Contents. Introduction to the EBC Japan Market & Perspectives Opportunities & Challenges
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2 Contents Introduction to the EBC Japan Market & Perspectives Opportunities & Challenges
3 EBC The European Business Council in Japan (EBC) is the trade policy arm of 17 European National Chambers of Commerce, Business Associations & other organisations in Japan. EU/Japan FTA/EPA
4 World Bank s Ease of Doing Business Rankings Trading Across Borders Ranking Source: World Bank
5 The EU in world trade 10 major EU export partners (2011) Rank. EU Exports to Mio euro % world 1 USA China ,9 3 Switzerland ,9 4 Russia ,1 5 Turkey ,7 6 Japan ,2 7 Norway ,0 8 India ,6 9 Brazil ,3 10 U.A. Emirates ,1
6 EU World s Biggest Economy Japan Seeking Deep Interdependence Source: MOFA 2011
7 Global Top 10 Grocery Markets Euro Bn Global Food Retail Industry Value: Approx Euro 3 Trillion Japan is approx: 11.5% of global market 30% of Asia-Pacific market Source: Yahoo Finance Global Food Industry, 26 June, 2013 Reference Year 2010
8 Food Self-Sufficiency Ratio % food self-sufficiency (calorie basis) Source: Ministry of Agriculture, Forestry and Fisheries
9 Farming Under Pressure in Japan Source: U.S. Department of Labor: Bureau of Labor Statistics
10 Japan Food Distribution Channels GMS / Hypermarkets Quality supermarkets Convenience Stores Department Stores Health / Natural Online Speciality: Gourmet, Novelty, Lifestyle, Drugstores, Horeca Warehouse / Discount Other
11 Global Organic Food & Beverages Market Euro Bn Source: International Federation of Organic Agriculture Movements, FIBL & Ken Research
12 Global Organic Food & Beverages Market Source: International Federation of Organic Agriculture Movements, FIBL & Ken Research
13 Per Capita Consumption Organic Food & Beverages 2011 Euro / Person / Year Source: International Federation of Organic Agriculture Movements, FIBL & Ken Research
14 Japan Packaged Organic Food as % of Total Packaged Food Market Source: International Federation of Organic Agriculture Movements, FIBL & Ken Research
15 Significance of Organic Sector in Food Consumption 2007 Source: International Federation of Organic Agriculture Movements, FIBL & Ken Research
16 Japan Organic Food & Beverages Market Euro m Source: International Federation of Organic Agriculture Movements, FIBL & Ken Research
17 What is Our Unique Selling Point? Exceptional Food for Thinking People
18 Distribution
19 Euro m MIE PROJECT Net Sales
20 Japan Food Market Trends Safety (radiation, additives, pesticides, traceability, etc.) Quality Diversity Health: low calories, low cholesterol, organic, etc. Functional Foods: Coconut Water, Acai, etc. Convenience Novelty Ecological Small Portions Low price & good quality New store concepts opening frequently
21 Regulations on Food Imports (1) Food imports are monitored by the quarantine stations of the Ministry of Health, Labour and Welfare. Import laws regulating food imports: Food Sanitation Act Plant Protection Act Act on Domestic Animal Infectious Diseases Control Source: Japanese Food Market and the JETRO Zone at Foodex Japan 2012
22 Regulations on Food Imports (2) Imported Foods Inspection Services Home Page Import Procedure under Food Sanitation Law Procedures of Import Notification of Foods and Related Products Inspection Order System, Monitoring Inspection System, Other Inspection Systems Implementation of Inspection Orders based on Section3,Article 26 of the Food Sanitation Law (2013) Schedule 1 (Last amendment: Sep. 20, 2013) Please note. This list does not list all the inspection. 22
23 Food Sanitation Act Fundamental law to ensure food safety Sets the specifications and standards for food (e.g. food additives, microbiological, agricultural chemical residues, radiation, packaging material, etc.) In line with this law all the foods imported are inspected at quarantine stations Source: Japanese Food Market and the JETRO Zone at Foodex Japan 2012
24 Food Additives Food Additives Preservatives, Sweeteners, Colourings, Flavourings, etc. Food Sanitation Act lists food additives that can be used in foods Foods containing food additives that do not appear on the list are prohibited from being imported into Japan Source: Japanese Food Market and the JETRO Zone at Foodex Japan 2012
25 Food Additives (2) Permitted food additives are classified into 4 categories as follows: 1) Designated additives (413 substances) eg: Benzoic acid, calcium carbonate, citric acid etc. 2) Existing additives (365 substances) eg: Orange colour, palm oil caroten, pectin etc. 3) Natural flavouring (about 600 substances) eg: Aloe, durian, honey etc. 4) General food additives (about 100 substances) eg: Strawberry juice, green tea etc. Source: Japanese Food Market and the JETRO Zone at Foodex Japan 2012
26 Food Additives (3) Attention must be paid to the usage standards of food additives: maximum quantity limits, purpose condition etc. Some food additives are not permitted to be used in foods, even though they may be legal in your country <Information> Source: Japanese Food Market and the JETRO Zone at Foodex Japan 2012
27 Quality Labeling System Imported foods as well as domestic products in Japan, must display the appropriate food labels when sold in Japan. Items that have to be listed on food labels 1) Fresh produce Product name Country of origin 2) Processed food Product name List of ingredients Net contents Best before date Preservation method Country of origin Importer s name and address Source: Japanese Food Market and the JETRO Zone at Foodex Japan 2012
28 Product Unique selling points Strong product line up New items frequently Scrap & Build Price Strategies Optimal level Change as little as possible Have clear price structure that allows distribution options
29 Promotion PR is best value for money Internet / Social Media In-store tastings Seek cost-effective ways to get awareness & trial partnering opportunities Few foreign brands have the resources to do major campaigns Distribution Strategies Diversify if possible Minimise middlemen Pricing structure crucial (take care when selling direct to retailers) Consider sector specialist partners Own retail presence
30 Opportunities 3 rd largest food market in the world Many underdeveloped areas (Galapagos) Japanese are Europhiles Europe is global leader in food Foreigners are still rare in Japan food industry Can stand out / get attention Think long term, though success can come quickly EU/Japan FTA-EPA
31 Challenges Quality Assurance / Safety Shelf life ideally min 1 year with min. monthly production (some retailers demand min half / two-thirds remaining shelf life on delivery) Check all differences in legislation between your product / country and Japan Avoid changes in product and/or notify importer well in advance Imported packaged food remains relatively niche and expensive Time to build relationships and win trust of retailers Recruitment Achieve critical mass min JPY 500m net sales
32
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