Executive Summary

Aug 2019
Prospects
Trend towards drinking at home supports cheese growth

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.

Cheese benefiting from a healthy image

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.

Economic Partnership Agreement to have a positive impact on imported cheese in the long-term

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.

Competitive Landscape
Megmilk encourages expanding range of consumption

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.

Morinaga Milk Industry working to promote products as otsumami

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.

Cheese appearing in a growing range of products

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.

Prospects
Rising health-awareness supporting growth in milk

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.

Growing interest in taste boosts demand for full-fat milk

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.

Soy drinks benefiting from health trend and manufacturer efforts to diversify consumption

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.

Competitive Landscape
Meiji looks to build on reputation for quality

Meiji maintained a narrow lead over Megmilk Snow Brand in 2019. Meiji’s lead is founded on its powerful Oishii Gyunyu brand.

Soy drinks leader seeks to expand range of consumption

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.

Major players raise prices

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.

Prospects
Probiotic yoghurt loses distinct advantage

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.

Looking for new ways to attract health-conscious consumers

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.

Limited but growing presence for plant-based yoghurt

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.

Competitive Landscape
Meiji maintains focus on health and innovation

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.

Manufacturers sharpen the focus of health claims

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.

Soy-based yoghurt manufacturers expanding production

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.

Prospects
Manufacturers responding to intensifying competition from outside the category

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 struggles to deal with health trend and rise of higher-end coffee

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.

Condensed milk suffers from natural trend

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.

Competitive Landscape
Morinaga Milk Industry seeks ways to respond to the waning of traditional demand

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.

Leading players work to strengthen the position of established brands

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.

New product developments target prevailing demand trends

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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Dairy in Japan

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Japan with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Japan, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in Japan market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth  
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Dairy in Japan?
  • What are the major brands in Japan?
  • How has the economic downturn impacted sales performance given its staple food status?
  • Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
  • How are volatile farmgate prices for milk impacting retail prices and sales performance?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Dairy in Japan - Category analysis

Butter and Spreads

HEADLINES

PROSPECTS

Stable supply supports butter growth
Margarine struggling due to unhealthy image of trans fatty acids
Manufacturers look to innovation to expand consumer base

COMPETITIVE LANDSCAPE

Megmilk Snow Brand builds on dairy strength through communication and innovation
Meiji pioneering spreadable butter
Fermented butter gaining in popularity

CATEGORY DATA

Table 1 Sales of Butter and Spreads by Category: Volume 2014-2019
Table 2 Sales of Butter and Spreads by Category: Value 2014-2019
Table 3 Sales of Butter and Spreads by Category: % Volume Growth 2014-2019
Table 4 Sales of Butter and Spreads by Category: % Value Growth 2014-2019
Table 5 NBO Company Shares of Butter and Spreads: % Value 2015-2019
Table 6 LBN Brand Shares of Butter and Spreads: % Value 2016-2019
Table 7 Distribution of Butter and Spreads by Format: % Value 2014-2019
Table 8 Forecast Sales of Butter and Spreads by Category: Volume 2019-2024
Table 9 Forecast Sales of Butter and Spreads by Category: Value 2019-2024
Table 10 Forecast Sales of Butter and Spreads by Category: % Volume Growth 2019-2024
Table 11 Forecast Sales of Butter and Spreads by Category: % Value Growth 2019-2024

Cheese

HEADLINES

PROSPECTS

Trend towards drinking at home supports cheese growth
Cheese benefiting from a healthy image
Economic Partnership Agreement to have a positive impact on imported cheese in the long-term

COMPETITIVE LANDSCAPE

Megmilk encourages expanding range of consumption
Morinaga Milk Industry working to promote products as otsumami
Cheese appearing in a growing range of products

CATEGORY DATA

Table 12 Sales of Cheese by Category: Volume 2014-2019
Table 13 Sales of Cheese by Category: Value 2014-2019
Table 14 Sales of Cheese by Category: % Volume Growth 2014-2019
Table 15 Sales of Cheese by Category: % Value Growth 2014-2019
Table 16 Sales of Spreadable Processed Cheese by Type: % Value 2014-2019
Table 17 Sales of Unprocessed Cheese by Type: % Value 2014-2019
Table 18 NBO Company Shares of Cheese: % Value 2015-2019
Table 19 LBN Brand Shares of Cheese: % Value 2016-2019
Table 20 Distribution of Cheese by Format: % Value 2014-2019
Table 21 Forecast Sales of Cheese by Category: Volume 2019-2024
Table 22 Forecast Sales of Cheese by Category: Value 2019-2024
Table 23 Forecast Sales of Cheese by Category: % Volume Growth 2019-2024
Table 24 Forecast Sales of Cheese by Category: % Value Growth 2019-2024

Drinking Milk Products

HEADLINES

PROSPECTS

Rising health-awareness supporting growth in milk
Growing interest in taste boosts demand for full-fat milk
Soy drinks benefiting from health trend and manufacturer efforts to diversify consumption

COMPETITIVE LANDSCAPE

Meiji looks to build on reputation for quality
Soy drinks leader seeks to expand range of consumption
Major players raise prices

CATEGORY DATA

Table 25 Sales of Drinking Milk Products by Category: Volume 2014-2019
Table 26 Sales of Drinking Milk Products by Category: Value 2014-2019
Table 27 Sales of Drinking Milk Products by Category: % Volume Growth 2014-2019
Table 28 Sales of Drinking Milk Products by Category: % Value Growth 2014-2019
Table 29 NBO Company Shares of Drinking Milk Products: % Value 2015-2019
Table 30 LBN Brand Shares of Drinking Milk Products: % Value 2016-2019
Table 31 Distribution of Drinking Milk Products by Format: % Value 2014-2019
Table 32 Forecast Sales of Drinking Milk Products Products by Category: Volume 2019-2024
Table 33 Forecast Sales of Drinking Milk Products Products by Category: Value 2019-2024
Table 34 Forecast Sales of Drinking Milk Products Products by Category: % Volume Growth 2019-2024
Table 35 Forecast Sales of Drinking Milk Products Products by Category: % Value Growth 2019-2024

Other Dairy

HEADLINES

PROSPECTS

Manufacturers responding to intensifying competition from outside the category
Coffee whiteners struggles to deal with health trend and rise of higher-end coffee
Condensed milk suffers from natural trend

COMPETITIVE LANDSCAPE

Morinaga Milk Industry seeks ways to respond to the waning of traditional demand
Leading players work to strengthen the position of established brands
New product developments target prevailing demand trends

CATEGORY DATA

Table 36 Sales of Other Dairy by Category: Volume 2014-2019
Table 37 Sales of Other Dairy by Category: Value 2014-2019
Table 38 Sales of Other Dairy by Category: % Volume Growth 2014-2019
Table 39 Sales of Other Dairy by Category: % Value Growth 2014-2019
Table 40 Sales of Cream by Type: % Value 2014-2019
Table 41 NBO Company Shares of Other Dairy: % Value 2015-2019
Table 42 LBN Brand Shares of Other Dairy: % Value 2016-2019
Table 43 Distribution of Other Dairy by Format: % Value 2014-2019
Table 44 Forecast Sales of Other Dairy by Category: Volume 2019-2024
Table 45 Forecast Sales of Other Dairy by Category: Value 2019-2024
Table 46 Forecast Sales of Other Dairy by Category: % Volume Growth 2019-2024
Table 47 Forecast Sales of Other Dairy by Category: % Value Growth 2019-2024

Yoghurt and Sour Milk Products

HEADLINES

PROSPECTS

Probiotic yoghurt loses distinct advantage
Looking for new ways to attract health-conscious consumers
Limited but growing presence for plant-based yoghurt

COMPETITIVE LANDSCAPE

Meiji maintains focus on health and innovation
Manufacturers sharpen the focus of health claims
Soy-based yoghurt manufacturers expanding production

CATEGORY DATA

Table 48 Sales of Yoghurt and Sour Milk Products by Category: Volume 2014-2019
Table 49 Sales of Yoghurt and Sour Milk Products by Category: Value 2014-2019
Table 50 Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2014-2019
Table 51 Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2014-2019
Table 52 Sales of Flavoured Yoghurt by Flavour: Rankings 2014-2019
Table 53 NBO Company Shares of Yoghurt and Sour Milk Products: % Value 2015-2019
Table 54 LBN Brand Shares of Yoghurt and Sour Milk Products: % Value 2016-2019
Table 55 Distribution of Yoghurt and Sour Milk Products by Format: % Value 2014-2019
Table 56 Forecast Sales of Yoghurt and Sour Milk Products by Category: Volume 2019-2024
Table 57 Forecast Sales of Yoghurt and Sour Milk Products by Category: Value 2019-2024
Table 58 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2019-2024
Table 59 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2019-2024

Packaged Food in Japan - Industry Overview

EXECUTIVE SUMMARY

Increasing emphasis on generating value through health and convenience
Media attention plays key role in shaping demand
Shifting character of demand has potential to destabilise competitive landscape
Consumers drawn to convenient shopping options
Focus on value generation in the forecast period

FOODSERVICE

Sales to Foodservice
Demographic trends shaping foodservice demand
Labour shortage boosts demand for convenience
Targeting rising inbound tourism
Consumer Foodservice
Demand for convenience boosting consumer foodservice
Health trend exerting a growing influence on consumer foodservice
Instagram places growing emphasis on visual appearance of food and drink in consumer foodservice
Category Data
Table 60 Foodservice Sales of Packaged Food by Category: Volume 2014-2019
Table 61 Foodservice Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 62 Forecast Foodservice Sales of Packaged Food by Category: Volume 2019-2024
Table 63 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2019-2024

MARKET DATA

Table 64 Sales of Packaged Food by Category: Volume 2014-2019
Table 65 Sales of Packaged Food by Category: Value 2014-2019
Table 66 Sales of Packaged Food by Category: % Volume Growth 2014-2019
Table 67 Sales of Packaged Food by Category: % Value Growth 2014-2019
Table 68 GBO Company Shares of Packaged Food: % Value 2015-2019
Table 69 NBO Company Shares of Packaged Food: % Value 2015-2019
Table 70 LBN Brand Shares of Packaged Food: % Value 2016-2019
Table 71 Penetration of Private Label by Category: % Value 2014-2019
Table 72 Distribution of Packaged Food by Format: % Value 2014-2019
Table 73 Distribution of Packaged Food by Format and Category: % Value 2019
Table 74 Forecast Sales of Packaged Food by Category: Volume 2019-2024
Table 75 Forecast Sales of Packaged Food by Category: Value 2019-2024
Table 76 Forecast Sales of Packaged Food by Category: % Volume Growth 2019-2024
Table 77 Forecast Sales of Packaged Food by Category: % Value Growth 2019-2024

SOURCES

Summary 1 Research Sources