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Japan Food and Drink Report Q2 2008Published by: Business Monitor International Published: May. 12, 2008 - 72 Pages Table of Contents
AbstractJapan is one of the most challenging food and drink, as well as retail, markets for foreign companies.While food and beverage consumption is high, buoyed by consumers with extremely strong purchasing power, interest in innovative products and responsiveness to marketing, the sector is mature and saturated, offering little in terms of long-term growth potential. In BMI’s Food and Drink Business Environment Ratings, Japan is placed joint fourth (alongside Thailand) in the table ranking 14 key markets in the Asia Pacific region. The country seen as offering fewer opportunities than the other mature markets, such as Australia and South Korea, while its substantial economic clout clearly provides room for companies already operating in the country, albeit in the shorter term.Overall, Japanese food and drink market can be viewed as a double-edged sword: on the one hand, its large and wealthy population is extremely receptive to innovation, but - on the other - companies investing in the country must accept steady and unspectacular annual growth. More recently, the situationhas been further complicated by rising commodity prices, which have eventually been passed onto consumers by both food and drink producers, and - more reluctantly - by retailers, which had previously attempted to absorb the rising costs themselves. The net result should be higher value, but lower volume sales, which will tend to cancel each other out in the short term, until some companies succeed in offering alternative retail formats and food and beverage products. In terms of individual segments, alcoholic beverages have been recording a slide over the past few years. In response to the toughening of the operating environment, major brewers are attempting to boost their involvement in other segments, as well as regions. To this end, in December 2007, Kirin and Suntory breweries unveiled new products in their domestic happoshu (carbohydrate-free versions of the quasi-beer drink) portfolios, with Asahi already marketing s a carbohydrate-free beverage Style Free happoshubrand. Sapporo followed suit with the launch a new low-carbohydrate beer at the end of February 2008.Around the same time, Asahi and compatriot trading house Marubeni Corp formed a wine-making joint venture in China, in partnership with Chinese brewer Da Fu Hao Beer Co, targeting a fledgling, yet enormously high-growth market. In the meantime, according to the figures jointly released by the country's five major brewers Japanese beer shipments fell in 2007 - for the third year running, reaching the lowest levels since 1992, when the brewers started collating such data. However, the recent fuel price rises resulted in the higher cost of beer, leading to the January 2008 11.9% increase in the sales of beer and beer-like drink. This development will further push consumers towards alternative beverages, which have already gained popularity due toincreased health-consciousness, although some brewers are aiming to protect themselves from soaring commodity prices. For example, Kirin is partnering Australian Lion Nathan to purchase raw materials, having successfully trialled the scheme in the course of 2007. Get Full Details About This Report >> |
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