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- Cheese Revolution #4: Market Insights
Cheese Revolution #4: Market Insights
Read for some insights on cheese and yogurt categories in Japan
Hello, Market Shakers!
This week, we keep things light, with some final insights on the yogurt and cheese category. We spoke with Yusuke Hasegawa, data researcher for GourmetPro.
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Cheese under influence
The birth and growth of the plant-based cheese category in Japan can partly be attributed to outside influences. North America and Europe trends have set the tone, and Japanese specialty stores perceive the category as trending and niche. Therefore, importing a rare product that offers a new experience for the consumers is greatly valued.
Japanese consumers turn to plant-based products for many reasons, but the leading drivers are health and environmental concerns. The SDGs are pushing plant-based trends in Japan.
Understanding the consumer base in Japan is key to success. Millennial consumers are closer to their peers in Europe and North America and more likely to be interested in environmental issues and animal welfare. But when it comes to spending on premium products, the primary consumers in Japan are the silver generation —the elderly.
The need for plant-based cheese is likely to grow in Japan.
With significant retailers embracing the category, notably Aeon, this category will stay. Large food manufacturers will determine the future of the market. If they show an interest in plant-based cheese and jump on the bandwagon, the market will have the right conditions to expand. But without significant players, the category will stay niche.
From a retail point of view, the storage period for plant-based products is more prolonged than conventional cheese. Therefore, these products represent a real advantage —they can be stored longer in storage.
Do ingredients matter?
So far, the main ingredients for products available in Japan are palm oil (Marin Food), coconut oil (Vegetive, Sheeze), and soy (Marusan, Beyond Tofu). But more than the ingredients, the ingredient origin and type matter a lot for Japanese consumers.
Does this mean Japanese brands will always win over imported products? Not necessarily. Thanks to a well-controlled production process, well-branded instead of European products can be perceived as authentic and of high quality. For example, an organic product from Germany or Denmark will be attractive. The label provides an excellent selling point in Japan.
Are Japanese consumers digging plant-based yogurts?
The high prices may explain the generally low level of enthusiasm for this trend of products. Another, more fundamental, has to do with why Japanese consumers purchase yogurt in the first place.
When consumers experience health issues related to their guts and want to improve their conditions until their trouble is gone, they tend to turn to yogurt. Unfortunately, plant-based yogurts wouldn’t be their first choice because they do not expect to find the same health benefits as dairy products.
The Millenials and the generation Z are more likely to care about the environment and animal welfare. However, that’s also the generations that cannot afford premium products. The ball is in the court of large retailers and manufacturers. This market may or may not grow, depending on how things go.
Market entry for foreign brands is tricky.
The plant-based yogurt products’ short shelf life makes it difficult for importation. On top of that, the Japanese retail industry obeys local custom, the “one-third rule.”
The organic supermarket chain Bio c’Bon used to import by air the Dutch brand Happy Cow. However, the retail price ended up being very high for Japanese consumers.
Do ingredients matter?
The market has soy, coconut, and almond-based yogurt products for the time being. A potentially exciting base could be rice for Japanese consumers, but manufacturers would be threading into a close category, the amazake. Amazake is a fermented rice drink rich in amino acids.
A final word: What foreign operators should know about the Japanese retail world
Japanese retailers care to foster long-term relationships with distributors and manufacturers. This need for loyalty and trust influences how they stack their shelves, sometimes regardless of what consumers want or need. Their business relationships affect their rebate rates, too.
See you next Tuesday!
We will share an exciting interview with Ike Nakayama, founder of Terra Foods, a company developing, manufacturing, and wholesaling 100% plant-based and vegan food products.
Made with ❤️ by GourmetPro - Food & Beverage experts in Japan.Reach out for questions and comments!