The Japanese Food Market Presentation prepared for the European Institute for Asian Studies, Swedish Embassy, Tokyo June 20, 2011 Stephanie Assmann, Akita University

Fragmentation of Food Retail Market Demographic Changes Fragmentation of Food Retail Market Aging of society Delay of marriage and parenthood Single parent families remain a rarity Fertility rate at 1.26. Conventional patterns of family life Women 41 percent of the workforce 70 percent leave workforce upon marriage and/or childbirth Convenience stores, specialty stores and drug stores cater to single consumers Pre-packaged foods, ready-made meals, snacks and frozen foods Family-owned shops cater to families who purchase fresh food on a daily basis. Older consumers New shopping possibilities such as home delivery services Use of modern communication technologies

Eating Habits Culinary influences from China, Korea, Spain, Portugal, France and Italy. Famous non-Japanese foods 1. Tempura from Portugal 2. Ramen from China. Occupation Period (1945-1952) US food aid program supplied bread and milk for school lunches American style fast food chains such as McDonalds in 1971 and Japanese interpretations like Mos Burger in 1972

Convenience Stores (Konbini) Self-service mini supermarkets Established in the 1960s Sales area between 30 m²and 250 m² Opening hours mostly 24/7 Ready-made meals, snacks, soft drinks , alcohol, cigarettes, postal and bank services 42,738 outlets (2004) Yearly sales of 692.22 billion yen Locality and convenience

Supermarkets Established in the 1960s and 1970s. Large-scale retail outlets 18,485 stores. Sales of 1.08 trillion Yen (August 2009) Key Market players 1. Seven & I Holdings Sales of 5,649.9 billion Yen (US$ 60.8 billion) Ito-Yokado 2. Aeon Co. Ltd. Sales 5,230.8 billion Yen (US$56.3 billion) Jusco Supermarket chains Aeon and Saty Convenience stores (Ministop ) Drug stores

Department Stores Rich in history and tradition Large-scale retail outlets between 1,500 m² and 6,000 m² Almost a third of department store sales consist of food markets and gastronomy Number of department stores has declined since the early 1990s from 455 department stores to 308 outlets in 2004 Sales figures of department stores have declined from 8.99 trillion Yen (99.12 billion US Dollar) in 1999 to 7.38 trillion Yen (81.45 billion US Dollar) in 2008 Standard Assortment Freshly made delicatessen and bentō (lunch box), food gift boxes , coffee and tea specialties Department Stores Rich in history and tradition Socializing and cultural events

Mitsukoshi Founded in 1673 13 department stores in Japan and 22 department stores in Paris, London, Taiwan and Shanghai Mitsukoshi Isetan Holdings key market player Sales of 1.426 billion yen Innovative distribution channels, such as online shopping, home delivery and mail order services

Food Safety Use of expired and/or tainted ingredients, illegal or contaminated additives and pesticides Mislabeling of food ingredients Falsification of production dates and expiry dates. Snow Brand Milk Products: tainted milk products Meat Hope: mislabeling of croquettes Fujiya: use of expired ingredients and mislabeling consume by dates of its products Food scandal over tainted dumplings imported to Japan from China

Impact of 3/11 Disaster on Food Market 1. New focus on food safety Fukushima Daiichi refocused the attention of consumers on food safety with implications for farmers MAFF: prohibition of harvesting of Fukushima vegetables, such as spinach, kakina and parsley Iitate-mura: emergency slaughtering of cattle 2. Earthquake and tsunami have destroyed coastal fishing towns in the Tohoku Region 3. The disaster has destroyed agricultural areas, in particular in the most affected prefectures Miyagi, Fukushima and Iwate. Future Tasks Identify new distribution channels and food products that are attractive for older consumers Support and rebuild agriculture and fishing industry in the affected regions 3. Analyze if and how regional food products can be (re- )integrated into the assortment of food retailers.