. 51.3 50.8 51.5 48.8 47.2
Ajinomoto Co. Inc. 22.8 22.9 22.5 20.4 19.3
Kadoya Sesame Mills Inc. 5.5 5.4 5.3 5.0 4.7
Showa Sangyo Co. Ltd. 5.0 4.9 4.6 4.1 4.0
SALOV - Società per Azioni Lucchese Olii e Vini SpA 1.8 2.0 2.2 2.0 2.0
Source: Euromonitor International, 2017
Top 5 olive oil product company shares in Japan – retail value sales % breakdown
Companies 2012 2013 2014 2015 2016
Nisshin Oillio Group Ltd. 42.4 41.6 43.8 42.6 42.5
Ajinomoto Co. Inc. 17.8 16.7 16.7 15.2 15.3
SALOV - Società per Azioni Lucchese Olii e Vini SpA 9.8 9.2 9.2 8.4 8.4
Deoleo SA 9.7 9.4 9.2 8.5 8.3
Mataluni SpA (Gruppo Mataluni) 2.1 2.8 3.3 3.0 3.0
Source: Euromonitor International, 2017

Of the five largest vegetable oil product companies in Japan in 2016, four were domestic players. Together, Nisshin Oillio Group Ltd. and Ajinomoto Co. Inc. controlled 66.5% of the market. Private label vegetable oil products made up only 3.2% of the market in 2016. Worldwide, private label companies sold 9.5% of vegetable oil products in that same year.

Contrary to other vegetable oil subsectors, company shares for retail sales of olive oil products were available from Euromonitor. The top two vegetable oil companies are also the top two olive oil companies, but the next three largest companies are international players. SALOV SpA and Mataluni SpA are Italian, while Deoleo SA is a Spanish company. Private label companies made up only 2.9% of the Japanese olive oil market in 2016, compared to 21.8% worldwide.

Health and wellness products

Over the last five years, about 30% of vegetable oil products sold in Japan have been health and wellness (HW) products. Olive oil products represented 76.1% of the health and wellness category in Japan in 2016, and 92% of olive oil products sold in Japan in that same year were health and wellness products.

The majority of health and wellness olive oil products sold since 2012 were naturally healthy (NH) , and this category experienced the most growth. Organic olive oils grew at a relatively slower rate. Other health and wellness vegetable oil products shrank between 2012 and 2016, mostly due to the reduction of the market share for fortified and functional (FF) health and wellness products. Organic vegetable and seed oil grew over this period, and is forecasted to continue growing through 2021 (Euromonitor International, 2017).

Historic retail value sales of health and wellness vegetable oil products in Japan by category, in US$ millions and period growth (%), current prices – fixed 2016 exchange rates
Categories 2012 2013 2014 2015 2016 2012-16 CAGR (%)
HW edible oils (total) 352.8 392.8 414.5 433.9 451.5 6.36
FF edible oil 103.9 110.1 106.9 104.6 102.0 −0.46
NH edible oils 233.0 266.4 291.1 312.3 332.0 9.26
Organic edible oil 15.8 16.2 16.5 17.1 17.6 2.73
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Health and Wellness (HW)
Naturally Healthy (NH)
Fortified and Functional (FF)
Forecast retail value sales of health and wellness vegetable oil products in Japan by category, in US$ millions and period growth (%), current prices – fixed 2016 exchange rates
Categories 2017 2018 2019 2020 2021 2017-21 CAGR (%)
HW edible oils (total) 477.5 501.5 524.9 548.0 570.2 4.54
FF edible oil 101.3 100.6 100.1 99.8 99.9 −0.35
NH edible oils 357.9 382.0 405.4 428.1 449.7 5.87
Organic edible oil 18.3 18.9 19.5 20.0 20.5 2.88
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Health and Wellness (HW)
Naturally Healthy (NH)
Fortified and Functional (FF)
Historic retail value sales of health and wellness vegetable oil products in Japan by subsector, in US$ millions and period growth (%), current prices – fixed 2016 exchange rates
Categories 2012 2013 2014 2015 2016 2012-16 CAGR (%)
HW olive oil (total) 243.2 277.0 301.9 323.4 343.4 9.01
NH olive oil 233.0 266.4 291.1 312.3 332.0 9.26
Organic olive oil 10.1 10.6 10.8 11.1 11.4 3.07
HW vegetable and seed oil (total) 109.6 115.8 112.6 110.5 108.1 −0.34
FF vegetable and seed oil 103.9 110.1 106.9 104.6 102.0 −0.46
Organic vegetable and seed oil 5.6 5.6 5.7 5.9 6.1 2.16
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Health and Wellness (HW)
Naturally Healthy (NH)
Fortified and Functional (FF)
Forecast retail value sales of health and wellness vegetable oil products in Japan by subsector, in US$ millions and period growth (%), current prices – fixed 2016 exchange rates
Categories 2017 2018 2019 2020 2021 2017-21 CAGR (%)
HW olive oil (total) 369.7 394.3 418.0 441.1 463.0 5.79
NH olive oil 357.9 382.0 405.4 428.1 449.7 5.87
Organic olive oil 11.9 12.3 12.6 13.0 13.3 2.82
HW vegetable and seed oil (total) 107.7 107.2 106.9 106.9 107.2 −0.12
FF vegetable and seed oil 101.3 100.6 100.1 99.8 99.9 −0.35
Organic vegetable and seed oil 6.4 6.6 6.9 7.1 7.3 3.34
Source: Euromonitor International, 2017
Compound Annual Growth Rate (CAGR)
Health and Wellness (HW)
Naturally Healthy (NH)
Fortified and Functional (FF)

New product launch analysis

This section combines all three subsectors and analyses the vegetable oil products category as a whole, based on new product launches from January 2012 to December 2016.

According to Mintel's Global New Products Database, there were 99 new vegetable oil products launched in Japan from January 2012 to December 2016, with an average of 19.8 product launches a year. Of these products, 12 were new products and the rest, representing 87.9% of the total, were a combination of new variation (packaging, formulation, and variety/range extensions) of existing products. In addition, 76 of the total were branded while 23 were private-label products.

Unflavoured oils predominated amongst new products (Mintel, 2017). After olive oil, the second-most popular oil type for new products was rapeseed oil. Combined with the fact that Japanese consumers value low-cholesterol, affordable cooking oils, this presents opportunities for Canadian canola producers to recapture market share.

New product launches of vegetable oil products in Japan, January 2012 to December 2016 (yearly product launches)
Product 2012 2013 2014 2015 2016
Yearly product launches 11 6 29 29 24
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - Top five claims (yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
Low/no/reduced cholesterol 3 2 9 7 5
Economy 2 0 5 5 5
Convenient packaging 0 0 4 5 4
Premium 2 1 2 1 5
Limited edition 2 1 1 3 0
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - Imported status (yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
Imported 0 0 2 7 4
Not imported 0 0 0 4 2
Other 11 6 27 18 18
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - Top packaged types (yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
Bottle 10 3 29 27 24
Flexible stick-pack 0 3 0 0 0
Jar 1 0 0 1 0
Flexible sachet 0 0 0 1 0
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - Launch types (yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
New variety/range extension 2 2 13 12 11
New packaging 5 3 5 11 5
Relaunch 0 1 7 4 6
New product 4 0 4 2 2
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - Top five flavours (including blend) (yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
Unflavoured/plain 7 3 24 23 21
Garlic 0 1 1 1 1
Sesame 0 0 0 2 1
Chili/chilli pepper (Red) 3 0 1 2 0
Basil 0 0 2 0 0
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - *Top five ingredients (yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
Olive oil 1 2 17 12 8
Rapeseed oil 6 2 9 6 3
Sesame Seed oil 3 1 3 6 3
Corn oil 0 1 5 3 3
Vitamin E 3 1 4 3 1
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
*Note: that the totals for ingredient counts will add to more than the total launches as products can use multiple ingredients.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - Top five companies (yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
Nisshin Oilli 2 4 11 8 7
J-Oil Mills 0 1 9 5 7
Aeon 2 0 5 5 5
Nippon Flour Mills 0 0 1 2 4
DHC 1 1 1 2 0
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.
New product launches of vegetable oil products in Japan, January 2012 to December 2016 - Manufacturer type(yearly launch counts)
Product attributes 2012 2013 2014 2015 2016
Branded 7 5 21 24 19
Private label 4 1 8 5 5
Source : Mintel, 2017.
Note: ranking are based on 2012-16 data.
Note: all oil products released in the last five years were shelf-stable.

New vegetable oil product examples

Source: Mintel, Global New Products Database (GNPD), 2017

Conclusion

The Japanese vegetable oil products market is expected to continue to grow over the next five years, primarily in the olive oil and other edible oils subsectors. Canola is expected to continue to lose marketshare, but at a slower rate than over the last five years. Canola remains a major ingredient in Japanese oils, and by emphasizing healthy properties such as low-cholesterol and vitamin fortification, Canadian producers will be able to continue to sell value-added products in Japan. Canadian exporters will likely continue to export canola seed for crushing to Japan for their canola oil product industry.

For the most part, health and wellness vegetable oils in Japan consist of naturally healthy olive oil. However, organic oils from other vegetables are continuing to experience strong growth. This market segment is presently small with regards to the overall health and wellness vegetable oil market, but it is projected to grow faster than organic olive oil through 2021.

The Japanese oil market is import-dependent for raw materials. With the exception of olive oil, domestic brands dominate the Japanese vegetable oil market, but Japan imports significantly more oil products than it exports. Canadian oil and oilseed producers will thus continue to enjoy opportunities to sell their products and raw materials in Japan under Japanese labels.

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Sector Trend Analysis - Vegetable Oils in Japan
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