Food Exporter Guide for Japan

A Hot Tip about Food , Beverages and Tobacco in Japan

Posted on: 24 Dec 2009

Even with the current economic downturn, the Japanese food market represents significant opportunities for U.S. food exporters.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 10/1/2009 GAIN Report Number: JA9704 Japan EXPORTER GUIDE ANNUAL 2009 Update Approved By: Michael Conlon, Director ATO Japan Prepared By: Chika Motomura, Marketing Specialist at ATO Osaka, Ian McCain, Chris Donzelli, Erica Irby, Ayumi Shimizu, Interns at ATO Japan Report Highlights: Even with the current economic downturn, the Japanese food market represents significant opportunities for U.S. food exporters. In 2008, the United States exported $14.8 billion worth of agricultural, fish and forestry products to Japan. Prospective exporters are encouraged to follow regulatory changes in Japan's food safety system and stay up to date with reports from the Agricultural Affairs Office and the Agricultural Trade Offices in Japan. Post: Osaka ATO Executive Summary: Japan continues to represent one of the best opportunities in the world for U.S. exporters of food products. The total food and drink market in Japan is huge, valued at around $635 billion, when the food retail sector and the food service sector are combined. In 2008 the United States exported $14.8 billion worth of agricultural, fish and forestry products to Japan. Even with the current economic downturn, the Japanese food market represents significant opportunities for U.S. food exporters. Japanese consumers are becoming more health conscious and organic, naturally prepared, and functional foods are growing in popularity. There exist tremendous opportunities for U.S. exporters who are willing to follow the strict regulations and keep up with the fast-moving trends in the market. A Message from the U.S. Agricultural Trade Offices Welcome to Japan, the world?s largest market for imported consumer oriented food products and the largest overseas market for U.S. food and agricultural exports! We look forward to working with you in this dynamic market. To assist you, we at the U.S. Agricultural Trade Offices (ATOs) have prepared this Exporter?s Guide, the emphasis of which is placed on high-value consumer foods. Its objective is to provide helpful information to U.S. companies that export, or plan to export, to Japan. This guide is organized into four sections and appendices as follows: Market Overview A brief description of the market opportunity that Japan represents and how U.S. exporters may best fit into it. Exporter Business Tips Practical ideas on how to compete in this market. Market Sector Structure and Trends How food products move through the distribution system to the Japanese consumer today and how these channels may change in the future. Best High-Value Import Prospect Some of the hottest current import prospects in Japan. Key Tables and Appendices Tables and charts to provide information on the Japanese food market and economy, and lists of contacts and potential customers, and other useful information. To those exporters who are new to Japan, we believe you will find this guide helpful as a starter kit to work in this thriving market. To those who are old Japan hands, we believe you will also find useful information here that you may not have previously considered. We invite you to contact our offices in Tokyo and/or Osaka if we can assist you in building your Japanese business in any way, or if you have questions or comments on this guide. Gambatte Kudasai!* U.S. Agricultural Trade Offices in Japan *Good luck (or literally in Japanese - ?Do your best!?) Table of Contents I. Market Overview Current Trends Japanese Food Self-sufficiency Rate Opportunities for U.S. food exporters Maximum Residue Level Japan?s Market for U.S. Beef U.S. Advantages and Challenges II. Exporter Business Tips Dealing with the Japanese Consumer Preferences, Tastes and Traditions Export Business Reminders Food Standards and Regulations Import and Inspection Procedures III. Market Sector Structure and Trends Retail Sector HRI Food Service Sector Food Processing Sector Online Sales in Japan Population Trends IV. Best High-Value Import Prospects V. Key Tables and Charts Table A. Key Trade & Demographic Information Table B. Consumer Food and Edible Fishery Product Imports Table C. Top 15 Suppliers of Consumer Foods and Edible Fishery Products Chart 1. Japanese Food Import Mix from All Sources Chart 2. Trends in U.S. Shares of Japanese Food and Agricultural Imports Chart 3. Exchange Rate (JPY per US$) 1997-2008 Chart 4. Japan?s Food Expenditure Compared to the United States Chart 5. Japanese Food Self ?sufficiency Rate and Declining Farmer Population (1990-2005) Chart 6. Japan?s Population Growth and Expected Decline Chart 7. Japanese Unemployment Rate 1998-2008 Appendix A. Japanese Retailers Table A-1: Top 10 Supermarkets (2008) Table A-2: Top 10 Department Stores (2008) Table A-3: Top 10 Convenience Stores (2008) Table A-4: Top 10 Food Wholesalers (2008) Appendix B. Japanese Food Service Companies Table B-1: Top 10 Commercial Restaurant Food Service Companies (2008) Table B-2: Top 5 Institutional Food Service Companies (2008) Table B-3: Top 5 Home Meal Replacement Sector and Bento Producers/Marketers (2008) Appendix C. Japanese Food Manufacturers by Product Category Table C-1 Frozen Foods Table C-2 Ham & Sausage Table C-3 Ice cream Table C-4 Pasta Table C-5 Instant Noodle Table C-6 Beer Table C-7 Soft Drinks Table C-8 Tonic Drinks/Over-the-Counter Preparations Appendix D. Key Contacts Table D-1: U.S. Government Table D-2: U.S. State Government Offices in Japan Table D-3: U.S. Trade Associations and Cooperator Groups in Japan Table D-4: U.S. Laboratories Approved by the Japanese Government* Table D-5: Japanese Government and Related Organizations Table D-6: Japanese Associations - Food Table D-7: Japanese Associations - Beverages Table D-8: Japanese Associations - Distribution Sector Reports and Further Information I. Market Overview Japan continues to represent one of the best opportunities in the world for U.S. exporters of food products. In 2008, the United States exported $14.8 billion worth of agricultural, fish and forestry products to Japan. The total food and drink market in Japan is huge, valued at around $635 billion, when the food retail sector and the food service sector are combined. If you have a quality product that meets the needs and wants of the Japanese consumers, which can be produced and delivered competitively, and you have patience to research both the differences in consumer tastes and government regulations, you can build an attractive market position in Japan. Current Trends Japan?s market for high-value foods and beverages continues to change dramatically, with the latest trend being a major thrust toward functional, healthy and nutritious foods. While traditional menus and tastes still generally guide the average Japanese consumer?s consumption habits, Western and other Asian ethnic cuisines are making a major impact in the market. The Japanese consumers tend to be willing to pay high prices for quality and convenience. However, at the same time, due to the current sluggish economy in Japan, the food industry has recognized that consumers in general demand reasonable prices in addition to quality. Consequently, the industry has responded with 100- yen produce stores and other types of discount food outlets. Some major retail chains are vying for differentiation by introducing their own private branded products and providing consumers with safety assurance by making their meat and produce products traceable back to growers and producers. As the Japanese population is predicted to decline due to a low birth rate, the Japanese food market is expected to diminish somewhat in the future. Food retailers and food service operators are competing for consumers on a number of fronts, including price, convenience, variety and safety. Some companies are seeking a way to survive in the industry through mergers and acquisitions or tie-ups with partners beyond their traditional business channels. Japanese Food Self-sufficiency Rate While it is certain that Japan?s Ministry of Agriculture, Forestry and Fisheries (MAFF) works actively to support the interests of Japanese farmers, the Japanese food industry continues to rely on food imports in most categories. Overall Japanese agricultural production has been declining and the Japanese self- sufficiency rate has been hovering around 40%. To counter this trend, MAFF is allowing food corporations to engage in contract farming in certain locations. Nevertheless, the Japanese farming sector keeps declining with the average age of farmers continuing to increase, creating yet another negative impact on its self- sufficiency rate. The Japanese government hopes to raise the self-sufficiency rate by 2015 through encouraging citizens to consume more rice and other domestically produced products, but this policy has had little success to date. Domestic agricultural production is expected to decline further for years to come. Opportunities for U.S. food exporters There are many opportunities for alert U.S. exporters. Just a few examples include: Organic and natural foods/drinks and functional foods/drinks for the increasingly health-conscious; Precooked foods for convenience-conscious Japanese consumers; Products in easier-to-open containers for the rapidly growing elderly population; Food manufacturers seek quality ingredients and conveniently prepared semi-processed foods that can reduce costs. Maximum Residue Level In May 2006, Japan implemented a new system of regulations governing chemical, feed additive and veterinary drug (hereinafter referred to as agricultural chemicals) residues in food. At that time, Japan?s Ministry of Health, Labor and Welfare (MHLW) announced provisional maximum residue levels (MRLs) for 758 agricultural chemicals in addition to around 10,000 existing official MRLs. Provisional MRLs will remain ?provisional? until they are reviewed and permanent MRLs are established. Since then, permanent MRLs have been established for a number of agrochemicals, with the review for the remaining provisional MRLs expected to take several years to come. These official and provisional MRLs are known as the ?positive list?. Under this system, foods containing residues in excess of the established MRLs are regarded as violations of the Food Sanitation Law and rejected at the Japanese port. MRL violations will have adverse effect on the entire U.S. industry as products are subject to strict sanctions resulting in costly testing and lengthy delays at the port. Regarding those agrochemicals not included in the positive list, MHLW has established a uniform limit of 0.01 ppm as the maximum allowable limit. MHLW also applies MRLs to some processed foods as well, mainly to simple processed foods like frozen vegetables and concentrated juice. To products like these, MHLW uses the MRLs of the raw ingredients after taking into consideration the processing factors such as concentration ratios and water content change. For more information about the positive list system, including the actual MRLs, visit the MHLW?s webpage in English at: http://www.mhlw.go.jp/english/topics/foodsafety/positivelist060228/index.html Japan?s Market for U.S. Beef On July 27, 2006, Japan reopened its market to U.S. beef, six and a half months after suspending imports due to a case of non-compliance under the Export Verification Program (EV) ? (See JA 6009). U.S. beef exported to Japan must be from cattle slaughtered at 20 months of age or below. The age limit creates a limited pool of cattle for the U.S. beef industry to draw from and is a constraint to exports that prevents the United States from reclaiming what was once a $1.6 billion market. So far, some progress has been made and the Japanese consumers and the industry have begun accepting U.S. beef. In 2008, Japan has imported 54,109 MT of U.S. beef valued at $303 million. Japan?s acceptance of international standards for the trade in beef is considered to be critical in order to reestablish previous trade volumes in the market. U.S. Advantages and Challenges The Japanese market offers a number of benefits to U.S. exporters, but it is not without difficulties. To put these opportunities in perspective, here is a list of the most important U.S. ?Advantages? and ?Challenges?: Table 1. Advantages and Challenges U.S. Advantages U.S. Challenges Strong yen versus weak dollar Increasing food safety awareness (BSE, U.S. food cost/quality competitiveness etc.), increasing demands for food quality Wide variety of U.S. products - from fresh, certifications and production information to ingredient, to processed Declining price competitiveness Reliable supply of U.S. agricultural Distance from Japan products Consumer antipathy toward biotech foods Advanced U.S. food processing and additives technology Japanese preoccupation with quality Positive images of America among the Consumers ?prefer? domestically Japanese - such as many of the tourist produced products (image problem with destinations imported food in general) Relatively low U.S. shipping costs High cost of marketing in Japan Science-based and transparent U.S. food Japan?s policy to increase food self- safety procedures sufficiency rate Growing Japanese emulation of U.S. Labeling laws that are often complicated cultural and food trends High duties on many products Japanese food processing industry seeking Differences in enforcement of port new ingredients inspection regulations Changes in the Japanese distribution Increasing competition with China system, which is getting similar to that of Competition with subsidized European the U.S. exports Low food self-sufficiency rate in Japan Exporters are often expected to commit to Higher farming costs in Japan special contract requirements and long- term involvement Demand for high-quality healthy and functional foods II. Exporter Business Tips The following are suggestions on exporting food products to Japan. They are organized under five topics: Dealing with the Japanese; Consumer preferences, tastes, and traditions; Export business reminders; Food standards and regulations; Import and inspection procedures. Dealing with the Japanese Japanese business people, no matter how Western they may appear, do not always approach business relations in the same way as Americans or Europeans do. Some differences are simply due to the language barrier; others are due to differences in deeply held traditions and practices. To help bridge the gaps, we suggest that you: Speak slowly and clearly, even if you know that your business counterparts speak English. Use clear-cut, simple words and expressions when writing in English. Use e-mail and fax, rather than telephone, whenever possible. Make appointments as far in advance as practical. Carry plenty of business cards (meishi). Present them formally at each new introduction?and be sure they have your personal information in Japanese on the back. Be on time for all meetings; the Japanese are very punctual. Be braced for negotiations which require a number of meetings and probably several trips to reach agreement. Be prepared for misunderstandings; use tact and patience. Be aware that in Japanese, ?Hai,? (yes) may mean, ?I understand,? not, ?I agree.? Limit the discussion of business at evening meals, or when drinking with new Japanese counterparts; these occasions are for getting to know one another and building trust. Be aware of major Japanese holiday and business break periods, e.g., the New Year holiday (approximately December 30 to January 3); Golden Week, a combination of national holidays (April 29 - May 5); Obon, an ancestor respect period lasting for about one week in mid-August during which many companies close and business people take vacations. Consumer Preferences, Tastes and Traditions These ideas may help you focus your product approach. Japanese consumers: Are very concerned about food safety and traceability ? commonly used terms are ?Anzen? and ?Anshin? that, respectively, mean ?safety? and ?peace of mind? regarding safety; Place great importance on quality?producers that fail to recognize this will not succeed; Appreciate taste and all of its subtleties?and will pay for it; Are well-educated and knowledgeable about food and its many variations; Are highly brand-conscious?a brand with a quality image will sell; Care a great deal about seasonal foods and freshness?awareness and promotion of these characteristics, where appropriate, can significantly build product sales and value; Are increasingly health-conscious?(Witness the many TV programs about healthy food. When a product's health attributes are highlighted on such a program, it quickly sells out at the supermarkets.) Japanese consumers also: ?Eat with their eyes? and often view food as art. A food product?s aesthetic appearance?on the shelf, in the package, and on the table?is very important in building consumer acceptance. Have small families and homes with minimal storage space; thus, large packages are impractical. Again, as in the United States, there are differences in regional food-related practices, preferences, and tastes. To illustrate, a comparison between the Kanto and Kansai regions is in the chart below. Table 2. Differences in Food Preferences by Region Tokyo (Kanto region) Osaka (Kansai region) Less food cost conscious More food cost conscious More salty foods Less salty foods More spicy products Less spicy products More Western products Less Western products More cuisine variety More traditional Japanese foods Prefer pork Prefer beef Prefer buckwheat soba noodles Prefer wheat udon noodles Export Business Reminders Below are some important reminders about exporting to Japan: Before coming to Japan, gather information on Japan by using U.S. sources such as the Foreign Agricultural Service, state agricultural offices, state/regional trade organizations, and JETRO (Japan External Trade Organization) regional offices in the United States (see Appendix D). Build at least a minimum team within your company to focus on the Japan market. Limit your number of trading partners, but try to avoid exclusive agreements with any one company. Use metric terms. Quote CIF, unless the importer requests FOB pricing. Price competitively; exclude U.S.-based costs, e.g., domestic sales, advertising, marketing, etc. Be patient regarding requests for information on ingredient lists, production process, and quality assurance. Ensure that all the information is correct. Respond to such requests with diligence and in a timely fashion. Use letters of credit to reduce risk. Hedge export values with your U.S. bank if you are concerned about exchange rate risk. Set up wire transfers for payments. Food Standards and Regulations U.S. exporters often find Japanese food standards difficult to deal with. Here are a few tips: Read the Japan Food Sanitation Law, http://www.jetro.go.jp/en/reports/regulations/pdf/food-e.pdf Read the USDA?s ?Japan: Food and Agricultural Import Regulations and Standards (FAIRS) Country Report 2009.? This concise document, covering food laws, labeling, packaging, import procedures, and other key regulations, should be a helpful guide for all food exporters. It not only explains the basics, but also provides specific contact information for all the relevant import agencies. It is updated annually. Read other USDA Japan reports and information. Go to the USDA Japan homepage (http://www.usdajapan.org ) and click the "Reports" menu button to get more market information and reports. Check the JETRO report, ?Specifications and Standards for Foods, Food Additives, etc. Under the Food Sanitation Law? (http://www.jetro.go.jp/en/reports/regulations/). This summarizes specific technical import procedures especially for processed food products. Carefully check your food additive admissibility: e.g., preservatives, stabilizers, flavor enhancers. Visit the Ministry of Health, Labor and Welfare?s website at http://www.mhlw.go.jp/topics/yunyu/5/dl/a3.pdf. Ensure that the labeling you plan to use meets Japanese requirements (Food Sanitation Law). Verify all relevant import requirements with your Japanese customers. They will normally have the most updated information on Japanese regulations. Provide a detailed list of product ingredients to your Japanese partners to allow them to verify their acceptability. Do not assume that U.S. approval means Japanese approval. For organic foods in the United States, make sure you obtain USDA?s National Organic Program approval. Then, working with your importer, you can register your product under the Japan Agriculture Standard (JAS) before exporting it to Japan. Visit the following website for more information: NOP Export Arrangement with Japan (http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELDEV3017307&acct=nopgeninfo) After you have completed the above steps, check with the Agricultural Affairs Office at the U.S. Embassy in Tokyo (agtokyo@fas.usda.gov) with any remaining questions on issues such as standards, tariffs, regulations, labeling, etc. Depending on content, the ATOs in Japan may also be able to directly respond to your inquiries. Import and Inspection Procedures Your job is not complete when your product has been ordered and shipped. You still must get it through Japanese customs and port inspectors. The points outlined below should aid in this process: Review the USDA?s ?Japan: Food and Agricultural Import Regulations and Standards (FAIRS) Country Report 2009? to get a better understanding of these procedures. Know the specific tariffs that apply to your product before pricing to potential customers. Remember that tariff rates in Japan are calculated on a CIF basis, and that Japan adds a 5% consumption tax to all imports. Do not send samples for preliminary checking without an actual request from your importer. Recognize that customs clearance officials? application of the law and interpretation of regulations may differ from one port to another. Thus, the least expensive or most convenient port may not be the best choice. Check with your local customer or in-country agent representative. Be sure to complete all documentation thoroughly and accurately. Send copies of documentation in advance especially for the first-time shipments, which can assist your importer in getting timely release of cargo from customs and clarifying matters with quarantine officials. For fresh products, check phytosanitary and other requirements in advance and obtain proper USDA inspections in the United States (see Appendix D of this report, www.aphis.usda.gov, and www.fsis.usda.gov). Approval for biotech agricultural products and ingredients is regulated by the Japanese Government. These products will also require specific labeling to be admitted to Japan. Make sure you have the proper import documents accompanying shipment: 1) Import Notification; 2) Health Certifications; 3) Results of Laboratory Analysis; 4) Manufacturer?s Certification showing materials, additives and manufacturing process. (Note: Products imported for the first time may require more documentation.) III. Market Sector Structure and Trends The exporter?s single most important strategic decision?other than those dealing with the product itself?is how to position the product and get it to the Japanese consumer, i.e., through retail, food service, and/or food processing channels. The following is the brief description of the three sectors by channel. Retail Sector Japan?s food retail market generated about $400 billion in 2008. Although it is a huge market, it is highly fragmented. Unlike in North America and the EU, Japan?s retail food sector is characterized by a relatively high percentage of specialty/semi-specialty stores, including ?mom-and-pop? stores and local grocery stores. Such small retailers, however, are losing ground to larger general merchandise stores (GMS), supermarkets (SM), and convenience stores (CVS). These three categories, in particular, offer excellent opportunities to U.S. food exporters in spite of severe competition with their counterparts from China, Europe, Australia, and New Zealand as well as domestic manufacturers. Food retailers in Japan are classified into five major segments. The characteristics of these channels are listed in the following table: Table 3. Retail Store Opportunities for U.S. Food Exporters GMS SM Department CVS Specialty Semi General Supermarkets Stores Convenience Stores Specialty Merchandise stores Stores stores Share (2008) 19.1% 5.2% 12.4% 63.3% Future growth M H to M L to M H D D expectations* Receptivity to imports** H to M H to M M H to M M M Especially suitable for: Established brands H to M H to M H M M M High quality/high price H to M H to M H H to M M M Good quality/low price H H M H M M New products H H H H M M *Growth expectations: H - high; M - moderate; L - low; D - decline **Receptivity ratings: H - high; M - medium; L ? low Sources: METI Commercial Census (2008); ATO estimates on import growth and receptivity. Chart 1. Retail Food Distribution Channel Source: METI Commercial Census (2008) General Merchandise Stores: General merchandise stores (GMS), together with supermarkets, are often referred to as ?super? in Japan. Japan?s GMS, like super centers in the United States, offers shoppers the convenience of one-stop shopping for groceries, perishables, clothing, household goods, furniture, and electrical goods. Food turnover, which typically used to make up one third of the total sales at GMS?s, now reaches a half of the total sales or even more at some chains. GMS?s are operated by major national chains (Appendix A-1) that have nationwide networks with hundreds of outlets. Central purchasing is typical in these stores. GMS?s are generally receptive to foreign products, although they often demand product modification to suit market tastes and preferences. They often purchase foreign products via trading companies. Inventory risks, long lead times, and communication problems make GMS buyers hesitant to import products directly. However, as Japan?s retail market becomes more competitive, GMS?s are open to new products and offer excellent opportunities to U.S. food exporters. Supermarkets: Supermarkets (SM) stores are smaller in size than those of GMS?s and are more specialized in food and household goods. On average, food items such as perishables, readymade-meals, bakery, and refrigerated foods account for 70% or more of the total sales of the stores. Supermarkets are facing higher purchasing costs than GMS stores. They are seeking a way to survive in the market by product/service differentiation, private brand development, and global sourcing. To gain economies of scale, regional supermarkets are forming alliances, such as joint merchandising companies, with non-competing retailers. Thus, although individual retailers are not large enough to engage in direct offshore sourcing, through joint merchandising companies, they offer excellent opportunities to U.S. food exporters. These retailers carry imported products particularly as a mean to differentiate themselves from other competing stores in their region. Department Stores: Department store sales have been declining in recent years due to the economic downturn as well as to increasing competition with GMSs and other retailers. Food sales at department stores currently account for only 5% of the total retail food sales. Nevertheless, department stores offer excellent opportunities for imported high-end food products. They are an under-exploited channel for U.S. exporters (Appendix A-2). Most department stores have extensive basement concessions (i.e., small, independently operated retail stands), otherwise known as ?depachikas?. There are also outlets operated by department stores themselves, offering an opportunity for U.S. exporters to launch pilot stores or to conduct marketing trials. Department stores provide a showcase of imported, novelty, and high-end products and thus provide U.S. exporters of high-quality and fancy foods with excellent opportunities. Convenience Stores: Convenience stores (CVS) are becoming an extremely important sales channel in Japan. Convenience stores or ?conbini? in Japanese, have small floor space, about 100 m² on average, and typically stock about 3,000 products. They are well known for their high turnover and advanced inventory management. Convenience stores derive their competitive advantage from high turnover and efficient supply chains. Thus, short lead-time and nationwide distribution are essential in dealing with major CVS operators. While this presents a significant challenge to many overseas companies, indirect business with CVS, nevertheless, offers huge potential to them. Global sourcing of ingredients and raw materials, especially for the use of fast food, has become more popular. CVS operators not only work with consumer product manufacturers but also with trading firms and ingredients manufacturers. In order to differentiate themselves from their competitors, major CVS operators are constantly searching for novelty and new concepts, which offer good opportunities to U.S. food exporters. Local General and Specialty Stores: Predominantly, Japan?s food retail trade still consists of local specialty stores and grocery shops, most of which are small, family-run operations. These retailers, however, offer limited market potential to exporters. They are served by secondary or tertiary wholesalers, which, in turn, are supplied by Japan?s major wholesalers. This sector has been shrinking rapidly as the food market has become more competitive. Deregulation of liquor licensing, for example, has led to the closure of many small family-owned liquor shops. Only a small group of retailers specialized in imported products in Tokyo and other metropolitan areas may be able to offer opportunities to U.S. exporters. Home Meal Replacement (HMR) Sector: As in North America and the EU, the growth of HMR sector is one of the most important developments in the Japanese food sector in recent years. Examples of popular products in this sector are prepared foods sold at supermarkets, takeout meals sold at specialty store chain operators, and various readymade foods sold at convenience and department stores. (There is thus some overlap with the channels outlined above.) Although the growth in the HMR sector is slowing down as well due to the current sluggish economy in Japan, the sector is expected to be an important market as the number of working women, single households and the elderly rises. The sector consists mostly of small regional companies and is now going through a series of consolidation. Larger companies in the sector supply major supermarket operators and convenience stores, and tenants in department stores. There are a number of constraints facing U.S. exporters in this sector. High-volume buyers are still relatively rare; global sourcing and direct transactions with foreign suppliers are also uncommon. In addition, relatively high turnover for menu items often makes companies hesitant about global merchandising. Nevertheless, HMRs are potentially an ideal customer for U.S. food exporters, especially for those willing to meet stringent cost, quality, and size specifications. The major HMR producers are listed in Appendix B-3. Overall Trends in the Retail Sector: Private branding, which appeared in the market in the past based on only a low-price strategy and failed, now has settled back into the market. Not only offering low price, private branding in Japan also places more emphasis on quality and safety assurance. Gaining in popularity among Japanese consumers, private branded products are now found at most of the national chain stores, high-end urban retailers and member stores of group cooperatives. The competition among GMS, Supermarkets, Department stores and Convenience stores has created pressures on Japan?s traditional distribution channels to adapt to retailer?s needs. Generally, to remain viable, these retail segments are required to pay constant attention to maintaining a large variety of products on the shelves and to be able to adjust quickly to popular consumer trends. To do this, these retailer segments can no longer depend on a distribution channel that does not quickly respond to these requirements. As a result, the GMS segment has continued the trend of increasing direct procurement from producers and/or contracted with certain wholesalers to serve as their own intermediary. In response, smaller less efficient providers in the distribution channel are in the midst of mergers or acquisitions for improved economies of scale HRI Food Service Sector The food service sector, which generated $234.4 billion in sales in 2008, encompasses four major segments: 1) restaurants; 2) hotels and other accommodation facilities; 3) bars and coffee shops; and 4) institutional food service companies serving schools, hospitals, and corporate facilities. The characteristics of the four segments are summarized in the following table. Table 4. Food Service Opportunities for U.S. Food Exporters Restaurants Hotels/ Bars/ Institutional Travel related Coffee shops Share (2008) 52.7% 13.2% 20.5% 13.6% Future growth expectations* H to M H H to M M Receptivity to imports** H H H to M H Especially suitable for: High quality/high price H to M H M L Good quality/low price H H H H New products H H H H *Growth expectations: H-high; M-moderate; L-low; D-decline **Receptivity ratings: H-high; M-medium; L-low Sources: Food Service Industry Research Center; ATO estimates of import growth and receptivity). Chart 2. Food Service Distribution Channel (2008) Source: Food Service Industry Research Center Table 5. Share of Restaurant Sales by Type of Outlet (2008) General restaurants 70.7% Noodle shops 8.4% Sushi shops 10.7% Others 10.2% 100.0% Source: Food Service Industry Research Center Restaurants: The restaurant segment offers the best export prospects to the United States among the four food service segments. This segment generates more than a half of the current food service sales and comprises four main types of outlets as shown in the Table 5. The restaurant segment generated approximately JP¥12.87 trillion (US$ 126.44 billion) in sales in 2008, 0.9% increase following an increase of 0.2% in the previous year When looking into the figure in detail, ?General restaurants? increased their sales by 0.9% and ?Others? including fast food shops showed an increase of 3.3%, while both ?Noodle shops? and ?Sushi shops? declined by 0.2% and 0.1% respectively. Due to the current bad economy in Japan, fast food shops, which offer low-priced menu, showed a strong growth. s with the retail sector, the HRI sector is quite fragmented and most restaurant businesses are quite small. However, small, family-owned restaurants have been disappearing rapidly due to increased competition with HMR, food retailers, and restaurant chain operators. Several major ?family restaurant? chains are increasingly important for U.S. exporters. Because they compete primarily on price, they are active in global sourcing. These chains thus represent a significant opportunity to U.S. food exporters. Chain restaurants are particularly interested in semi-processed or precooked foods. Premixed ingredients, seasonal fruits and vegetables, specialty sauces and seasonings, and desserts are particularly attractive products for chain operators. Japan has a large and competitive fast food segment made up of both domestic and overseas operators. N Most gyudon (beef bowl) restaurant chains have long been big U.S. beef buyers, and they suffered major losses from the ban on U.S. beef imports due to BSE. Generally, fast food restaurant operators are volume buyers of specific raw materials. In addition to low cost, suppliers must provide a stable supply of products at a specific quality to compete effectively in this segment. Exporters can approach most large restaurant chains directly but for the smaller chains, exporters must build relationships with trading companies or major food service wholesalers. Hotels and travel and entertainment-related: Major hotels are attractive markets for U.S. exporters. They are more oriented toward Western food and frequently have ?food fair? promotions featuring a variety of countries? cuisines. Exporter?s challenge lies in developing effective distribution channels to reach them. Hotels offer high consumer visibility and thus promotional value for exporters. Highlighting the fact that a particular exporter?s product is used by a major upscale hotel chain, for example, is a good way to promote the product to retailers and other prospective buyers. Railway companies and airlines operate kitchens in Tokyo and Osaka, while the overseas airlines tend to use contract caterers. These Japanese companies tend to emphasize Japanese cuisine and thus are less receptive to imported Western products. Theme parks are also an important part of the sector. Restaurants and snack outlets at both Tokyo Disneyland and Universal Studio Theme Park, for example, draw millions of visitors every year. Other theme parks around the country also attract thousands of visitors a day and offer opportunities to U.S. food exporters. Bars and coffee shops: These establishments account for 20.5% of the total food service sales. The sales from the segment showed 1.5% decrease in 2008 following 4.1% decrease in the previous year. While foreign chains such as Starbucks have made significant inroads in Japan over the last few years, coffee shops in general were hit by a major blow showing a decrease of 4.4% due to the bad economy in Japan. Still the segment is a major market for foreign beverages and snack foods. Institutional food markets: The institutional market comprised of cafeterias at factories, offices, hospitals; and school cafeterias generated $31.77 billion in 2008, accounting for 13.6% of the total food service sales. The operations of the institutions are typically served by contract caterers. Building relationships with caterers is, therefore, essential to crack this market. Both contract caterers and institutions with their own kitchens are typically serviced by large food service wholesalers. Because the most important criterion for institutional suppliers is cost competitiveness, the sector offers huge market potential to U.S. exporters, which often enjoy significant advantages in this respect. The institutional catering market shrank in 2008 mainly due to the sluggish economy, characterized by corporate layoffs, consolidation of offices and factories, and cutbacks in corporate fringe benefits. However, long-term prospects are brighter as higher demand from contract caterers serving the hospital and social welfare segments is expected. This growth will be driven by an aging population, reforms of the medical insurance program for the elderly, and the launch of a nursing care insurance program. Food Processing Sector Appendix C lists important food manufacturers in several food sectors. These food processors offer a number of opportunities to U.S. exporters, and they have the capacity to buy the following types of products from overseas: Ingredients for production in Japan; Finished products to be sold under their own labels; Finished products to be sold under the exporter?s brand, but distributed through the importer?s channels. Dealing with food processors offers advantages as follows: They often buy in large volume; They have sophisticated distribution systems; They have a good understanding of their suppliers? businesses. Be prepared for requests from Japanese manufacturers, as they are very demanding regarding the release of data on product quality, scientific data, origin of ingredients, and other related information. In large part, the trend in regulations from the Government of Japan requires manufacturers to protect themselves from risks. Such information is also increasingly important because of recent food scandals in Japan, and growing concerns about food safety and traceability among Japanese consumers. U.S. exporters must be prepared to deal positively and promptly with these issues to compete in this market. For more information on this segment, please read the Japanese Food Processing Sector Report produced by the ATO in Tokyo, Japan (http://www.fas.usda.gov/gainfiles/200703/146280587.pdf). Online Sales in Japan In 2008 the total number of Internet subscribers in Japan reached 94 million, almost doubled since 2000, when the number of users recorded 48 million. Nowadays, the use of the Internet is getting more and more popular among Japanese people and e-commerce is gaining popularity as well. Food is one of the main items sold on the Internet. According to a survey conducted by Yano Research Institute, the food sales of GMS, supermarket and CVS through the Internet is increasing and recorded $222 million in 2008, with its sales expected to grow 26% to reach $280 million in 2009. Food sales through the Internet are expected to grow rapidly for years to come. The mainstay of the growth of the food sales on the net is considered to be organic food and natural food. The following table shows some of the main websites selling food products. Table 6. Japan Websites Selling Food Products Company Name Site Address Rakuten http://www.rakuten.co.jp/ e-Yukiseikatsu http://www.eu-ki.com/ Oisix Co., Ltd. http://www.oisix.com/ Pal System Consumers Cooperative Union http://www.pal.or.jp/group/ Radish Boya http://www.radishbo-ya.co.jp/ Polan Organic Farming Association (POFA) http://www.pofa.jp/ Tengu Natural Foods http://www.alishan.jp/shop/nfoscomm/catalog/ Population Trends Japan?s population has undergone dynamic shifts in age proportions since the 1980?s with decreasing number of births and a growing aging population. Until recently, Japan had been experiencing small but steady annual population growth. It was not until the first half of 2005 that Japan experienced negative population growth, when the number of deaths outnumbered the number of births. According to MHLW, Japan experienced a -0.01% population decline in 2005 for the fist time since 1988 when Japan began compiling population statistics. In 2009, Japan?s population began at 127.6 million. By the year 2050 Japan?s population is predicted to decrease to 95 million, with the ratio of individuals over 65 climbing from 7% (in the 1970?s) to 40%. IV. Best High-Value Import Prospects The following presents a list of products, which at the present time we believe can be considered ?best? import prospects. They were selected based on a number of criteria?high volume, demonstrated growth, and U.S. competitiveness. Table 7. Best Import Prospects Product HS Code 2007 2007 World 5-Yr Avg. Import Tariff Rate Key Constraints to Market Category Market Imports Annual Market Development Attractiveness for Size (1,000 (1000 MT) Import U.S.A. MT) Growth Pork 0203 1627 755 -3% JPY361~482 per kg Currently, market In 2008, pork growth of U.S. beef is imports from Jan- not expected to effect Jul have increased consumption of pork, by 22% from but if Japan were to 2007. This is end age restrictions on mainly due to beef, pork increased consumption would production and fall. feed cost of domestic producers. Snack Food 1905.90 2106.90.92 327 106 47% 6%~34% Snack food companies Suppliers that can (excl nuts) 4 have had products offer custom pulled from shelves packaging and due to Chinese tainted flexibility on milk scandal. ingredients and This could affect U.S. production process suppliers who use milk will have greater products from China success over as ingredients. others. Products containing healthy, functional ingredients have stronger consumer appeal. Frozen 0710 2004 871 773 11% 6%~23.8% Recent pesticide The market for Vegetables contamination in imported frozen Chinese food products vegetables has may deter consumers quadrupled over from purchasing the last 20 frozen food years. As Products. Also, Japanese Japanese frozen food consumers companies are become more becoming more active familiar with frozen overseas to bring foods, demand will frozen products into increase. Also, the Japan. U.S. is the largest supplier of frozen potato products. Peanuts 1202 36 -4.74% JPY617~726 per kg For around 12 months, Because of the and/or 10% starting in late 2007, problems with China halted exports Chinese peanuts, to Japan of large size Japanese peanuts due to the importers want to increase in pesticide expand their supply violations. of peanuts to Peanuts from China include countries are inexpensive other than China. compared to peanuts This situation from the United creates States. opportunities for MRL and aflatoxin are U.S. exporters. barriers for U.S. shellers to meet Japanese regulations High Quality 2009 901,673 KL 321673 KL 31% JPY23~27 per kg or Strong competition World imports are Natural Fruit 5.4%~29.8% from China and Brazil, increasing in Japan Juice with some lesser- as consumers producing countries become more gaining market share health conscious. as well. Imports from the U.S. increased by 22% in 2007, and are expected to increase in 2008. Orange and grapefruit juice have the largest share. Berries 0810.20 0810.40 6.2 4.7 38% 6%~9.6% The U.S. market share Varieties falling 0811.20 of imports has under HS code decreased from 40% 0810.20 have seen to 32% in the last 5 a steady increase years, and world over the last 5 imports are expected years. to be low in Increasing 2008. Promotional competition from effort is needed. Mexico is still minor. 0801 0802 79 65.6 -24% Free~12% While there is currently Increasing T limited competition consumer ree Nuts from other countries, awareness and U.S. producers should health benefits of keep safety issues a nuts has increased top priority to ensure consumption U.S. exports to Japan recently. Producers remain high. should continue promotion in baking and confectionary sectors, as well as exploring new sectors. Wine 2204 239,796 KL 174.441 KL 0.25% 15% or JPY125 per Japanese wine market Total imports have liter, whichever is the is very competitive, remained stable, less, subject to a with France and Italy confirming that the minimum customs duty leading exports Japanese wine of JPY67 per liter. respectively. The U.S. market has following with 14.6% of recovered. The the import market in value of U.S. 2007. While the U.S. imports has has excelled in the increased due to lower end of the marketing market, the programs, the development of mid- strong yen, and range products will be increasing sales of a challenge for the more moderately United States. priced New World and California wines. Pet Food 2309 773 407 -8% Free~PY59.5 per kg, Contaminated pet food While the number plus JPY6 for every 1% from China has led the of pets in Japan is exceeding 10% by Japanese government increasing, pet size weight of lactose to create regulations is decreasing, contained. for per food applying to resulting in less manufacturing, import consumption. U.S. and producers should distribution. Producers concentrate on should be sure their high-quality products comply. products for smaller animals. Cakes, 1905 608 112 51% 9%~29.8%% Rising price of inputs The average price Waffles, Pies has decreased total for U.S. products world exports to remains competitive Japan. China has with China, possible increased market allowing the U.S. to share while U.S. acquire market market share has share in the wake declined over the last of Chinese tainted 5 years. food scandals. Salmon 0302.12 0303.11 387 152 -17% 3.5% Farm raised frozen There is an 0303.19 0303.22 Salmon from Norway increase in the and Chile continues to demand for U.S. dominate the market ?natural? and ?wild? along with an increase salmon as opposed in fresh salmon to the farm raised exports from Canada. salmon. Seasonal Prices have risen due promotion remains to the increase in a plus. global oil prices. Reduction in Japanese fish purchases due to a shift towards increased meat consumption. Non- 2202.90 2209.00 74,862 KL 72,675 KL 107% 9.6%~13.4% Competition from the Market is alcoholic major Japanese continually growing Beverages domestic brands and with a strong the growing variety of demand for health other imported non- conscious and diet alcoholic beverages. drinks. The higher cost of beer and other alcoholic beverages will result in the continued attraction of these alternative products. Functional -- JPY1.2 -- -- See specific product Japan has important The market is Foods trillion category food standard growing very requirements that rapidly, increasing must be met. For the 61% in the past 6 Japanese to recognize years. The aging any new beneficial population is a aspects of food, growing segment of scientific evidence, interest, as well as education and products targeting promotion is specific health necessary. conditions. Food 2106.9 -- 369 36% 9%~29.8% Health issues are a Key market drivers Preparation +JPY1,159per kg major concern in such as declining Products Japan. Japanese home cooking and consumers consider greater demand for Japanese products to convenience and be safer than over- ready-to-eat foods seas products, so indicate that producers should make demand for sure their products processed food comply with Japanese products should regulations and be continue to grow for willing to tailor their the foreseeable product to the future. Japanese market. Craft Beer 2203 3,491,118 31,830 KL -11% Free Japanese government Redevelopment KL imposes higher tax on projects create new beer compared with pubs and other liquors. restaurants Five major domestic increasing brewers control 98.4% opportunities for of the beer market craft beer. Holidays and special occasions offer good times to market high quality products. Sources: ATOs; Ministry of Agriculture, Forestry and Fisheries; Ministry of Economy, Trade and Industry; Ministry of Finance; Japan Frozen Food Association; Chocolate and Cocoa Association of Japan; Pet Food Manufacturers Association; Zenkoku Seiryou Inryou Kogyokai; Fuji Keizai; Brewers Association of Japan. Note: The 2007 market size is an estimate made by ATO. V. Key Tables and Charts These following tables and charts are included to provide U.S. exporters with a better understanding of Japanese food market and economy. Table A. Key Trade & Demographic Information Data is for 2008 Agricultural Imports From All Countries ($Mil)/U.S. Market Share (%) $79,200 / U.S.24.59% Consumer Food Imports From All Countries ($Mil)/U.S. Market Share (%) $26,770 / U.S. 19.93% Edible Fishery Imports From All Countries ($Mil)/U.S. Market Share (%) $14,053 / U.S. 10.69% Total Population (Millions)/Annual Growth Rate (%)/1 127.69. /- 0.06% Number of Major Metropolitan Areas 12 P /2er Capita Gross Domestic Product (U.S. Dollars) $34,200 est. Unemployment Rate (%)/3 4.0% Percent of Female Population Employed/4 46.6% Exchange Rate (Japan Yen per US$ /5) 104.23 (Ann. Avg.) Statistics Bureau, Ministry of Internal Affairs and Communication; U.S. Bureau of Labor Statistics 1/Total Population/Annual Growth Rate: http://www.stat.go.jp/english/data/jinsui/2008np/index.htm 2/CIA World Fact book, and the National Institute of Population and Social Security Research GDP Per Capita: https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html 3/ Unemployment Rate: http://www.stat.go.jp/english/data/roudou/154b.htm 4/Percent of Female Population Employed: http://www.stat.go.jp/english/data/roudou/154b.htm *Percent of women in the labor force (15 years old or older). 5/Exchange Rate: http://www.customs.go.jp/toukei/info/index_e.htm Table B. Consumer Food and Edible Fishery Product Imports Japanese Imports Imports from the World Imports from the U.S. U.S. Market Share % (in Millions of Dollars) 2006 2007 2008 2006 2007 2008 2006 2007 2008 CONSUMER-ORIENTED AGRICULTURAL TOTAL 22,924.99 23,964.73 26,770.13 4,218.53 4,525.64 5,336.42 18.40 18.88 19.93 Snack Foods (excl Nuts) 476.15 518.78 590.09 39.22 40.51 41.25 8.24 7.81 6.99 Breakfast Cereals & Pancake Mix 14.95 16.32 16.29 3.22 2.72 2.31 21.56 16.63 14.16 Red Meats, Fresh/Chilled/Frozen 5,715.85 5,972.38 6,874.68 1,223.79 1,493.35 2,133.85 21.41 25.00 31.04 Red Meats, Prepared/Preserved 1,955.77 2,027.34 2,177.90 206.39 248.75 313.67 10.55 12.27 14.4 Poultry Meat 744.04 752.29 1,376.79 33.85 40.17 50.08 4.55 5.34 3.64 Dairy Products 407.37 553.93 669.35 60.03 74.56 129.95 14.74 13.46 19.41 Eggs & Products 114.58 123.53 116.37 36.85 31.15 42.80 32.16 25.22 25.73 Fresh Fruit 1,523.65 1,577.65 1,787.26 435.03 414.96 418.43 28.55 26.30 23.41 Fresh Vegetables 827.67 661.93 591.43 116.06 98.65 90.24 14.02 14.90 15.26 Processed Fruit & Vegetables 3,381.06 3,430.39 3,399.72 588.37 612.46 674.39 17.40 17.85 19.84 Fruit & Vegetable Juices 632.00 783.53 806.06 102.98 135.92 130.63 16.30 17.35 16.21 Tree Nuts 378.13 347.46 345.65 230.61 212.05 199.44 60.99 61.03 57.7 Wine & Beer 1,229.32 1,317.61 1,406.95 69.55 76.26 79.36 5.66 5.79 5.64 Nursery Products & Cut Flowers 479.80 509.83 535.75 8.23 8.68 8.20 1.72 1.70 1.53 Pet Foods (Dog & Cat Food) 699.99 681.65 795.63 220.01 175.00 199.63 31.43 25.67 25.09 Other Consumer-Oriented Products 3,621.97 3,848.45 4,225.40 810.43 817.12 768.63 22.38 21.23 18.19 FISH & SEAFOOD PRODUCTS 13,523.12 12,763.90 14,052.57 1,256.13 1,171.04 1,502.04 9.29 9.17 10.69 Salmon, Whole/ Eviscerated/Canned 764.31 756.44 784.61 84.38 94.90 95.36 11.04 12.55 12.15 Crustaceans 3,991.10 3,673.02 3,827.85 90.65 67.25 112.54 2.27 1.83 2.94 Surimi (Fish Paste) 691.58 706.58 1,049.02 263.34 256.14 366.31 38.08 36.25 34.92 Molluscs 1,281.58 1,252.23 1,285.93 46.08 45.56 42.26 3.60 3.64 3.29 Other Edible Fish & Seafood 4,538.17 4,197.71 4,536.76 472.71 416.92 520.47 10.42 9.93 11.47 AGRICULTURAL PRODUCT TOTAL 39,384.38 43,601.34 54,019.35 10,183.90 12,456.77 17,085.46 25.86 28.57 31.63 AGRICULTURAL, FISH & FORESTRY TOTAL 64,750.77 68,138.03 79,199.89 12,326.06 14,501.85 19474.84 19.04 21.28 24.59 Source: World Trade Atlas Table C. Top 15 Suppliers of Consumer Foods and Edible Fishery Products Japan - Top 15 Suppliers CONSUMER-ORIENTED AGRICULTURAL IMPORTS FISH & SEAFOOD PRODUCTS $1,000 2006 2007 2008 $1,000 2006 2007 2008 United States 4,218,526 4,525,641 5,336,421 China 3,147,946 2,695,145 2,430,397 China 4,253,272 4,213,625 3,695,592 United States 1,256,133 1,171,038 1,502,042 Australia 2,835,087 2,834,009 2,955,101 Russia 982,872 1,018,159 1,281,548 Thailand 1,310,049 1,365,849 1,904,564 Thailand 954,888 971,524 1,113,153 Brazil 899,941 963,366 1,550,994 Chile 911,921 885,811 943,002 France 1,369,693 1,481,741 1,541,726 Vietnam 789,917 688,417 755,695 New Zealand 985,461 1,047,432 1,195,466 Indonesia 697,353 692,798 731,254 Canada 932,253 973,084 1,134,581 Korea South 567,764 526,323 652,420 Denmark 898,955 866,155 975,290 Norway 381,987 441,791 576,787 Philippines 655,191 705,232 917,979 Taiwan 626,584 552,137 564,038 Italy 477,441 533,742 652,792 Canada 434,282 410,963 441,491 Mexico 428,683 471,779 583,418 India 307,233 299,697 310,413 Korea South 461,842 466,379 542,627 Australia 305,982 298,820 290,763 Netherlands 408,631 471,159 496,686 Philippines 175,535 166,632 191,944 Singapore 290,269 343,924 464,233 Spain 107,993 112,749 166,725 Other 2,499,694 2,701,617 2,822,658 Other 1,882,933 1,815,470 2,100,902 World 22,924,988 23,964,734 26,770,128 World 13,523,116 12,763,900 14,052,574 Source: World Trade Atlas Chart 1. Japanese Food Import Mix from All Sources Source: UN Trade Statistics, JBICO, World Trade Atlas Chart 2. Trends in U.S. Shares of Japanese Food and Agricultural Imports Sources: World Trade Atlas; Japan Customs. Chart 3. Exchange Rate (JPY per US$) 1997-2008 Source: Ministry of Finance Chart 4. Japan?s Food Expenditure Compared to the United States Sources: U.S. Department of Labor; Ministry of Internal Affairs and Communications Chart 5. Japanese Food Self ?sufficiency Rate and Declining Farmer Population (1990-2005) Sources: MAFF Japan Chart 6. Japan?s Population Growth and Expected Decline Source: National Institute of Population and Social Security Research. Chart 7. Japanese Unemployment Rate 1998-2008 Source: Ministry of Internal Affairs and Communication Appendix A. Japanese Retailers - 2008 Average Exchange Rate of Y104.23 is used for both Appendix A and B Table A-1: Top 10 Supermarkets (2008) Rank Company Sales US$ No. of Location Telephone/Fax URL Address Name bil. Outlets Tel: 81(0)43-212-6000 Fax: 81(0)43-212-6849 1-5-1 Nakase, Mihama-ku, 1 Aeon Retail 19.52 569 Nationwide www.aeon.info Chiba 261-8515 Tel: 81(0)3-6238-2111 Fax: 81(0)3-3459-6873 4-1-4 Shiba-Koen 2 Ito-Yokado 14.03 179 Nationwide http://www.itoyokado.co.jp/ Minato-ku, Tokyo 105-8571 Tel: 81(0)587-24-8111 Fax: 81(0)587-24-8024 1 Amaike-Gotandacho, 3 Uny 11.42* 229 Nationwide www.uny.co.jp Inazawa, Aichi 492-8680 Tel: 81(0)3-6388-7100 2-4-1 Shibakoen, Minato-ku, 4 Daiei 9.99* 207 Nationwide www.daiei.co.jp Tokyo 105-8514 Tel: 81(0)82-264-3211 2-22, Kyobashi-cho, Kinki, Fax: 81(0)82-26-5895 Minami-ku Hiroshima-shi, 5 Izumi 4.80* 83 Chugoku www.izumi.co.jp Hiroshima 732-0828 1-19-4 Higashi Nakajima Tel: 81(0)6-6815-2600 Higashiyodogawa-ku 6 Life Corp. 4.44 201 Nationwide http://www.lifecorp.jp Osakashi, 533-8558 Tel: 81(0)749-26-9610 31, Koizumi-cho, Hikone- 7 Heiwado 3.95* 104 Kinki, Chubu http://www.heiwado.jp/ shi, Shiga 522-0043 Tel: 81(0)6-6657-3310 1-4-4 Hanazono-Minami, Fax: 81(0)6-6657-3398 Nishinari-ku, Osaka 557- 8 Izumiya 3.66* 87 Kinki www.izumiya.co.jp 0015 Tel: 81(0)24-924-3211 2-18-2 Asahi, Gunsan-shi, 9 Yorkbenimaru 3.35 203 Nationwide http://www.yorkbeni.co.jp/ Fukushima-ken Tel: 81(0)3-3590-1110 5-51-12 Higashi-Ikebukuro, Fax: 81(0)3-3590-4642 Toshima-ku,Tokyo 170- 10 Maruetsu 3.28* 245 Kanto www.maruetsu.co.jp 8401 Sources: Nikkei Marketing Journal ?Retail Sector Ranking 2008? (June 24, 2009), and company annual reports. * Sales are shown by consolidated base. Table A-2: Top 10 Department Stores (2008) Rank Company Sales US$ *No. of Location Telephone/Fax URL Address Name bil. Outlets (Domestic) Tel: 81(0)6-6631-1101 Fax: 81(0)6-6632-5195 5-1-5 Namba, 1 Takashimaya 9.37* 20 Nationwide www.takashimaya.co.jp Chuo-ku, Osaka 542-8510 Tel: 81(0)3-3241-3311 1-4-1 Nihonbashi- Fax: 81(0)3-3242-4559 Muromachi, 2 Mitsukoshi 6.12 13 Nationwide www.mitsukoshi.co.jp Chuo-ku, Tokyo 103-8001 1-8-3 Chuo-ku Tel: 81(0) 6-6281-3111 Shinsaibashisuji 3 Sogou 4.63 28 Kansai www.sogo-gogo.com Osaka 542-0085 Tel: 81(0)6-6271-1231 Fax: 81(0)6-6245-1343 1-7-1 Shinsaibashi-Suji, 4 Daimaru 4.35 6 Nationwide www.daimaru.co.jp Chuo-ku, Osaka 542-8501 1-28-1 Minami Ikebukuro Kanto, Kinki, Tel: 81(0)3-3981-0111 Toshima-ku, Tokyo 171- 5 Seibu 4.32 28 Hokkaido http://www2.seibu.co.jp 8569 Tel: 81(0)3-3352-1111 3-14-1, Shinjyuku, Fax: 81(0)3-5273-5321 Shinjyuku-ku, Tokyo, 160- 6 Isetan 4.17 7 Kanto www.isetan.co.jp 8011 Hankyu- Tel: 81(0)6-6361-1381 8-7 Kakuta-cho 7 Hanshin 3.74 15 Kinki, Kanto Fax: 81(0)6-6486-6048 Kita-ku, Osaka 530-8350 www.hankyu-dept.co.jp Tel: 81(0)3-3477-3111 2-24-1 Dogenzaka, Fax: 81(0)3-3496-7200 Shibuya-ku Tokyo 150- 8 Tokyu 2.73* 11 Kanto www.tokyu-dept.co.jp 8019 Tel: 81(0)6-6624-1111 1-1-43 Abenosuji 9 Kintetsu 2.69* 13 Kinki www.d-kintetsu.co.jp/ Abeno-ku, Osaka 545-8545 3-16-1 Sakae, Kana-ku, TEL?81(0)52-251-1111 Nagoya-shi, Aichi- 10 Matsuzakaya 2.49 8 Nationwide http://www.matsuzakaya.co.jp/ ken 460-0008 Sources: Nikkei Marketing Journal ?Retail Sector Ranking 2008? (June 24, 2009), and company annual reports. * Sales are shown by consolidated base. Table A-3: Top 10 Convenience Stores (2008) Rank Store Name Sales No. of Location Telephone/Fax Address (Parent) US$ bil Outlets URL Seven-Eleven Tel: 81(0)3-6238-3711 2-8-8 Chiyoda (Seven &I www.sej.co.jp/english Chiyoda-ku, 1 Holdings) 26.50 12,382 Nationwide Tokyo 102-8455 Tel: 81(0)3-5435-2770 6th floor East Tower, Gate www.lawson.co.jp City Ohsaki, 1-11-2, Lawson Osaki Shinagawa-ku 2 (Mitsubishi) 14.96 9,527 Nationwide Tokyo 141-8643 Tel: 81(0)3-3989-6600 4-26-10 Higashi- Fax: 81(0)3-5396-1810 Ikebukuro, Family Mart www.family.co.jp Toshima-ku, Tokyo 170- 3 (Itochu) 11.95 14,651 Nationwide 8404 CircleK Sunkus Tel: 81(0)3-6220-9000 2-28-2 Shiba, Minato-ku, 4 (Uny) 8.55 6,166 Nationwide http://www.circleksunkus.jp/english/ Tokyo 105-8539 Mini-Stop Kanto, Tel: 81(0)43-212-6471 1-5-1 Nakase, Mihama-ku, 5 (AEON) 2.91 3,270 Tokai, Kinki www.ministop.co.jp Chiba 261-8515 Tel: 81(0)47-323-0001 Sun Plaza 35 Bldg., Daily Yamazaki Fax: 81(0)47-324-0082 1-9-2 Ichikawa, Ichikawa- 6 (Yamazaki) 2.06 1,647 Nationwide www.daily-yamazaki.co.jp shi, Chiba 272-8530 Tel: 81(0)11-511-2796 Park 9-5 Bldg., Nishi 6, Fax: 81(0)11-511-2834 Minami 9, Chuo-ku, 7 Seiko Mart 1.53 1,049 Hokkaido www.seicomart.co.jp Sapporo 064-8620 Tel: 81(0)3-5544-2610 13-1 Ichibancho, Chiyoda- AM/PM Fax: 81(0)3-5211-3593 ku Tokyo 102-0082 8 (Rex Holdings) 1.45 1,129 Nationwide www.ampm.co.jp Tel: 81(0)45-651-2111 17 Nihon-Odori, Naka-ku 9 Three F Co., Ltd. 1.08 650 Kanto www.three-f.co.jp/ Yokohama 231-8507 Tel?81(0)82-837-3500 665-1 Oazakuchi Asa-cho, Fax?81(0)82-837-3540 Asakita-ku, Hiroshima-shi, 10 Popu Hiroshima-ken 731-3395 lar 1.00 701 Nationwide http://www.poplar-cvs.co.jp/ Sources: Nikkei Marketing Journal ?Convenience Store Ranking 2008? (July 22, 2009), and company annual reports. Sales are shown by consolidated base. Table A-4: Top 10 Food Wholesalers (2008) Sales US$ Telephone/Fax Rank Company Name bil Location URL Address Tel: 81(0)3-3276-4000 Fax: 81(0)3-3271-6523 1-1-1 Nihonbashi, Chuo-ku, 1 Kokubu 14.12* Nationwide www.kokubu.co.jp Tokyo 103-8241 Tel: 81(0)3-3767-5111 Fax:81(0)3-3767-0421 6-1-1 Heiwajima, Ota-ku, 2 Ryoshoku 13.45* Nationwide www.ryoshoku.co.jp Tokyo 143-6556 Tel: 81(0)3-6859-1111 Fax: 81(0)3-3410-4626 3-1-3 Ikejiri, Setagaya-ku, 3 Nippon Access 13.12* Nationwide www.nippon-access.co.jp Tokyo 154-8501 Tel: 81(0)798-33-7650 9-20, Matsubara-cho, Fax:81(0)798-22-5637 Nishinomiya-shi, Hyogo 4 Kato Sangyo 6.15* Nationwide www.katosangyo.co.jp 662-8543 Tel: 81(0)6-6947-9811 Fax: 81(0)6-6947-9510 2-2-22 Shiromi, Chuo-ku, 5 Itochu Foods 5.80* Nationwide www.itochu-shokuhin.com Osaka 540-5822 Tel: 81(0)3-3273-4955 International Division Nihon Shurui Fax: 81(0)3-3273-1786 2-2-1 Yazsu, Chuo-ku, 6 Hanbai 4.82*
Posted: 24 December 2009

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