Demographic shifts help ready meal sales soar in Japan with domestic brands leading the charge

The sector enjoyed a retail value sales increase of 3% to hit JPY1.9 trillion in 2017, according to information from market research company Euromonitor.

The data was revealed as thousands of international firms exhibited their products at the FoodEx Japan show in Chiba, Tokyo, last week.

However, the information shows the difficulties global brands can face in Japan, with domestic giants still very much dominating the market, despite growing consumer interest in western foods.

The top five ready meal brands in the country are Kewpie Corp, Nisshin Seifun Group, House Foods Corp, Ajinomoto Co and Meiji Holdings.

In a similar vein to the nation’s packaged food industry, the ready meals sector is highly fragmented, with top performer Kewpie accounting for only 1.8% of the target market. The remaining four brands come in at 1.7%, 1.4%, 1.0% and 0.9%.

Globally, Nestle is the top ready meal brand with 7.9% of the total market share, but it fails to register in the top five in Japan.

According to Euromonitor analysts Megumi Matsunaga, consumers in Japan continue to enjoy ready meals due to having less time to cook at home, which has also become more expensive due to the rising cost of fresh produce. “The growth of ready meals has been greatly supported by the increase of women in the workforce in Japan which has created stronger demand for saving time and effort in cooking,” ​she said.

Single portion products

“Furthermore, demographic change such as the increase of single-person households has also boosted sales of ready meals in Japan. Driven by urbanisation, the size of households has continuously shrunk over years while larger cities retain a higher share of the workforce compared to rural areas in Japan. ​

“This has encouraged major manufacturers of ready meals in Japan to launch products targeting this consumer segment, such as single-portion products for male and female consumers.”​

While ready meals used to have poor product varieties, Masunaga said manufacturers had made significant efforts to expand their product ranges.

“For example, large frozen pasta products have been well received by male consumers. In addition, bento products, Japanese-style ready meals, with reduced carbohydrates and more vegetables have been received well by health-conscious consumers,”​ she said.

In terms of the retail environment, the three main convenience store chains - 7-Eleven, FamilyMart and Lawson Inc – are the major players with a combined market share of over 20%, with consumers preferring to buy fresh ready meals close to their homes or workplaces.

“As well as having a location advantage, convenience store operators offer the widest variety of bento boxes, put significant effort into product design and launch seasonal products every week alongside the classic line-ups,”​ she said.

According to Euromonitor, the ready meal sector will record a CAGR of 2% to reach JPY2.1 trillion in sales in 2022.