The growing ienomi trend (towards consuming alcohol at home) continued to support strong growth in cheese at the end of the review period. The trend, which is underpinned by a number of factors, including consumer budget-consciousness, increasingly hectic lifestyles and the ageing of the population, saw consumers increasingly shift from drinking at bars and pubs to purchasing alcohol for home consumption.
Soft cheese was the fastest-growing cheese category in 2019, driven by increasing media coverage of the health benefits of cheese consumption and the expanding cheese menus offered by foodservice outlets. During the review period, the Japanese media highlighted health benefits associated with cheese, such as blue cheese rejuvenating blood vessels.
The Economic Partnership Agreement (EPA) between Japan and the European Union took effect on 1 February 2019, eliminating tariffs on a variety of imports, including wine and cheese. However, it will take time for Japanese consumers to benefit from lower prices on European cheeses, because while tariffs on wine were immediately abolished, those on cheese will be lowered gradually, limiting the immediate impact on prices.
Megmilk Snow Brand remained the largest player in cheese in 2019. The company’s 6P brand, which has been around for more than 60 years and is supported by continuous investment in promotional activities across a range of media, has been widely embraced by middle-aged consumers.
Experiencing continued share erosion in 2019, Morinaga Milk Industry lost second spot in the rankings to Rokko Butter Co. Morinaga Milk Industry is working to strengthen its position and respond to evolving demand trends through moves such as promoting its products as compatible with the growing demand for cheese as otsumami.
Rising consumer awareness and demand for cheese is encouraging the development of an expanding range of products incorporating cheese. A growing number of restaurants are offering menus involving cheese, ranging from cheesy pizzas to the use of cheese as a component in traditional Japanese food, which does not normally include dairy products, such as Warashibe Gyoza’s Cheesy Teppanyaki Fondue Gyoza, which combines traditional gyoza dumplings with melted cheese, and Tsukumo Ramen’s Cheese Ramen, which brings together cheese and ramen noodles.
While the production of raw milk was slightly affected by natural disasters in 2018, fresh milk saw growth in the final year of the review period on the back of the ongoing healthy living trend amongst consumers. Although the nutritional value of milk in contributing to bone health has been well known for a long time, its health benefits are gaining renewed attention as consumers become generally more health-conscious.
The end of the review period saw consumers display a growing interest in the taste and quality of milk, reducing the prominence of pricing in purchasing decisions. Consumers are now opting for better quality fresh milk, for which they are willing to pay slightly higher prices.
Milk alternatives continued to see strong growth in 2019, driven by the consumer trend towards healthy living. Soy drinks continued to account for the bulk of milk alternatives sales at the end of the review period.
Meiji maintained a narrow lead over Megmilk Snow Brand in 2019. Meiji’s lead is founded on its powerful Oishii Gyunyu brand.
Kikkoman Inryo Co Ltd, the leading player in soy drinks, is at the forefront of efforts to diversify consumption in the category. In 2019, the company’s soy drinks range saw the introduction of the new grape and azuki beans flavours, which are designed to be frozen and consumed as ice cream.
The top three players in drinking milk products, Meiji Co Ltd, Megmilk Snow Brand Co Ltd and Morinaga Milk Industry Co Ltd, all raised the prices of popular brands to address the issue of the rising cost of production at the end of the review period. In combination with an upmarket trend in consumer demand, this led to a significant increase in unit prices across fresh milk in 2019.
Yoghurt and sour milk products (entirely comprised of yoghurt in Japan) saw rising unit prices drive a return to growth in 2019, with the category having previously witnessed two consecutive years of stagnation. Yoghurt had seen its growth stalled primarily by the waning of demand for probiotic yoghurt, which has seen a considerable increase in competition from probiotic products in other areas.
As probiotic yoghurt struggles to maintain a distinctive competitive positioning in the wake of the introduction of a raft of other packaged food products containing probiotics, yoghurt manufacturers are looking for other ways to attract health-conscious consumers. Companies are putting significant effort into addressing niche consumer needs, with claims no longer targeting broad health concerns, such as digestive health, and, instead, sharpening their focus on more specific areas of demand, such as body-fat reduction or high protein content.
Plant-based yoghurt, which has been becoming more popular globally, saw its presence expand in Japan towards the end of the review period. In contrast to other markets, the plant-based yoghurt available in Japan is heavily biased towards soy-based products, with products based on ingredients such as oats and almonds registering an extremely limited presence.
Meiji Co Ltd extended its lead in yoghurt in 2019. The company has been the leader in the research and development of probiotics in yoghurt in Japan with over 5,000 active bacteria samples in its research repository.
As well as Meiji, other major yoghurt manufacturers are targeting health-conscious consumers with more specific claims about the health benefits of products. In 2018, Megmilk Snow Brand relaunched Megumi SP Kabu Yoghurt as the first Food for Specified Health Uses (FOSHU) yoghurt in the market.
Pokka Sapporo Food & Beverage, a major producer of non-dairy yoghurt in Japan, has been offering soy-based yoghurt since 1997 and added a new brand in 2019. Moreover, the final year of the review period also saw the company invest JPY5.
Chilled and shelf stable desserts continued to dominate other dairy, which also which includes cream, coffee whiteners, condensed milk and fromage frais and quark, in Japan at the end of the review period. The importance of chilled and shelf stable desserts is underpinned by the popularity of purin, a sweet pudding that appears on the shelves of store-based retailers nationwide.
Coffee whiteners continued to see the sharpest decline in other dairy in both volume and current value terms in 2019 as it faced intense competition from fresh milk and RTD coffee and fresh coffee with milk at convenience stores and specialist coffee outlets. Furthermore, younger generations in Japan are relatively unfamiliar with coffee whiteners, and some are not aware of what the products are made of or have not even seen such products.
Like coffee whiteners, condensed milk continued to register significant decline in both volume and current value terms in the final year of the review period. The category is seeing sales fall as opportunities for consumption contract.
Morinaga Milk Industry remained the largest player in other dairy in 2019, thanks mainly to its significant presence in chilled and shelf stable desserts and condensed milk. Although it is one of the largest dairy manufacturers in Japan, with an extensive product portfolio from milk formula to ice cream, the company is suffering from overall sales decline in other dairy.
The leading company in chilled and shelf stable desserts, Morinaga Milk Industry is amongst the players in the category looking to reinforce the position of established brands, renewing its long-selling Gyunyu Purin brand with a richer milk flavour towards the end of the review period. Ezaki Glico, the second largest player in the category, is also working to strengthen the position of an established purin brand, appointing Japanese artist, Toshl, to represent its Pucchin Purin brand and launching a new brand website.
Manufacturer efforts to revitalise chilled and shelf stable desserts have also included new product development. Morinaga Milk Industry added new flavours to its low-carb pudding brand, Oishii Teitoshitsu Purin, claiming to offer a healthy but tasty dessert to appeal to the growing number of health-conscious consumers.
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This industry report originates from Passport, our Packaged Food market research database.