New opportunities in expanding Japanese food market

The report, by Japanese nutrational research and consultancy Paul Yamaguchi & Associates​, found that functional foods have become part of the mainstream diet in the land of the rising sun.

The study notes that last year the Japanese spent $195 per person on functional foods - five per cent of their total food expenditure - twice as much as people in the US and almost four times more than Europeans.

What is just as impressive is the range of functional foods available to the Japanese. Paul Yamaguchi & Associates estimate that since 1990, over 5500 new functional foods were introduced in the country - an average of about 400 a year.

Both the regulated FOSHU (Foods for Specified Health Use) market and the unregulated market are growing at great speed. The former is now worth $5.1 billion, up 37.6 per cent from 2001, while the latter has grown by nine per cent to reach $11 billion. The number of FOSHU approved products has surged - up 45 per cent from 274 in 2001 to 398 in 2003.

The unregulated market is led by functional beverages ($4 billion) and more specifically by sports beverages, which now have a market share worth $1.6 billion. And the first functional food has far from disappeared, with probiotics, prebiotics and fermented milk the second largest unregulated category.

Despite their obvious tendancy to want to eat healthily, the Japanese do not have the same propensity to dietary supplements. While, the functional foods market grew 11.9 per cent between 1995 and 2003, supplements increased by only 7.5 per cent to be worth $9 billion.

Paul Yamaguchi & Associates claim that the Japanese interest in functional foods is first historical. Japan is after all the home of Yakult - probably the first modern functional food - and it is traditionally a nation which eats healthily. This predilection towards healthy-eating may explain why functional foods are leading the pack ahead of supplements.

Indeed, a study by Tukuba University in 2003 showed that three quarters of Japanese prefer to consume food or beverages rather than pills or tablets to treat chronic health conditions.

Another contributory factor to the success of functional foods in Japan is availability. In short, they can be bought anywhere and everywhere, like any "normal" food. Hence, 65 per cent of sales are from convenience stores and supermarkets - health food shops and specialist outlets don't even get a look in.

The FOSHU market is made up of eight specified health use categories, with foods for gastrointestinal health way out front with 193 approved products and a market share worth $3.2 billion. Foods for cardiovascular health trail a poor second with 52 approved products and a $94 million market share, followed by foods for hypertension, diabetes, to help mineral absorption, triglycerides health (foods fortified with fatty acids/plant sterols, for example), bone health and dental health.

However, this may all be about to change as the market share of foods for gastrointestinal health has shrunk from 81.4 per cent in 2001 to 64 per cent in 2003. On the other hand, foods for cardiovascular and triglcerides health have both increased their market share by over 300 per cent, and the future looks bright for foods for dental and bone health.

As NutraIngredients​ reported, the new FOSHU regulations - which may be brought in as soon as the end of the year - will lead to further regulation in the market, and as the report says, it may be necessary for all products to have FOSHU status to succeed.

The real key to success though, according to the authors of this study, is good advertising that emphasises taste and wellness messages - continuing to identify functional foods as part of the mainstream food market.