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Health and wellness series – Pathfinder on functional/fortified food and beverage trends in Japan

April 2020

Executive summary

In 2018, retail sales of the Japanese health and wellness (H&W) food and beverage sector totaled US$46.0 billion. In Japan, functional and fortified (FF) drinks was the 2nd largest H&W category representing US$7.6 billion and FF packaged food was the 3rd largest category at US$2.7 billion for a combined total of US$10.4 billion.

From a 2019 GlobalData consumer survey, 88% of Japanese consumers believe that healthy eating is important towards maintaining their overall well-being. Important health factors that Japanese consumers care about in order of concern include: tiredness/fatigue, dental/oral health, obesity, cholesterol, digestive health, memory loss, diabetes and heart health.

In 2018, FF packaged food contributing to the consumers' general wellbeing with added vitamins was the largest retail consumer benefits segment (70.1%), followed by digestive health products (26.6%) with probiotic, added fiber/prebiotic attributes, and bone and joint health products (2.6%) with added calcium. FF non-alcoholic beverages represented 63.5% of the H&W sector in terms of retail sales over FF packaged food products, consisting of FF general wellbeing and FF energy boosting drinks. Meanwhile, the top food categories were FF bakery and cereals (US$1.6 billion), FF confectionery (US$516.5 million) and FF dairy and soy food (US$557.2 million).

Among the 2,546 new product food launches in Japan between 2015 and 2020 (Jan.), top food brands were Yakult Joie (drinkable yogurt and liquid cultured milk), Meiji Probio Yogurt LG21 (spoonable yogurt), and Nissin Cisco Gorotto (cold cereals). Among the newly launched drink products (1,320), top drink brands were Kagome Yasai Seikatsu 100, Meiji Savas, Asahi Style Balance, and Fanta over the same period.

Health and wellness sector market overview

Definition: Within the health and wellness (H&W)sector the packaged food and beverage categories contain product attribute characteristics such as all natural, source of vitamins and multi-grain (naturally healthy-NH); cholesterol/fat/sugar free and no added sodium/salt or sugar (free from); added calcium/fiber/pre-biotic/Omega-3/vitamins or probiotic and other related attributes (FF); reduced calorie/fat/sugar/sodium or salt (food minus); gluten/lactose free (food intolerance - FI); and lastly organic products.

Overall, the H&W food and beverage sector in Japan reached a retail sales value of US$46.0 billion in 2018, which has increased at a compound annual growth rate (CAGR) of 1.3% between 2015 and 2018. In 2018, a total of 63.5% of the market were from within the H&W non-alcoholic beverages category (US$29.2 billion), with naturally healthy (NH) drink products representing the highest sales value at US$13.4 billion. H&W packaged food products represented the remaining 36.5% market in retail share value, reaching sales of US$16.8 billion, thriving the most from within the NH, free from and FF related food categories.

This report will focus on H&W - FF packaged food and beverage products. In 2018, the FF food products represented US$2.7 billion and FF drink products reached US$7.6 billion. The food category has considerably grown at a CAGR of 8.0% (2015-2018) and is expected to continue to grow at a CAGR of 9.4% (2019-2022). Although, all H&W - FF drinks are expected to slightly decline between 2019-2022 (−0.1%), especially from within the 'free from' and 'food minus' categories, the FF and NH drink categories are expected to slightly grow during this same period.

Retail sales in Japan of health and wellness drink products, historical and forecast US$ millions using 2018 fixed rates
Category 2015 2018 CAGR* % 2015-2018 2019 2022 CAGR* % 2019-2022
Health and wellness drinks by type 28,942.1 29,209.5 0.3 29,016.6 28,964.3 −0.1
Naturally healthy (NH) 12,674.0 13,434.4 2.0 13,554.5 14,070.2 1.3
Functional and fortified (FF) 7,917.8 7,632.9 −1.2 7,672.6 8,065.2 1.7
Food minus 7,134.5 6,917.2 −1.0 6,673.4 6,026.4 −3.3
Free from 1,215.8 1,225.0 0.3 1,116.1 802.5 −10.4

Source: GlobalData Intelligence, 2020

*CAGR: Compound Annual Growth Rate

Retail sales in Japan of health and wellness packaged food products, historical and forecast US$ millions using 2018 fixed rates
Category 2015 2018 CAGR* % 2015-2018 2019 2022 CAGR* % 2019-2022
Health and wellness food by type 15,364.5 16,786.2 3.0 17,583.9 19,596.1 3.7
Naturally healthy (NH) 8,657.4 9,066.9 1.6 9,274.6 9,794.8 1.8
Free from 2,796.3 3,108.3 3.6 3,272.6 3,703.8 4.2
Functional and fortified (FF) 2,160.5 2,720.3 8.0 3,041.9 3,984.4 9.4
Food minus 838.5 905.1 2.6 987.0 1,039.6 1.7
Food intolerance (FI) 799.1 858.2 2.4 878.5 937.9 2.2
Organic 112.7 127.4 4.2 129.32 135.73 1.6

Source: GlobalData Intelligence, 2020

*CAGR: Compound Annual Growth Rate

Breakdown of retail sales in Japan - health and wellness (H&W) packaged food products in 2018 measured in US$ millions, using 2018 fixed rates
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  • Naturally healthy (NH): US$9.1 billion (54.0%)
  • Free from: US$3.1 billion (18.5%)
  • Functional and fortified (FF): US$2.7 billion (16.2%)
  • Food minus: US$905.1 million (5.4%)
  • Food intolerance (FI): US$858.2 million (5.1%)
  • Organic: US$127.4 million (0.8%)

Source: GlobalData Intelligence, 2020

Consumers in Japan on health and wellness food and beverage products

The Japanese population has been declining for years. According to Japan's National Institution of Population and Social Security Research, 36% of Japan's population will be 65+ by 2040, compared with 23% in 2010. In Japan, functional and health benefit product offerings are appealing to the older population, whereby many H&W packaged food and beverage product claims have been particularly targeted towards senior citizens; making the FF consumer market segment alone, over a billion dollar (US$) industry.Footnote 1

The top trends in 2017, still going strong amongst Japanese consumers include the followingFootnote 1:

Functional and fortified packaged food and beverage category

Definitions

Functional and fortified food products
Attributes consist of those products with added nutrients (that is, Omega-3), and added vitamins or proteins that often contain popular product health claims that can benefit the consumer including health management attributes (cardiovascular, diabetic/dietetic, digestive, bone and joint health), weight and shape management attributes (weight management), and general wellbeing attributes (bone and joint health).
Functional and fortified beverage products
Claim to have consumer health benefits such as performance (energy boosting) or added vitamins and include drink types such as carbonates, fruit powders, energy, iced/RTD tea, sports and still drinks, enhanced/packaged water, nectars and squash/syrups.

Market sizes: functional and fortified

FF packaged food and beverage products reached US$10.4 billion, which had healthy growth in all categories from 2015 to 2018, except within the general wellbeing (added vitamins, other FF) drinks category. In 2018, FF drinks held the highest share value over the FF food category, representing 73.7% of retail sales. Despite its historical slower growth, FF general wellbeing drinks performed well with sales of US$4.9 billion, along with FF energy boosting drinks with sales of US$2.8 billion. Overall, FF non-alcoholic beverages are expected to grow at a CAGR of 1.7% from 2019-22, with general wellbeing drinks expected to drive this gain in growth over energy boosting drinks.

In 2018, the FF bakery and cereals sub-category with added calcium, fiber/prebiotic or vitamins reached the highest food sales at US$1.6 billion and is expected to grow at the highest 4-year CAGR of 11.3%. Dairy and soy food with added calcium and fiber/prebiotic or probiotic FF foods had a healthy growth from 2015-18 by a CAGR of 7.5% and is expected to continue to grow at a CAGR of 7.7% during the 2019-22 period. FF confectionery and oils and fats with added Omega-3 have also had steady growth and are expected to continue growing during the same period.

Market sizes in Japan of functional/fortified packaged food and drink products (historical and forecast) by consumer benefits, retail value sales in fixed 2018 prices, US$ millions
Consumer benefits segment (product attribute segment) 2015 2018 CAGR* % 2015-2018 2019 2022 CAGR* % 2019-2022
Subtotal - Functional and fortified packaged food 2,160.5 2,720.3 8.0 3,041.9 3,984.4 9.4
General wellbeing (added vitamins, other functional and fortified) 1,050.0 1,905.9 8.3 2,159.9 2,880.6 10.1
Digestive health (probiotic, added fiber/prebiotic) 588.5 723.4 7.1 775.0 956.0 7.2
Bone and joint health (added calcium) 52.4 71.5 10.9 87.3 127.4 13.4
Oils and fats (added Omega-3) 18.8 19.5 1.3 19.7 20.5 1.2
Subtotal - Functional and fortified non-alcoholic beverages 7,917.8 7,632.9 −1.2 7,672.6 8,065.2 1.7
General wellbeing (added vitamins, other functional and fortified) 5,171.7 4,862.6 −2.0 4,923.3 5,370.2 2.9
Energy boosting (added vitamins) 2,746.1 2,770.3 0.3 2,749.3 2,695.0 −0.7
Total - Functional and fortified packaged food and beverage 10,078.3 10,353.2 0.9 10,714.5 12,049.6 4.0

Source: GlobalData Intelligence, 2020

*CAGR: Compound Annual Growth Rate

Market sizes in Japan of functional/fortified packaged food and drink products (historical and forecast) by sub-sector category, retail value sales in fixed 2018 prices, US$ millions
Sector category (product attribute segment) 2015 2018 CAGR* % 2015-2018 2019 2022 CAGR* % 2019-2022
Subtotal - Functional and fortified packaged food 2,160.5 2,720.3 8.0 3,041.9 3,984.4 9.4
Bakery and cereals (added calcium, fiber/prebiotic or vitamins) 1,244.9 1,627.1 9.3 1,813.0 2,498.4 11.3
Dairy and soy food (added calcium and fiber / prebiotic, probiotic, other functional and fortified) 448.2 557.2 7.5 598.1 747.6 7.7
Confectionery (other functional and fortified) 448.7 516.5 4.8 611.1 717.9 5.5
Oils and fats (added Omega-3) 18.8 19.5 1.3 19.7 20.5 1.2
Subtotal - Functional and fortified non-alcoholic beverages 7,917.8 7,632.9 −1.2 7,672.6 8,065.2 1.7
Drinks (added vitamins) 3,638.7 3,737.3 0.9 3,731.7 3,917.1 1.6
Drinks (other functional and fortified) 4,279.1 3,895.6 −3.1 3,940.9 4,148.1 1.7
Total - Functional and fortified packaged food and beverage 10,078.3 10,353.2 0.9 10,714.5 12,049.6 4.0

Source: GlobalData Intelligence, 2020

*CAGR: Compound Annual Growth Rate

Top company retail shares: functional and fortified

In 2018, leading companies in the FF packaged food category were fairly distributed and included the Otsuka Group at a 12.1% retail share value, Yakult Honsha (11.6%), and the Asahi Group (9.8%). Top leaders within the FF drink category included Suntory Holdings Ltd. (26.2%), followed by Coca-Cola (18.0%), and the Otsuka Group (12.8%) as reported in 2017.

Top company shares for functional fortified packaged food and beverage products in Japan, retail value sales using 2018 fixed prices, US$ millions (historical)
Company name 2015 2016 2017 2018 Market share (%) in 2017
Top functional and fortified packaged food 2,160.5 2,333.3 2,515.2 2,700.8 100.0
Otsuka Group 299.2 309.7 319.5 327.8 12.7
Yakult Honsha 265.3 281.7 298.5 313.9 11.9
Asahi Group 212.3 228.6 246.3 266.0 9.8
Meiji Holdings Co. Ltd. 146.1 158.8 177.4 195.9 7.1
Calbee, Inc. 119.9 139.2 160.4 186.5 6.4
The Kellogg Company 116.4 135.0 155.4 180.6 6.2
Private Label 31.1 34.4 37.9 41.7 1.5
Others 586.9 621.6 659.3 705.5 26.2
Top functional and fortified drinks 7,917.8 7,930.5 7,732.6 N/A 100.0
Suntory Holdings Ltd. 2,160.7 2,110.4 2,022.4 N/A 26.2
Coca-Cola 1,352.2 1,379.6 1,393.8 N/A 18.0
Otsuka Group 997.5 1,020.2 990.4 N/A 12.8
Asahi Group 617.4 627.7 632.4 N/A 8.2
Taisho Pharmaceuticals 594.3 521.1 485.1 N/A 6.3
Kirin Group 470.2 446.9 406.4 N/A 5.3
Others 506.5 603.4 599.0 N/A 7.7

Source: GlobalData Intelligence, 2020

N/A: Not Available

Consumer survey results

Japan is said to be a pioneer in the development of premium functional foods. Major Japanese players and small-to-medium-enterprises (SMEs) are using consumer feedback to increasingly expand into niche 'superfood' solution markets to help to update or redevelop premium products. Larger players are both promoting premium varieties of long-running brands, as well as launching new offerings and are particularly targeting senior consumers (65+) who are more affluent than their younger counterparts.Footnote 1

In a consumer survey, during the 3rd quarter (Q3) of 2019Footnote 2 : 88% of Japanese consumers believed that eating healthily is either 'very' important (40%) or important (48%) towards maintaining their overall

well-being. When asked which factors best describes their attitude towards health, a factor that ranked highest on the list of consumers being 'very concerned' about was stress and anxiety (30%). Other attributes often addressed in FF food and beverage product claims that Japanese consumers are often highly concerned about are the following : tiredness/fatigue (26%), dental/oral health (24%), obesity (19%), cholesterol (18%), digestive health (17%), memory loss (17%), diabetes (14%), heart health (12%). Additionally, between 33% to 49% of all 711 consumers surveyed were in the very least 'concerned' about each of these aforementioned health factors.

It is apparent that further consumer awareness regarding the health benefits of certain ingredients is necessary to further tap into the H&W FF food and beverage market, particularly amongst the younger consumer groups. In this same survey, when asked whether fatty acids (e.g. Omega 3 or 6) had a positive or negative impact on your health, 43% of Japanese consumers responded positively, while 33% remained neutral (no effect) and 16% were not even familiar with this food ingredient. Similar results occurred whereby 29% of Japanese consumers were not familiar with probiotics as an ingredient, while 19% responded that probiotics have a positive effect on health and 39% remained neutral towards this FF health ingredient.

Product launch analysis

According to Mintel, there were approximately 3,866 new food and beverage products launched (including new variety/range extension, packaging, formulation or relaunched) in Japan between January 2015 and January 23rd, 2020. These products contained either functional (antioxidant, functional: bone health, brain and nervous system, cardiovascular, digestive, energy, eye health, immune system, slimming, stress and sleep, weight and muscle gain, high satiety, prebiotic, probiotic) or food plus (added calcium, high/added fiber or protein, stanols/sterols, vitamin/mineral fortified) claims. There were 2,546 functional or food plus-related food products and 1,320 FF drink products launched between this period.

"Functional and fortified" related product launches in Japan, historical by product item count (January 2015 to January 2020)
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2015 2016 2017 2018 2019 2020 (January)
Food (2,546) 336 368 413 667 701 61
Drinks (1,320) 156 188 254 320 370 32

Total item count: 3,866

Source: Mintel, 2020

Among 2,546 new food product launches in Japan 2015-2020 (Jan.), top sub-categories (brands) within the FF food category were drinkable yogurt and liquid cultured milk (Yakult Joie), spoonable yogurt (Meiji Probio Yogurt LG21), cold cereals (Nissin Cisco Gorotto), sweet biscuits/cookies (Asahi Balance Up Cream Genmai Bran) and pastilles, gums, jellies and chews (Kanro Puré Gummy).

New ingredients found within these new Japanese FF food products over the last year included red bell pepper juice, calcium alginate, bitter orange peel, Yuzu extract, bird's nest, mangetout protein, porcini paste and mushroom sauce. Over the last two years [2018-2020 (Jan.)], the fastest growing flavours included berry (+600%), curry (+400%), peach (+300%), cheese (+300%), aloe vera/aloe ferox (+200%), and plum (+200%). Probiotic products (Q4 2019, Q4 2018) were among one of the top trending claims (+300%).

Top brands of 'functional and fortified' food product launches in Japan, displaying number of products for top sub-categories (January 2015 to January 2020)
Top 10 - Functional and fortified sub-category Top brands launched (product item count) Number of products in sub-category
Drinkable yogurt and liquid cultured milk Yakult Joie (39), Nissin York Tokachi Nomu Yogurt (34), Meiji Bulgaria Nomu Yogurt (15), Nissin York Pilkul (14), Yakult (11), Meiji Probio Yogurt LG21/R-1 (20), Yukijirushi Megmilk (10), Natural Lawson (7), Morinaga Bifidus (7) 284
Spoonable yogurt Meiji Probio Yogurt LG21/R-1 (32), Meiji The Greek Yogurt (19), Yukijirushi Megmilk Megumi (14), Glico BifiX (13), Danone Oikos (13), Glico Choshoku BifiX (12), Ohayo Oishiku Kajitsu (12), Topvalu (11), Danone (9), Morinaga Bifidus (5) 260
Cold cereals Nissin Cisco Gorotto (38), Calbee Frugra (37), Kellogg's Coco Kun No (21), Nissin Cisco Ciscorn Big (16), Top Valu (9), DHC (1) 184
Sweet biscuits/cookies Asahi Balance Up Cream Genmai Bran (27), Glico Bisco (16), Glico Sunao (9), Fujiya Anpanman (3), DHC Diet Program (2), Morinaga (2), Natural Lawson (2) 157
Pastilles, gums, jellies and chews Kanro Puré Gummy (27), Bourbon Fettuccine Gummi (26), Kanro Puré Gelée (20), Kanro (2), Asahi (1), UHA Mikakuto (1) 155
Plant-based drinks (dairy alternatives) Glico Almond Koka (29), Kikkoman Tonyu Inryo (18), Natural Lawson (3), Blue Diamond Almond Breeze (11), Yakult (1) 102
Medicated confectionery Kanro (31), UHA Mikakuto e-ma Nodoame (14), Asahi (5), UHA Mikakuto (5), Morinaga (2) 96
Instant noodles DHC Diet Program (1) 86
Snack/cereal/energy bars Asahi Ippon Manzoku Bar (13), Bourbon Slowbar (13), Natori (4), Topvalu (2), DHC Diet Program (1), Seven and i Premium (1), Lotte Sweets Days (1) 78
Fish products Nissui (39), Topvalu (3), Seven and i Premium (2) 63
Total sample size 2,546
Source: Mintel, 2020

Among a sample size of 1,320 new Japanese FF beverage products from 2015-2020 (Jan.), top brands launched within the FF drink category were Kagome Yasia Seikatsu 100 introducing 51 new products, Meiji Savas (36), Asahi Style Balance (26), Fanta (23) and Kao Healthya (22).

Over the last year, FF juice drinks performed the best (+4.6%) while there was a decrease in FF water products (−66.7%), carbonated soft drinks (−52.9%), ready-to-drink (RTDs) at −33.3%, sports and energy drinks (−7.1%), and other beverages (−43.3%). New ingredients found within these FF Japanese drink products over the same period included cashew nut paste, red cabbage juice, yellow carrot juice, vegetable carbon, sunflower lecithin, sugar snap peas, purple potato juice and Naringin.

Over the last two years [2018-2020 (Jan.)], the fastest growing drink flavours included berry (+250%), unflavoured/plain (+133%), orange (+100%), apple (+100%), cabbage/kale (+100%), and cola (+100%). Among the top growing claims (Q4 2019, Q4 2018) were functional - brain and nervous system (+600%), and antioxidant (+400%).

Top brands of "functional and fortified" drink products launched in Japan by product item count (January 2015 to January 2020)
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  • Kagome Yasai Seikatsu 100: 51
  • Meiji Savas: 36
  • Asahi Style Balance: 26
  • Fanta: 23
  • Kao Healthya: 22
  • Asahi Slim Up: 21
  • Kagome: 17
  • "Seven & i Premium": 17
  • Kagome Tomato Juice: 15
  • LB Uruou Kajitsu: 15

Total item count: 1,320

Source: Mintel, 2020

Popular claims associated with new FF food and beverage product launches over the last five-year period were vitamin/mineral fortified, added calcium, no additives/preservatives, high/added fiber,

functional - slimming, low/no/reduced calorie, and functional - energy or digestive.

Over the last year (January 2019 to -January 2020), top growing claims amongst FF food and beverage products were gluten free (+500%), antioxidant (+300%), and functional - brain and nervous system (+300%).

Popular claims for "functional and fortified" related food and beverage product launches in Japan product item count (January 2015 to January 2020)
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  • Vitamin/mineral fortified: 1,917
  • Added calcium: 704
  • No additives/preservatives: 653
  • High/added fiber: 631
  • Functional - slimming: 406
  • Low/no/reduced calorie: 401
  • Functional - energy: 348
  • Functional - digestive: 347

Total item count: 3,866

Source: Mintel, 2020

Product examples

Purple Vegetable & Fruit Juice
Source: Mintel, 2010
Company Tokyo Meiraku
Brand Sujahta Meiraku Murasaki No Kazoku No Uruoi
Sub-category Juice drinks/nectars
Country Japan
Related claims No additives/preservatives, low/no/reduced sodium, vitamin/mineral fortified, antioxidant, no added sugar
Launch type Relaunch
Date published January 2020
Price in US dollars 0.96

This relaunched product now contains more vegetables to make up for vegetable deficiency and provides 62 grams of vegetables, anthocyanin, folic acid, vitamin B6, hyaluronic acid and added vitamin C, which is an antioxidant said to help maintain skin health. This drink is made with 25 vegetables and four fruits, consisting of 31% vegetable juice and 19% fruit juice. It contains new ingredients such as purple potato juice, cabbage juice, red bell pepper juice, and red cabbage juice etc. The product is free from added sugar, added salt and flavourings.

Lactic Acid Drink
Source: Mintel, 2010
Company Yakult Honsha
Brand Yakult 1000
Sub-category Drinking yogurt and liquid cultured milk
Country Japan, direct selling
Related claims Functional – digestive/stress and sleep
Launch type New product
Date published November 2019
Price in US dollars 9.08

This FFC-certified drink is fortified with the highest content of Lactobacillus casei Shirota YIT 9029, containing one billion per millilitre, to relieve stress, help sleep better and improve gut bacteria. The product retails in a 700 millilitre pack with seven 100 millilitre units.

8 Energy Drink
Source: Mintel, 2010
Company Taisho Pharmaceutical
Brand Taisho Seiyaku Lipovitan D
Sub-category Sports and energy drinks
Country Japan
Related claims Functional – other seniors (aged 55+), vitamin/mineral fortified, functional – bone health; brain and nervous system; immune system; energy; skin/nails/hair, maternal
Launch type Relaunch
Date published September 2019
Price in US dollars 2.04

This quasi-drug drink is formulated with eight active ingredients, including taurine, royal jelly and vitamins B1, B2 and B6, and is claimed to: support and improve the immune system and concentration; prevent and reduce fatigue; prevent weakness caused by a weak constitution, caused by old age, such as softened teeth and bones; and prevent weakness caused by vitamin deficiency, such as lack of strength, or feeling of heaviness in the shoulders, neck, back, and knees, as well as skin inflammation or a lack of appetite. It can be used to increase vitamin intake during or after illness, when fever has caused exhaustion, for a loss of appetite, and also for nursing mothers in the pre- and postnatal period.

Strawberry Shortcake Flavoured Cornflakes
Source: Mintel, 2010
Company Nissin Cisco
Brand Nissin Cisco Ciscorn Big
Sub-category Breakfast cold cereals
Country Japan, internet mail order
Related claims No additives/preservatives, added calcium, functional – other, children (5-12), vitamin/ mineral fortified, functional – bone health; energy; skin/nails/hair
Launch type New variety/range extension
Date published January 2020
Price in US dollars 2.77

The crispy cornflakes are a new limited edition variety and are fortified with: vitamin D, to help the body effectively absorb calcium and maintain bones; half the recommended daily amount of iron, to contribute to red blood cell formation; and vitamin B1, to enable the body to use carbohydrates as energy and maintain the skin and mucous membranes. They feature GMO-free corn grits and contain oligosaccharides, 50% of the daily required amount of calcium, and 1/3 of nine vitamins, when served with 200 milliltre milk. Nissin Cisco Ciscorn Big is said to be the best selling cornflake brand.

Maple Syrup Bran Biscuits
Source: Mintel, 2010
Company Asahi Group Foods manufactured by Beigyokudo Shokuhin
Brand Asahi Balance Up Cream Genmai Bran
Sub-category Sweet biscuits/cookies
Country Japan
Related claims Added calcium, vitamin/mineral fortified, wholegrain, functional – bone health
Launch type New variety/range extension
Date published September 2019
Price in US dollars 1.48

The crunchy sandwich biscuits feature brown rice and wheat bran, and have a sweet cream filling with carefully selected Quebec maple syrup. They contain 1/3 of the daily recommended intake of dietary fibre, as well as 10 vitamins, added calcium for building bones and teeth, and are fortified with iron for contributing to red blood cell formation.

Opportunities for Canada

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) gives Canadian agriculture and agri-food products preferential market access to key export markets, including Japan. Under the agreement, tariffs will be eliminated or reduced on a wide range of Canadian exports for the agricultural sector, including meat, grains, pulses, maple syrup, wines and spirits, seafood, and other processed food products.

Japan has eliminated tariffs on close to 32% of tariff lines on agriculture and agri-food products upon entry into force on December 30th, 2018. A further 9% of tariff lines will provide preferential tariff treatment through permanent quotas and country-specific quotas for Canada. The remaining tariff lines will provide tariff elimination or reductions over a period of up to 20 years, or reductions of the in-quota or out-of-quota tariffs. Read the Global Affairs Canada overview of the CPTPP and Canada's agriculture and agri-food sector for more information.

One of the first steps before entering the market is to determine whether or not a product is authorized for sale in Japan. There could be restrictions due to phytosanitary or food safety related concerns that can prevent a product from being imported. Products must meet Japanese regulations for food ingredients, especially with regard to food additives.

Exporters are strongly recommended to work with a local import agent, distributor, and the end-user to make sure the products are in compliance with Japanese regulations and all proper documentation has been completed. For more information, please consult the Canadian Food Inspection Agency: Exporting food out of Canada or the Canadian Trade Commissioner Service: Step-by-Step Guide to Exporting - Step 6 - Opening the door: entering your target market and Japan's External trade Organization: Standards and Regulations.

Exporters should also determine the import classification and tariff rate for products. The Tariff Finder tool can assist exporters in determining tariff information for specific products and countries where Canada has a free trade agreement. Additionally, Japan Customs can help for requesting an advance ruling on tariff classifications, which is available to importers and related parties.

Additionally, CanExport provides funding to small and medium-sized enterprises (SMEs) to reach export markets and execute strategic marketing projects such as participation in trade shows. Interested Canadian SMEs are encouraged to apply for this funding. If you have questions about exporting your agriculture or food products, or are looking for support, please contact the Market Access Secretariat, Agri-food and Agriculture Canada at aafc.mas-sam.aac@canada.ca.

FOODEX Japan, is the largest food and beverage show in Asia and is an important annual event for Canadian exporters, as it brings in key buyers from Japan and Asia. The 2019 show, attracted 3,316 exhibitors coming from 94 countries with 85,000 visitors.Footnote 3

FOODEX is one of Agriculture and Agri-Food Canada's flagship trade shows, with customizable turn-key booths and streamlined access to financial support via the Canada Pavilion Program.

Conclusion

Japan is said to be a pioneer in the development of functional foods. The healthy drinks market in Japan for its general well-being and energy boosting consumer benefits is vibrant, which has been led by Suntory Holdings Ltd., and Coca-Cola in terms of company retail sales.

Japanese consumers are increasingly seeking out 'superfood' solutions to address health concerns such as stress and anxiety, tiredness/fatigue, dental/oral health, obesity, cholesterol, digestive health, memory loss, diabetes, and heart health. High protein, fibre and iron content foods are becoming popular to control blood sugar (diabetes), aid in weight loss, and provide anti-ageing benefits. Over the last year, growing claims included gluten free, antioxidant, and functional - brain and nervous system.

For more information

The Canadian Trade Commissioner Service

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

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For information on the FOODEX tradeshow held in Japan, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and agri-food Canada
ben.berry@canada.ca

Resources

Health and wellness series – Pathfinder on functional/fortified food and beverage trends in Japan
Global Analysis Report

Prepared by: Erin-Ann Chauvin, International Market Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2020).

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