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Packaged Food in Japan
Packaged Food in Japan
Euromonitor International
December 2020
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Company response
Declining numbers of tourists due to COVID-19 led to the cessation of packaged food sales to
inbound arrivals in 2020. This is having a significant impact on growth of some categories
among which tourists represent a key consumer base, such as cakes. In response, some
players, which mainly focus on selling souvenirs or gifts, started to expand their distribution
networks in order to attract a wider audience. For instance, Tokyo Banana, which is a soft
sponge cake filled with sweet banana custard, is one of the most popular souvenirs in Tokyo.
The product by Grapestone Co Ltd, was previously only available in Tokyo, but was expanded
to include 7-Eleven convenience stores nationwide during 2020 in order to attract demand from
those seeking snacks and to offset the dramatic loss in tourist demand for souvenirs.
Industry players with products offering immune-boosting properties are also recording strong
demand since the onset of COVID-19. For instance, Meiji enjoyed a large spike in sales of its R-
1 probiotic yoghurt containing R-1 lactic acid bacteria, which is said to improve the body's
immune function and reduce the risk of flu. The company also launched the brand in larger 336g
packaging in response to soaring demand in early 2020 and for use among families. Other
examples of new products with immune-boosting positioning include meat balls containing
Shield Lactic Acid Bacteria from NH Foods launched in late 2020. Varieties included Chicken
dango with lactic acid bacteria and ginger and Chicken dango with lactic acid bacteria and yam.
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Retailing shift
Since the onset of the global pandemic, consumer shopping experience when visiting retailers
has been dramatically different, with shoppers having to wear masks and maintain social
distancing. In addition to the inconvenience caused, many people opted to avoid stores entirely
and chose e-commerce and home shopping channels, both of which witnessed a surge in
demand. As a result, grocery home delivery providers such as Oisix and Co-opdeli Consumers'
Co-operative Union enjoyed a strong sales increase. Products such as noodles, frozen
packaged food products and meal kits were among the categories to see the strongest spikes in
home deliveries.
Given the prolonged nature of the COVID-19 pandemic, supermarkets are also increasingly
offering more e-commerce options in response to demand from people staying at home and to
improve the services and variety of products available. For instance, Aeon, one of the largest
mass merchandisers in Japan, started a full-scale service in which customers are able to
receive items that they order online via a drive-through system. Others are operating shared
refrigerators.
Life Corp is also in the process of developing its food delivery service in tandem with Amazon
Japan GK. Since the pandemic, the company has accelerated its expansion to service Tokyo’s
23 wards and four cities in the capital as well as the city of Osaka. Thanks to its ability to ship
groceries alongside products ordered under Amazon’s services, Life can now reach areas that
would otherwise be unprofitable with many deliveries taking place in under two hours. Deliveries
also take place to stores providing consumers with the option of picking up products at their
convenience, providing this takes place during store opening hours.
Other developments and changes that were specifically stimulated by the pandemic included
those by Cookpad Inc. This company operates a recipe-sharing website and also enables
consumers to pick up products ordered online from shared refrigerators set up at railway
stations, drugstores and other locations. It can also deliver products ordered by up to 50 people
simultaneously. Its Cookpad Mart service is also popular for fresh food products and enables
consumers to drop by the refrigerators at their convenience, with the company receiving
requests to set up refrigerators in communal areas of condominiums.
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even when the threat of coronavirus diminishes. This combined with the “new-normal” lifestyle,
where more consumers may tend to stay at home, will positively impact the market and help it to
recover from this unprecedented health crisis in the forecast period. As consumer foodservice
and institutions reopen, some eating occasions which shifted into the home in 2020 will shift
back, though some consumers may prefer to stay at home and avoid foodservice either to save
money or because the pandemic stimulated a longer-term change to their lifestyles.
Japanese consumers were already typically health conscious prior to COVID-19. However,
the growth spike in food containing healthy bacteria, such as natto, Japanese fermented
soybeans and yoghurt that were perceived to help strengthen the immune system are expected
to remain in vogue even after the threat of COVID-19 diminishes, with COVID-19 having
increased awareness and demand further for food that offers preventative health benefits.
Moreover, with the country’s rapidly ageing population will mean that any products that can
support healthy ageing and protect against illness are likely to prove popular.
As lifestyles slowly return to normal and the country begins on its road to economic recovery,
increasingly busy lifestyles will once again boost demand for convenient products that help save
time, with industry players focusing more attention on convenient packaging and variety of pack
sizes to suit consumption occasions.
FOODSERVICE
Sales to Foodservice
Outlet closures stimulate a decline in volume sales of packaged food to foodservice in 2020
In 2019, packaged food sales to foodservice continued to be impacted by social and
demographic developments. The increasing number of single-person and dual-income
households and the rising participation of women in the paid workforce placed growing pressure
on consumers’ time and encouraged them to opt for the convenience of foodservice channels.
However, Japan’s shrinking and ageing population also placed constraints on the development
of foodservice. Nonetheless, as foodservice was adapting to evolving market conditions through
the development of evermore convenient options, including delivery services such as Uber Eats,
foodservice operators were expected to maintain significant demand for packaged food products
during the forecast period.
With Japan facing a major labour shortage, growing numbers of foodservice operators were
also looking to convenient, easily prepared packaged food products to remove the need to
prepare meals from scratch. In this way, not only were foodservice operators able to use a
smaller workforce, but one which is less skilled and, therefore, employable from a wider base.
Indeed, using convenient packaged food products enables even relatively unskilled part-time
workers to produce meals easily. Consequently, products that only require simple preparation,
such as frozen baked goods and frozen noodles, were seeing a significant increase in demand
in foodservice channels, while demand for products such as chilled noodles was declining.
However, during 2020, sales of packaged food to foodservice operators decreased
significantly due to store closures or shortened business hours during the state of emergency,
and also because more people refrained from eating out. This had a particularly negative impact
on products such as frozen baked goods and frozen noodles with the closure of foodservice
outlets during the state of emergency resulting in a hefty drop in volume sales of packaged food
to foodservice outlets.
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Consumer Foodservice
Outlet closures and shorter working hours due to COVID-19 negatively impact consumer
foodservice in 2020
During 2019, already facing considerable challenges posed by a shrinking and ageing
population, a severe labour shortage and a consumer trend towards eating at home, the
Japanese consumer foodservice market was responding to an increase in the rate of VAT,
government efforts to promote cashless payment and the outbreak of a novel coronavirus. The
lack of available labour, contraction of the consumer base, intense competition and
cannibalisation within brands were already leading major players to reconsider their strategies,
particularly the convenience store operators that dominate the top of the rankings in consumer
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foodservice. The shrinking of the consumer base and the recognition that ongoing network
expansion was unsustainable were forcing players to work to raise spending per consumer visit.
Efforts in this direction included the development of higher-value menu options targeting
prevailing demand trends and work to encourage consumers to spend more time in outlets by
enhancing the overall consumer experience. In addition, consumer foodservice players were
seeking to generate sales beyond outlets and tap into the growing demand for eating at home
amongst busy and elderly consumers by expanding their takeaway and delivery options, either
by partnering with third-party platforms or developing their own services.
In 2020, however, the consumer foodservice industry was particularly badly affected by the
state of emergency, as businesses were requested to close or shorten their business hours.
Consumer traffic to these outlets ground to a halt with past efforts to attract a wider audience to
outlets being temporarily but significantly disrupted. The negative impact was especially strong
in izakaya, Japanese-style pub restaurants, as they were asked to stop serving alcohol at
19.00hrs and close at 20.00hrs during that time. Moreover, some consumers continued to
refrain from drinking out even after the state of emergency was lifted over fears over virus
transmission. However, one exception was fast food chains which actually enjoyed sales growth
during the state of emergency due to growing demand for takeout options.
Foodservice players expand into delivery options and frozen food in order to offset decline in
outlet sales
Facing a decline in customer traffic, foodservice players began seeking ways to survive in the
COVID-19 era. For instance, more restaurants started to offer takeout and delivery options,
such as Denny’s, one of the major family restaurant chains in the country, which opened a
takeout and delivery-only store. This is designed to take advantage of the nesting trend with
consumers staying at home to avoid virus transmission. Other foodservice chains chose to enter
the retail packaged food business, such as Odoya Holdings, which is a Japanese-style set meal
restaurant chain, launching frozen packaged food. The company launched eight types of frozen
foods for sale via its 22 stores and includes chicken and vegetable black vinegar bean paste
and sedate salt grilled, as well as frozen food-only products such as demi-hamburger steak. The
company focuses on targeting older generations who are unable to visit stores frequently. With
these products, it aims to help consumers enjoy the taste of restaurant food at home. Even after
the pandemic recedes, the company is also looking to develop this new business model through
convenience stores and supermarkets.
Joint efforts to support ailing consumer foodservice industry after the onslaught of COVID-19
while menus focus more heavily on the healthy
Due to the strong negative impact of COVID-19 on consumer foodservice, the government,
support groups and manufacturers engaged in several efforts to support industry players. For
instance, the government started its Go To Eat campaign, which encourages people to dine out
by offering discounts. Moreover, Sakimeshi.com, a restaurant support project was launched in
early March. As part of the project, consumers were able to buy a pre-paid restaurant ticket for
some point in the future after the COVID-19 outbreak comes under control. Japan’s beverage
giant Suntory Holding, one of the largest beverage players, now also contributes funding to the
project and supports its marketing activities lending the project considerable gravitas.
As well as impacting retail sales of packaged food, the rise in consumer health-awareness is
exerting a strong influence on demand in consumer foodservice. Consumers are increasingly
questioning the nutritional value of the consumer foodservice offer and have become concerned
that dishes can be high in salt, sugar or fat. In response, consumer foodservice operators are
expected to increasingly focus on offering healthier dishes, particularly menus targeting the
booming interest in low-carb diets. For instance, with consumers having cited the lack of low-
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carb options as a reason for not visiting its outlets, Yoshinoya introduced its Rizap Gyu Salad,
which is a beef bowl featuring vegetables instead of rice in collaboration with Rizap. The
company’s rivals, Matsuya and Sukiya, have also offered low-carb menus for some time and
succeeded in luring consumers away from Yoshinoya. The popularity of these menus is set to
grow further in the wake of the global pandemic with more such offerings being introduced over
the forecast period.
Category Data
'000 tonnes
2015 2016 2017 2018 2019 2020
% volume growth
2019/20 2015-20 CAGR 2015/20 Total
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Snacks
Baked Goods -29.7 -7.1 -30.7
Breakfast Cereals -29.3 -6.9 -29.9
Processed Fruit and Vegetables -28.6 -5.6 -25.1
Processed Meat and Seafood -29.0 -6.3 -27.7
Rice, Pasta and Noodles -29.4 -6.8 -29.8
Packaged Food -29.1 -6.4 -28.2
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
'000 tonnes
2020 2021 2022 2023 2024 2025
% volume growth
2020/21 2020-25 CAGR 2020/25 Total
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Snacks
Baked Goods 27.8 6.6 37.7
Breakfast Cereals 26.3 4.7 25.9
Processed Fruit and Vegetables 26.6 6.8 39.1
Processed Meat and Seafood 26.3 6.7 38.6
Rice, Pasta and Noodles 21.9 5.2 29.2
Packaged Food 26.2 6.1 34.7
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
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MARKET DATA
Table 5 Sales of Packaged Food by Category: Volume 2015-2020
'000 tonnes
2015 2016 2017 2018 2019 2020
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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
JPY billion
2015 2016 2017 2018 2019 2020
% volume growth
2019/20 2015-20 CAGR 2015/20 Total
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Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
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Other Private Label Other Private Label 8.0 8.0 7.9 7.9
(Private Label)
Artisanal Artisanal 2.9 2.7 2.7 2.5
Others Others 57.9 58.0 57.8 58.4
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
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DY CF ICF SS SSF BG
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breakfast cereals; PFV = processed frozen vegetables; PMS = processed meat and seafood; RPN =
rice, pasta and noodles
'000 tonnes
2020 2021 2022 2023 2024 2025
JPY billion
2020 2021 2022 2023 2024 2025
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Seafood
Rice, Pasta and Noodles 2,319.9 2,315.3 2,257.3 2,264.2 2,270.8 2,276.4
Packaged Food 21,297.6 21,224.3 20,920.5 21,061.6 21,192.6 21,315.4
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
% volume growth
2020/21 2020-25 CAGR 2020/25 Total
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DISCLAIMER
Forecast closing date: 12 October 2020
Report closing date: 8 December 2020
Analysis and data in this report give full consideration to the impact of COVID-19 on
consumer behaviour and market performance in 2020 and beyond. However, the situation
continues to develop rapidly, and the influence and severity of the pandemic are constantly
evolving. For the very latest insight on COVID-19 and its impact on industries and consumers, at
both global and national level, readers can access strategic analysis and updates
on www.euromonitor.com and via the Passport system, where new content is being added on a
systematic basis.
DEFINITIONS
Explanations of words and/or terminology used in this report are as follows:
▪ Bento: Single portion takeaway or home-cooked meal;
▪ Insta-bae: Photo-genic on the social media site, Instagram – an influential factor in the
purchasing decisions of younger female consumers, in particular
▪ Izakaya: Traditional bars for casual after-work drinking and dining;
▪ Karai: hot/spicy
▪ Nakashoku: Ready-to-eat "middle meals" positioned between gai shoku (dining out) and nai
shoku (food cooked and eaten at home);
▪ Udon: Traditional thick noodles, often served in soup;
▪ Yakitori: Grilled chicken skewers;
▪ Yatai: Traditional mobile stall, typically selling food such as ramen (noodle soup)
SOURCES
Sources used during research include the following:
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JA Echigo Nagaoka
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Raisin Association
Zen-Noh
Zentoren
Financial Times
Mainichi Shinbun
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Nikkei Trendy
Nikkei Weekly
Tokyo Shinbun
Yomiuri Shinbun
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