Rising domestic consumption backed by the strong economy has contributed to the growth of the Japanese dairy and soy food sector. This sector is forecast to grow from JPY 2,084.8 billion or US$18.7 billion (approximately Rs 1.3 lakh crore) in 2018 to JPY 2,396.6 billion or US$ 23.1 billion (approximately Rs 1.64 lakh crore) by 2023, at a compound annual growth rate (CAGR) of 2.8%, says GlobalData.
GlobalData’s report on ‘Japan Dairy & Soy Food – Market Assessment and Forecast to 2023’, reveals that cheese was the largest category with value sales of JPY 513.3 billion or the US $ 4.6 billion (approximately Rs 33,000 crore) in 2018. The category is also forecast to register the fastest value growth at a CAGR of 4.3% from 2018 to 2023, followed by yogurt 3.9%.
Sneha Singh, consumer analyst at GlobalData, says, “With increasing disposable income, consumers are looking for more nutritious dairy & soy food products. The demand is likely to grow further, fueled by the growing Japanese economy.”
The value share of Japan in the global dairy and soy food sector is expected to increase from 3.9% in 2018 to 4.1% by 2023. However, the country’s share at a regional level is expected to decrease marginally by 0.8% during the next five years.
The report also states that Meiji Holdings, Megmilk Snow Brand, and Morinaga Milk Industry are the leading market players in the Japanese dairy and soy food sector. These top three companies offer products in the butter and spreadable fats, cheese, cream, dairy-based and soy-based desserts, drinkable yogurt, milk, and yogurt categories.
Private label penetration remained low in the Japanese dairy and soy food sector at 2.6% in 2018. However, private label products are growing at a higher CAGR than branded products.
Singh concludes, “‘Naturally healthy and ‘free-from’ are forecast to remain the key health and wellness attributes in the next five years, as consumer demand for ‘all-natural’ and ‘fat-free’ dairy products continue to grow in the Japanese dairy and soy food sector.”