Fortified/Functional Beverages in Japan

PROSPECTS

Labelling system leads to confusion and scepticism

While there is a strong demand for products with health benefits amongst Japanese consumers, the development of fortified/functional beverages is being constrained by a lack of consumer understanding regarding manufacturers’ functional claims, as well as the sheer volume of products making such claims. In April 2015, Japan introduced the Foods with Functional Claims (FFC) category with the aim of allowing manufacturers to offer products with more limited health claims than those in the Foods for Specified Health Uses (FOSHU) category.

Natural trend exerting a growing influence

While the strong rise in consumer health-consciousness is creating notable opportunities for the development of fortified/functional beverages, related concerns about the impact of artificial ingredients on health are acting as an obstacle to the category’s expansion. Consumers are increasingly looking for natural ingredients and naturally healthy beverages, such as NH RTD tea.

FF energy drinks becomes the largest category

FF energy drinks was the most dynamic fortified/functional beverages category in 2019. As a result, FF energy drinks overtook FF sports drinks to become the largest category in fortified/functional beverages in the final year of the review period.

COMPETITIVE LANDSCAPE

Coca-Cola adds energy drink to its portfolio

Coca-Cola (Japan) Co Ltd remained the largest player in fortified/functional beverages in 2019. The company saw its share fall significantly in 2018 despite the hot summer benefiting sports drinks overall, as its Aquarius brand experienced supply chain management issues due to natural disasters during the year.

Major energy drinks brands continue to perform well

Asahi managed to maintain strong growth for the Monster energy drinks brand at the end of the review period by continuing to focus promotion on younger consumers (who have become the main consumer base for energy drinks) with considerable investment in the sponsorship of sports, e-sports, fashion and music events. In addition, Asahi launched Monster Energy Pipeline Punch in April 2019.

Otsuka Holdings focuses on benefits of hydration

Otsuka Holdings is working to boost the performance of its Pocari Sweat brand by focusing on the health benefits of hydration. While the cold summer of 2019 had a marked negative impact on the brand’s sales, it has succeeded in extending consumption from the summer to the winter months as consumers have become aware of the need to remain hydrated during the flu season.

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