Frozen Food Sales in Sharp Drop;
New Regime May Curb Imports

With Japanese population shrinking, and aging, industry faces challenging times ahead.

Frozen food consumption in Japan declined for the second year in a row during 2008, and the pace of decline accelerated to 7.3%, due mainly to a sharp 27.4% drop in imported prepared foods. Imported vegetables were down 6.2%, but those imports could become the target of the new government, which has championed “food security” and aims to step up domestic production.

Retail and institutional tonnage for domestic frozen products both declined, 3.4% to 625,840 for the former and 5.7% to 945,556 for the latter. Retail share was only 35.7%, a point higher than for 2008. Retail value of domestic production increased 2.7% to ¥246,167 billion, while institutional value dipped 1.6% to ¥418,045 billion.

Source: Japan Frozen Food Association

The Democratic Party of Japan (DPJ), which on Aug. 30 defeated the Liberal Democratic Party by a landslide, wants to cut food imports that make up 59% of Japan’s total supply, helping local farmers at the expense of growers in the United States and China under a ¥1 trillion subsidy policy.

Japan could boost its food self-sufficiency rate to 50% by 2019 under the plan, according to Nobutaka Tsutsui, a DPJ lawmaker in charge of agriculture policy. It was 41% for the 52 weeks ended March 31. China, which exports even more frozen vegetables to Japan than the US, would also have much to lose.

With an aging demographic and total population that is beginning to decline, there are soft spots in the frozen food market even for domestically-produced products. Prepared foods, for example, declined 5.4% overall to 1,230,475 tons – and it wasn’t because people were eating healthier alternatives: fried foods gained at the expense of non-fried, and there was a 24% spike in the small confectionery sector. Domestic farm products were up 5.9% to 106,595 tons, but the decline in imports meant Japanese weren’t consuming any more than before.

Prices soared in some categories. Fried chicken, an American cultural import, showed a 6.9% increase in tonnage, but 20.4% in value. Fried squid, a Japanese tradition, was up 4.9% in volume but 21% in value. Prepared foods generally were more expensive last year, with double-digit value gains in five out of nine fried items and three out of 15 non-fried products.