Rising Tide of Imports Lifts the Boat
For Japanese Frozen Food Market

China widens lead over United States as largest source of imports. Non-fried prepared foods continue to lead growth. Retail domestic production outpaces that for foodservice.

Frozen food consumption in Japan inched up 1.9% last year to 2,284,810 tons, but without imported frozen vegetables, the increase would have been a bare 0.6%. Value of domestic production, moreover, slipped 0.3% to ¥735.2 billion; only imported vegetables brought sales up 1.6% to ¥846 billion.

As usual, there was an undetermined amount of frozen imports other than vegetables. The Japan Frozen Food Association estimated that this brought overall consumption to between 2.5 million and 2.6 million tons. Per capita consumption was 17.95 kilograms without that extra tonnage, and as much as 20.3 kg with it.

China, which had already overtaken the United States as the largest source of imported vegetables, widened its lead: at 348,526 tons, its shipments were up 14% from 2000, whereas imports from the US were down 1.8% to 291,199 tons. Chinese vegetables were cheaper, but not spectacularly so: they were valued at ¥53 billion versus ¥34.1 billion for US imports.

Imports apparently impacted domestic production unfavorably in farm products; tonnage was down 10% to 85,243, and sales 11.9% to ¥22 billion. But fishery products and meat and poultry didn't do well, either. In the prepared foods sector, fried foods were off 5.7% to 370,361 tons, but non-fried scored a 4.8% gain to 882,403. The small confectionery category, however, jumped 10.8% to 49,320 tons.

Finfish scored a 12.3% increase to 39,995 tons, and were up 15.2% in value to ¥32.6 billion. But sharp declines in shrimp, crabs and shellfish offset that. Most of the significant gains were in non-fried prepared foods, viz: noodles, up 10.6% to 209,873 tons; pizza, up 10.3% to 16,524; rice products, 8.0% to 161,308; bread and dough, 5.8% to 34,151; kneaded fish, 6.3% to 8,236; and other, 9.6% to 186,795.

While the US still dominated potato products, nearly all french fries, at 227,454 tons out of 274,237, China had a virtual lock on spinach (50,748 out of 50,831) and taro (55,292 out of 55,425). Beijing was even the largest source of broccoli at 7,256 tons, compared to 5,314 for Mexico; and China and Taiwan together dominated soybeans at 44,958 and 22,696 tons out of 77,200.

But import relations with China hit a snag this year when pesticides were detected in some shipments. A strict inspection regimen was soon imposed, and the Chinese government accused Japan of carrying out "unfair and discriminatory inspections." Out of 7,001 lots inspected during the first seven months of the year, said Assistant Foreign Trade Minister Guo Li, only 0.5% turned out to have pesticide residues in excess of Japanese standards.

While figures aren't available for vegetables, import statistics for french fries from January through July 2002 indicate that China accounted for only 538 tons - less than a tenth its volume for 2001. By contrast, the US had shipped some 102,775 tons, evidently keeping pace with last year's rate. Total imports for the seven months were 123,560 tons. The 2002 data are for fried potatoes only, whereas those for 2001 may include other potato products.

Although the Japanese frozen food market is still predominantly foodservice, domestic output for the retail market increased 3.5% to 469,941 tons and 1.5% in value to ¥245.9 billion, whereas production for the institutional market slipped 0.6% to 1,038,161 tons and its value fell 3.5% to ¥489.3 billion.
But don't count the foodservice sector out. A survey of 293 foodservice companies this year showed that frozen food accounted for up to 40% of their purchasing. Moreover, 30% of the companies said they were willing to increase frozen food procurement. Another indicator that doesn't bode well for retail sales: production of home freezers sank to 123,274 last year, from a high of 171,537 in 1999.