Japanese potential could boost global organic output - survey

By Neil Merrett

- Last updated on GMT

Related tags: Organic food, Organic farming, Sustainable agriculture

Organic, lower sugar and reduced carbohydrate foods that have seen growing interest in Western European and North American markets are likely to become importantly popular in markets like Japan in coming years, says research.

In a recent survey carried out among 40 leading Japanese food manufacturers last year, health trends were seen as increasingly significant to consumers, according to analyst, Global Intelligence Alliance Group (GIA).

The group said that the relatively underdevelopment organic and reduced sugar markets were seeing heightened potential on the back of regulatory upheavals, potentially creating strong opportunities for imports of organic goods.

Japanese Trade Commission estimates cited by the analyst, suggest organic goods were currently only amounting to 0.5 per cent of the food market in the country.

Market challenge

However, Kim Khoo, GIAS’s practice head for Manufacturing & Industrial Goods in the Asia Pacific region, suggested that challenges lay ahead in bolstering sails of organic food products.

“This is partly because of the high level of pesticide traditionally needed for the average fruit or vegetable farm in Japan, compared with North America or most of Western Europe, in order to fight off insect infestations caused by a relatively hot and humid climate,”​ she stated. “The term, organic, also has low public recognition in Japan due to cultural differences from other mature consumer markets.”

In looking at potential key drivers to boost demand, GIA outlined four key areas that could ensure greater consumer interest for organic and more seemingly health-focused goods.

The first driver identified in the research was the outbreak of two major food scandals in the country revolving pesticide-tainted Chinese dumplings and contaminated rice, events that even led to the resignation of an agricultural minister.

With a growing media focus on food safety in the country, food safety and labelling were increasingly pressing issues for consumers, leading to possible switches to organic products, according to the analyst.

Similarly, new laws in Japan for food labelling as a result of last year’s scandals was expected to streamline existing guidelines to put greater emphasis on what is going into products.

As an extension of this, GIA suggested similar regulatory upheaval regarding a Law on Promotion of Organic Agriculture is designed to help farmers to switch to organic farming. Further support is also expected to aid production and distribution of organic goods, stated the analyst.

Alongside legal changes, the analyst said that a largely aging population of relatively affluent consumers was another sign of strong potential for lower sugar organic goods.

“The challenge for organic food manufacturers in Japan will be exacerbated by other market restraints unique to the country, such as limited space to grow food domestically, the consumer obsession with the look of a product, and the significant price difference,”​ stated Khoo.

“The import market share is likely to be a significant portion of the market growth. International organic food manufacturers hoping to enter the Japan may want to start by studying the sales and distribution channels, customer value drivers, market partners and competitors.”

Related topics: Market Trends

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