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Japan Food and Drink Report Q1
2012

  • Publication Date:January 2012
  • Publisher:Business Monitor
  • Product Type: Report
  • Pages:121
  • ISBN:1749-2785

Japan Food and Drink Report Q1 2012

While the lives of Japanese consumers are slowly returning to normal after the March tragedy, they are now facing growing external headwinds of a sovereign debt crisis in Europe, a hard landing in China and economic stagnation in the US. Although retail sales and consumer confidence are on the mend, the global headwinds are likely to increasingly weigh on consumer confidence and prompt consumers to keep a firm grip on their purse strings in the near term. With hardly any sign of optimism in Japan's consumer outlook, both in the near term and over the long run, domestic consumer goods manufacturers such as Asahi and AEON are looking afield for stronger growth opportunities and will continue to seek out desirable acquisition assets to fulfil their diversification ambitions.

Headline Industry Data

  • 2012 per capita food consumption = +2.6%; CAGR growth forecast to 2016 = +3.3%
  • 2012 alcoholic drinks value sales = +2.6%; CAGR growth forecast to 2016 = +3.4%
  • 2012 soft drinks value sales = +7.0%; CAGR growth forecast to 2016 = +5.3 %
  • 2012 mass grocery retail sales = +0.8%; CAGR growth forecast to 2016 = +0.5%

Key Industry Trends

Strong Yen Prompts Consumer Players To Embark On An Acquisition Spree - Japanese consumer-facing companies are embarking on an acquisition spree as the yen climbs to a post-World War II high of JPY77.8/US$ at the time of writing. AEON agreed to acquire all outstanding shares in Japanese supermarket chains Marunaka and Sanyo Maraunaka for JPY44.9bn (US$577mn) in October while Kirin recently agreed to buy an additional 49.54% stake in Brazilian brewer Schincariol, taking its total purchase price to BRL6.3bn (US$3.5bn). Meanwhile, Asahi agreed to acquire New Zealand alcoholic drinks company Independent Liquor for US$1.5bn and the mineral water and juice businesses of Australian soft drinks producer P&N Beverages for AUD188mn (US$203mn). The yen strength has equipped Japanese consumer goods investors with a stronger buying power, bolstering their appetite for overseas acquisitions.

Switching Sights To Higher Growth Markets - US-based fast food chain Yum! Brands has agreed to offload its Long John Silver's restaurants to LJS Partners and its A&W All-American Food chain to the National A&W Franchisees Association and A Great American Brand for undisclosed prices. Both A&W and Long John Silver's make little strategic sense with Yum's ambitions of building an international profile. A&W and Long John Silver's are both relatively underweight in international markets, when compared with Yum's other fast-food chains such as Pizza Hut, Taco Bell and KFC. Outside of the US, A&W has stores in only four international markets, namely Indonesia, Malaysia, Thailand and Japan, while Long John Silver's only operates in Singapore. Also looking to lock in higher growth opportunities abroad, Japanese ingredients producer Ajinomoto set up a sales company in Bangladesh in August to sell seasonings and processed foods to local consumers. This investment forms part of Ajinomoto's broader strategy of growing its footprint across international markets with a particular focus on emerging markets (EMs) in the Middle East, Africa and South Asia.

Risks To Outlook We are mindful of the external risks posed by economic uncertainties in Japan's key trading partners, especially in the eurozone and the US. With the fiscal crisis in Europe spreading from Greece to larger countries including France, we are concerned that the contraction in spending in these areas would result in a sharp drop in demand for Japanese products from European consumers. Similarly, with the uncertain employment conditions amid the Standard and Poor's downgrade of US government debt to AA+ from AAA - the first time in history - the growth prospect for the US economy remains precarious as well. Should the economic performances in these countries turn out to be worse than expected, Japan's growth would be penalised, potentially resulting in an economic recession that extends beyond 2012. This scenario clearly would not bode well for the consumer and could deal another blow to domestic demand growth.

  • SWOT Analysis
  • Japan Food SWOT
  • Japan Drink SWOT
  • Japan Mass Grocery Retail SWOT
  • Business Environment
  • BMI's Core Global Industry Views
    • Table: Agricultural Commodity Prices
    • Table: Core Views Q112
  • Asia Pacific Food & Drink Risk/Reward Ratings
  • Q112: Food & Drink Risk/Reward Ratings - China
  • Q112: Food & Drink Risk/Reward Ratings - Asia Pacific
  • Japan's Food And Drink Business Environment Rating
  • Macroeconomic Outlook
    • Table: Japan - Economic Activity
  • Industry Forecast Scenario
  • Consumer Outlook
  • Food
  • Food Consumption
    • Table: Food Consumption Indicators - Historical Data & Forecasts
  • Confectionery
    • Table: Value/Volume Sales of Selected Food Sub-Sectors - Historical Data & Forecasts
    • Table: Chocolate
  • Canned Food
    • Table: Value/Volume Sales of Selected Food Sub-Sectors - Historical Data & Forecasts
  • Trade
    • Table: Japan Food & Drink Trade Indicators - Historical Data & Forecasts
  • Drink
  • Alcoholic Drinks
    • Table: Japan Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
    • Table: Beer
    • Table: Wine
    • Table: Spirits
  • Hot Drinks
    • Table: Japan Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
    • Table: Tea
  • Soft Drinks
    • Table: Japan Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
    • Table: Carbonated Drinks
    • Table: Fruit/Vegetable Juice
    • Table: Bottled Water
  • Mass Grocery Retail
    • Table: Japan Mass Grocery Retail Indicators - Sales Value by Format - Historical Data & Forecasts
  • Food
  • Key Industry Trends and Developments
  • Switching Sights To Higher Growth Markets
  • Downside Risks On Japan's Agriculture Outlook
  • Market Overview
  • Food Consumption
  • Confectionery
  • Functional Food
  • Canned Food
  • Frozen Food
  • Trade
  • Agriculture
  • Drink
  • Key Industry Trends And Developments
  • Venturing Into Healthy Drinks
  • Japanese Brewers' Expansions Not Entirely Plain Sailing
  • Beer Market Growth Stuttering Along
  • Market Overview
  • Alcoholic Drinks
  • Beer
  • Wine
  • Hot Drinks
  • Soft Drinks
  • Functional Drinks
  • Mass Grocery Retail
  • Key Industry Trends and Developments
  • Retailers Have Big Overseas Ambitions
  • While Consolidating Their Japan Footprint
  • Strong Yen Prompts Consumer Players To Embark On An Acquisition Spree
  • Market Overview
  • Leading MGR Players
    • Table: Structure of Japan's Mass Grocery Retail Market by Estimated Number of Outlets
    • Table: Structure of Japan's Mass Grocery Retail Market - Sales by Format (US$bn)
    • Table: Structure of Japan's Mass Grocery Retail Market - Sales by Format (JPYbn)
    • Table: Average Annual Sales per Outlet by Format - 2010
    • Table: Grocery Retail Sales by Format - Historical Data & Forecasts
  • Competitive Landscape
  • Consumer Share Price Analysis
  • Key Players
    • Table: Key Players in Japan's Food & Drink Sector
    • Table: Key Players in Japan's Mass Grocery Retail Sector
  • Company Monitor
  • Food
  • Ajinomoto
  • Drink
  • Asahi Breweries Ltd
  • Kirin
  • Mass Grocery Retail
  • Seven & I Holdings
  • Lawson Inc
  • AEON
  • Seiyu
  • Risk/Reward Ratings Methodology
    • Table: Rewards
    • Table: Risks
  • Weighting
    • Table: Weighting
  • BMI Food & Drink Industry Glossary
  • Food & Drink
  • Mass Grocery Retail
  • BMI Food & Drink Forecasting & Sourcing
  • How We Generate Our Industry Forecasts
  • Sourcing
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