The food processing equipment market in Japan amounted to $4.29 billion in 2009, serving an important supporting role for the $240 billion food industry and $314 billion food service industry. U.S.-made food processing equipment enjoys certain advantages in the Japan market, including suitability to western cuisine served in many international hotels and restaurants, and process and cost efficiency when used in large-scale processing facilities. In addition, U.S.-made equipment complies with U.S. food safety standards, such as HACCP, FDA and ANSI – although these standards are not officially recognized in Japan, they are understood by market players as indications of quality and reliability. The March 11, 2011 disasters in Japan resulted in immediate demand for radiation monitoring equipment and the potential for demand in the seafood processing industry, particularly in the hardest hit coastal regions in northern Japan.
While the Japanese market for food processing equipment is highly competitive, U.S. firms offering advanced technologies and products have solid market potential. In order to access market opportunities, U.S. firms typically need a local representative, such as a distributor or trading firm specialized in machinery imports and knowledgeable about local sales networks, customer preferences, testing and certification requirements, etc.
According to the Japan Food Machinery Manufacturers’ Association (JFMA), annual sales of food processing equipment in Japan in 2009 amounted to 403.5 billion yen ($4.29 billion), down 9.9% from the previous year in yen terms, due to worsening economic conditions resulting from the earlier global economic crisis. At that time there were some signs of capital investments by the Japanese food industry for upgrading and expansion of production equipment, introduction of new products and improvement of quality control of existing products. However, shrinking consumer demand and trends toward low-cost products led to a decline in investments in plant and equipment in the Japanese food industry.
Although 2010 figures are not yet available, annual sales in 2010 are expected to be recorded at 436.8 billion yen ($4.96 billion), up 8.2% from the previous year. Also, according to the Ministry of Economy, Trade and Industry (METI), annual production in Japan of food products machinery amounted to 75.5 billion yen ($858 million) in 2010, up 20% from the previous year. [NOTE: METI surveys large firms, while JFMA collects industry data from some 150 member firms, including large, medium and small firms; Conversion rates: 94 yen/USD in 2009; 88 yen/USD in 2010; 88 yen/USD in 2011]
According to food industry publisher Nikkan Keizai Tsushinsha, the production of the Japanese food industry, which is comprised of the major end-users of food processing equipment, amounted to 22,537 billion yen ($240 billion) in 2009, 22,614 billion yen ($257 billion) in 2010 and is estimated at 22,604 billion yen ($257 billion) in 2011.
Nikkan Keizai Tsushinsha reported in its January 2011 Beverage & Food Statistics Monthly that the Japanese food industry continues to face a leveling off of overall demand due to Japan’s shrinking population. Also, industry competition for lower cost products prevents the food industry from overcoming deflationary conditions, despite rising raw materials prices for coffee, cheese, cooking oil, wheat, soybeans and sugar. In 2010, Japan experienced record high heat during the summer months, generating extra demand for ice cream and non-alcoholic beverages. The industry journal pointed out the importance of new product development and demand creation for the Japanese food industry, as seen from the success of beer-flavored non-alcoholic beverages, for example.
According to the Foodservice Industry Research Institute, a Ministry of Agriculture, Forestry and Fisheries-affiliated research organization, the Japanese food service industry, another major end-user of food processing equipment, was estimated at 29,484 billion yen ($314 billion) in 2009, down 1.8% from the previous year, due to decreases in per capita consumption on personal eat-out and corporate entertainment expenditures. By market segment, the Japanese food service industry in 2009 was broken down into the following channels (by percentage): restaurants including fast food (42.9%); takeout restaurants (20.6%); hotels (10.0%); dining/bars (9.4%); coffee shops/drinking establishments (6.8%); company cafeterias (5.8%); hospitals (2.7%); schools (1.7%); nurseries (1.0%); and airline catering service (1.0%).
In 2009, only fast food service increased sales by 1.5%, while other restaurants including western, Chinese, Japanese, family dining, noodle shops and sushi bars all declined. Hotels lost sales by 3.6% due to reduced travel during the spread of the H1N1 influenza virus. Food service at companies, schools, hospitals and nurseries saw sales decrease by 1.6%. Coffee shops lost sales by 3.0%, while sales for drinking establishments decreased by 3.9%. Dining restaurants and bars lost sales by 3.9%. Takeout food service edged up sales by 0.1%.
According to the Japan Food Machinery Manufacturers’ Association (JFMA), Japanese domestic sales of $4.29 billion for food processing equipment in 2009 were broken down into the following segments (by percentage): bakery and confectionery machinery (24.6%); milk and dairy products machinery (11.2%); beverage products machinery (4.8%); meat processing machinery (3.9%); marine processing machinery (3.9%); fermented food and brewery machinery (3.5%); rice and barley polishing machinery (3.0%); flour milling machinery (2.5%); and noodle making machinery (2.5%). Other food processing machinery, which includes a wide variety of equipment such as dryers, conveyers, sanitary equipment, analytical/testing equipment, etc., accounts for the remaining 40.2%.