Domestic production inches up, and vegetable imports recover strongly from 2003 slump. But overall Yen value of domestic and imported products alike was off slightly last year.

Frozen food consumption rebounded in Japan last year, thanks largely to a renewed influx of imported vegetables. But the value of the market actually fell slightly, largely because those imported vegetables were so much cheaper.

Overall consumption as reported by the Japan Frozen Food Association (JFFA) was 2,287,973 tons, 5.2% ahead of 2003. But overall value, at ¥772.641 billion, didn't quite match ¥772.868 billion for the year before. Still, domestic prices were softer than those for imports: home production was up two percent to 1,526,625 tons, but value off 0.9% to ¥673.032 billion.

But there appears to be a substantial hidden market in what the JFFA calls "pre-cooked frozen foods" imports. These are usually cited as "small" in its annual reports, but a survey of member firms in 2003 reported a total of 222,825 tons, up 15.3% from 2002, valued at ¥92.38 billion, up 9.1%. As 2003 was a down year for other imports, there may well have been a further increase last year. Even if there wasn't, the total market should be at least 2.51 million tons and ¥865 billion.

There may be a healthy eating trend in prepared foods; fried items showed a 1.2% decline to 377,332 tons, while non-fried were up five percent to 917,437. Vegetable imports were up 12% to 761,348 tons, more than enough to offset a sharp decline in domestic production. French fries and other potato products topped the list of imports, up 12.1% to 268,443 tons, mostly from the United States and Canada. But domestic production, although slight, was up 22.2% for french fries, to 8,375 tons.

Domestic hamburger production was off 4.2% to 56,713 tons and 4.8% in value to ¥ 27.972 billion. But with the Mad Cow Disease scare and the ban on imports of US beef, hamburger consumption as a whole may have suffered more greatly. Indeed, McDonald's, the country's top hamburger chain, has had rough going since a case of Mad Cow Disease was discovered in Japan in 2002. McDonald's was apparently sourcing hamburgers locally, but a report on the country's foodservice sector by the US Foreign Agricultural Service (FAS) mentions that the chain does import frozen pork patties as well as french fries.

Frozen vegetable imports, unlike domestic production, aren't categorized as retail or institutional. But chances are that most of the market for them is institutional, just as it is for domestic products. Even though most Japanese have refrigerator-freezers at home, they are small units without space for a week's worth of frozen food. But eating out is different. According to the FAS, contract feeders like corporate cafeterias like to keep costs down, and frozen vegetables do just that. Frozen vegetables show up at restaurants as well as fast food chains.

A small but growing segment of the foodservice market is "Western restaurants," family dining facilities that offer many Western dishes or specialize in country-specific cuisine such as French, Italian and Mexican. Their menus rely heavily on imported food products to provide authenticity as well as taste. Large family restaurants chains such as Skylark, Royal Host, Denny's, Coco's, Tony Roma's and Sizzler's are major users of imported US foods including such items as frozen potatoes, frozen vegetables and beef. Mexican restaurants are even using frozen guacamole.

A number of frozen food plants in Japan have closed down; the count of operating units was 819 in 2004 versus 840 in 2003. Some may have relocated to China, which increased frozen vegetable exports to Japan by 18.7% to 327,655 tons.

JAPAN: Frozen Food Production and Consumption in 2003 and 2004

	Items	Fishery	Farm	Livestock	Prepared Foods	Confectionery
Year		Products	Products	Products	Fried Food Other Sub-Total		Vegetables
	2003	84,012	100,099	9,373	382,083	873,983	1,256,066	47,140	679,795	2,175,485
	2004	74,783	92,689	9,463	377,332	917,437	1,294,769	54,921	761,348	2,287,973
Volume	2004/2003	81.8	92.6	101.0	98.8	105.0	103.1	116.5	112.0	105.2
(tons)	Institutional	65,743	72,105	8,062	284,407	524,582	808,989	44,584	N./A	N/A
Retail		9,040	20,504	1,401	92,925	392,855	485,780	10,337	N/A	N/A
	2003	74.500	26.615	5.079	182.324	364.753	547.077	26.191	93.406	772.868
	2004	64.966	26.299	5.206	168.775	375.763	544.538	32.023	99.609	772.641
Value	2004/2003	87.2	98.8	102.5	92.6	103.0	99.5	122.3	106.6	100.0
(Â¥ B)	Institutional	56.246	19.951	4.266	117.802	211.831	329.633	27.243	N/A	N/A
Retail		8.720	6.348	940	50.973	163.932	214.905	4.780	N/A	N/A