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Convenience trend boosts Japanese processed food investment opportunities

By Mark Astley , 05-Jan-2012

Changing demographics and a shift in demand has opened up new opportunities for foreign investment in the once difficult to enter Japanese processed food market, says a US Government report.

The Japanese food processing market, which was valued at around $255bn in 2010, has traditionally been viewed as a complicated market to enter, according to the US Department of Agriculture (USDA) report, Japan Food Processing Ingredients, Food Processing Sector.

However, a series of factors including an increasing emphasis on quick, convenient, ready-to-eat and value priced foods have opened up the market.

Fast-paced lifestyles

“There are many factors to consider before entering this market, specifically the strict regulations on specific ingredients and additives,” said the report.

“Despite this, the Japanese market is still one of enormous potential.”

“With the changing population, demand is shifting and new opportunities are presenting themselves.”

The fast-paced Japanese lifestyle has led to the growth of processed foods, often bought from a growing number of convenience stores, as a replacement for homemade meals.

“Packaged sauces, meals in-a-box, instant meals, and other easy to make options are growing in popularity and it is this sector of easy home cooking which will continue to grow,” the report added.

Heightened consumer and retailer food safety concerns and a larger focus on the demographic of 20 to 30 year olds have also been attributed as factors.

“As the number of women in the workforce has grown, the age at which people are getting married is pushed back further. This trend coupled with more and more young professionals living outside their parents’ homes has resulted in a new demographic, especially for processed foods.”

“These twenty and thirty year olds are looking for single portion meals that are easy to prepare and that fit their lifestyle.”

Growing in ‘stagnant’ economy

The Japanese sector is viewed as a stable and growing industry in a country where the economy has become “stagnant,” the report said.

“Despite the recession and sub-normal performance of the economy, the food processing industry has done relatively well”

“Products that contribute to home cooking or ready-to-eat (RTE) options have experienced growth.”

“Several product categories sold well in 2010 compared to 2009, mostly due to the Northeast Earthquake and Tsunami. Most notably, canned/bottled products, bottled water, juices, processed meats, processed seafood, retort packaged products, and frozen food increased.”

Its value, however, had increased only slightly on 2009, with “only a small uptick of 0.86% from 2009.”

“A deflationary economic environment over the past decade, causing processors to seek out lower cost food inputs and international processing options in order to remain competitive.”

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