Japan Food and Drink Report Q4 2010

Business Intelligence
September 23, 2010
77 Pages - SKU: BTAI2831118
License type:
Countries covered: Japan

The outlook for Japan’s consumer driven industries continues to remain poor as the country still suffers from weak GDP growth, a strong yen and the continued global slowdown in demand. This weak economic outlook, along with an ageing population, stagnant wage growth and market saturation will all have a negative impact on the food and drink sector’s growth moving forward. The outlook for the country’s mass grocery retail sector is also very shaky. After experiencing many years of strong growth as a consequence of the country’s economic development, sustained periods of high consumer confidence and the modern and sophisticated tastes of its consumers, sales through such outlets have now lost momentum. Nevertheless, despite this challenging outlook, Japanese consumers remain very susceptible to product innovation and this remains a very large, wealthy and sophisticated consumer market.

Headline Industry Data
2010 per capita food consumption = +1.6%; forecast to 2014 = +9.2%
2010 alcoholic drink sales = +1.7%; forecast to 2014 = +14.2%
2010 soft drink sales = +4.5%; forecast to 2014 = +36.9%
2010 mass grocery retail sales = +0.3%; forecast to 2014 = +1.9%

Key Company Trends

Poor Performance in the Beer Sector - A number of leading brewers have posted poor results due to declining consumer demand in Japan's alcoholic drinks market. Sapporo posted a 2.9% year-on-year (y-o-y) slip in net sales to JPY177.1bn (US$2.06bn) and a 10.3% y-o-y fall in its operating income for the six months ending June 2010. Meanwhile, Kirin Breweries also reported poor financial results for H110, as revenue slipped 4.7% to JPY1.01tr (US$11.8bn). Finally, Asahi Breweries posted a 0.4% y-o-y fall in net sales; however, it also posted 15% growth in operating income for H110.


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