ORGANIC products have increased their presence in the Japanese packaged food market on the back of a general upmarket shift in demand, providing business opportunities for entrepreneurs.
The Euromonitor Digest, released by the Department of Trade and Industry-Export Marketing Bureau, said this trend was most prominent in organic chocolate confectionery due to the growing interest in artisanal-style products and broader concerns about the origin of food, thus encouraging small-to-mid-sized players to introduce organic chocolate.
However, the report pointed out that organic remains a niche area in the market, accounting for only 2 percent of total health and wellness packaged food value last year. This was attributed partly to a lack of awareness of the difference between additive-free and organic products.
“The Japanese ease and familiarity with technological innovation and functionality may also act as an obstacle to some extent, though organic fits neatly with a more general increase in demand for natural products,” the report said.
It expects the Tokyo Olympics in 2020 providing a boost to organic products with the release of basic guidelines in the procurement code relating to sustainability for the Games.
Internet retailing is the largest distribution channel for organic packaged food, accounting for 40 percent of total category value last year.
This is in contrast to other health and wellness categories in Japan, including packaged food and beverages, in which Internet retailing was responsible for only 4 percent of value sales during the year.
“There are store-based retailers that specialise in organic food and beverages, such as organic supermarkets, but many organic players focus on Internet retailing because of the impact of traditional store-based distribution on margins on top of the already considerable cost of organic production,” it said.
Artisanal products accounted for 38 percent of total organic packaged food value in 2017, with small players, outside the top seven, responsible for a further 46 percent.