Japanese Market Gains, Just Barely,
With Population Stable and Aging

Imports make the difference, and they're mostly from China these days.

There wasn’t a lot of Japanimation in the frozen food market last year. Indeed, without a 7.7% surge in imported frozen vegetables, consumption would have declined in 2005. As it was, consumption was up a bare 1.6% in tonnage and only 0.5% in value.

With the Japanese population beginning to decline – some forecasts say it will fall from 127 million to 100 million by 2050 – perhaps the frozen food market is reaching its peak. Without larger homes and larger home freezers, consumers can’t stock up on frozens the way people in the United States and Europe can.

Per capita consumption, at 18.2 kilograms, was up 1.6% – the same as tonnage, indicating that the population has plateaued. Retail share of domestic production was 35.5%, with the retail market heavily weighted towards prepared foods other than fried (44.4%), while only 11.6% of fishery products output is for the retail sector.

Senior Citizen Trends – Not

Japan’s population is aging, but there isn’t any sign of a dramatic shift towards non-fried foods in statistics provided by the Japan Frozen Foods Association (JFFA). Fried foods overall were up slightly more than non-fried, with the greatest increase (21%) in cutlets. In non-fried foods, the biggest increases included 17.4% for hamburger and 19% for gyoza.

As in previous years, the JFFA noted that imports of frozen food other than vegetables appear to be growing, whereas frozen food exports are small, and gave a ballpark estimate of 2.6 million to 2.7 million tons for actual consumption. Just what the imports consist of wasn’t spelled out, but Poland has been exporting 2,000 to 3,000 tons of poultry a year to Japan and has a deal to ship at least 10,000 tons of frozen pork a year.

Import Ventures Growing

China pulled farther ahead of the United States last year as a source of imported vegetables, 348,234 tons versus 265,419. The US was still dominant in potato products at 218,637 and sweet corn at 29,976, but China was dominant in peas, beans, soybeans, spinach, broccoli, mixed vegetables and miscellaneous vegetables, and had the market almost all to itself in taro.

A lot of those imported Chinese vegetables come from joint venture operations set up there by Japanese companies to take advantage of cheap labor. But overseas ventures aren’t just for vegetables any more. A sign of the times is a new Thai-Japanese partnership, K&U Enterprise Co Ltd (KUE), which plans to export 70% of its production of frozen food products to the Japanese market, according to its president, Tetsuo Matsumoto.

The joint venture is owned equally by leading Thai frozen food exporter Thai Union Frozen Products Public Co Ltd (UFP) and Japan’s Kyokuyo Co Ltd. KUE has registered capital of 120 million baht and a 400 million baht factory in Samut Sakhon with production capacity of 4,000 tons per year.

Matsumoto said 70% of the company’s products – described as value-added and easy to eat – would be exported to Japan and sold through restaurant chains, take-away sushi kiosks and convenience stores. It may give Kyokuyo a leg up in the Japanese market, which is still fairly fragmented among a number of players.

Katokichi Co Ltd holds the largest value share in frozen processed food at just over 18%, and is also the leader in fish and seafood and frozen noodles, while registering the second largest value share in frozen processed vegetables and frozen bakery products, desserts and ready meals, and the third largest value share in “other” frozen processed food. The company saw growth in share in frozen rice within “other” frozen processed food and fried products, such as fried prawns and tempura items.