The top food and drink companies in Japan feature among the top companies in the world. Although some names are recognised internationally, such as Ajinomoto and Suntory, many Japanese companies have not established themselves in the west. Nevertheless the influence on the west of the Japanese food and beverage industry is significant. This is for two main reasons. One reason is that Japan is an important importer of food and drink; the other is that Japan is a vital source of new product ideas. In the past Japan has invented cup noodles, draft beer in cans and the original concept of functional foods and drinks. Japan still leads the world in this exciting new market.
The top ten companies in the whole food and beverage industry ranked by total sales in 1998 (financial year ending March 1999 or December 1998) are as follows:
|Nippon Meat Packers
|Diversified food company
|Snow Brand Milk Products
|Meiji Milk Products
|Morinaga Milk Industry
Among the top food and drink companies in Japan are two major international companies. Coca-Cola is the top soft drink company in Japan and Nestle is the top brand in instant coffee. Nestle Japan is also the second most profitable company in the food and drink industry, a remarkable feat for a foreign company. A few other international companies have won significant market share in some sectors. This includes Haagen-Dazs Japan ranked fifth in the ices market, Nihon Kellogg market leader in breakfast cereals and Nippon Lever ranked eight in the processed fats and oils sector.
The beverage market (alcoholic and non-alcoholic) in Japan is massive. The total alcoholic beverages market is worth Y4.7 trillion (US$35.9 billion) of which Y2.5 trillion (US$19.1 billion) is beer (1998 figures). The beer market is dominated by four companies, all of which are in the top ten food and drink companies – Kirin Brewery, Asahi Breweries, Sapporo Breweries and Suntory. For many years Kirin Brewery had a massive market share of around 60%. Over recent years Asahi Breweries continuously took market share, finally pushing Kirin into second place in late 1998. Now Asahi Breweries has around 40% market share and Kirin less than 40%.
The other major change in this market in recent years is the rapid increase in demand for happoshu (sparkling malt beverage made from a low malt content, similar to beer but cheaper). This product is in demand because of the continuing recession in Japan. All the brewers, except for Asahi Breweries, now produce happoshu.
The soft drinks market in Japan was worth a massive Y3.96 trillion in 1998 (US$30.2 billion); the estimate for 1999 is Y4.2 trillion (US$36.8 billion). Three of the top alcoholic beverage companies are also among the top soft drink companies (Asahi, Kirin and Suntory). Coca-Cola is the top soft drink company with around 30% market share. There are 15 Coca-Cola bottling companies in Japan. The other top soft drink companies are Otsuka Beverage (parent company Otsuka Pharmaceutical), Calpis Co., DyDo Drinco, ITO EN, Nestle Japan, Pokka and UCC Ueshima Coffee.
The unusual characteristic of the soft drinks market in Japan is that it is dominated by still drinks (ready-to-drink coffee and ready-to-drink tea) rather than by carbonated beverages. Coca-Cola’s top-selling brand in Japan is Georgia ready-to-drink coffee, rather than Coke.
Confectionery and Snack Foods
The top chocolate and sugar confectionery companies are Meiji Seika, Lotte, Morinaga, Ezaki Glico and Fujiya. The top snack foods company is Calbee. Meiji Seika is unusual in that 41% of sales are from pharmaceuticals. An interesting fact about Lotte is that the Lotte company in South Korea is larger than the Japanese parent company, leading some people to believe erroneously that Lotte is a Korean company. Among the other top companies, Ezaki Glico is also an important producer of curry roux preparations. All the top confectionery companies are also among the top ice cream companies, except for Meiji Seika which has just a few ice cream products.
Calbee is market leader in snack foods with 37% market share, well ahead of the company ranked second. Calbee has a commanding lead in potato chips. This company is also among the leaders in breakfast cereals.
Cereal products – flour milling, bread, cakes, noodles
The largest flour miller in Japan is Nisshin Flour Milling with 37% market share. Ranked second is Nippon Flour Mills with 21%, followed by Showa Sangyo in third place.
Yamazaki Baking dominates the bread market with 35% share; this company is also a major player in cakes, both western and Japanese type cakes. The subsidiary company Yamazaki Nabisco’s Ritz brand is ranked second in the cookies market.
Market leader in cup noodles is Nissin Food Products, a company with many production plants around the world; Nissin also produces bagged instant noodles and has 22% share of this market. The other top cup noodle and bagged instant noodle companies are Toyo Suisan, Myojo Foods and Sanyo Foods; the latter is bagged instant noodle market leader.
The top three dairy companies are Snow Brand Milk Products, Meiji Milk Products and Morinaga Milk Industry. They handle raw milk and produce a variety of milk products including milk for drinking, milk-based drinks, yogurt, cheese, butter, milk powder and evaporated milk. Most of the cheese consumed in Japan is imported but home production is gradually increasing. Included under milk products is ice cream. In this sector the market leaders include both the top dairy companies mentioned here, plus the top confectionery companies (see above). Another important milk product, the lactic acid bacteria drink (another Japanese invention) Yakult produced by Yakult Honsha has become known around the world.
This market is dominated by frozen ready meals, often in single portion packs to suit the modern life-style in Japan. The top companies in frozen foods are Nichirei, Katokichi and Ajinomoto (world leader in monosodium glutamate).
Sauces, dressings and seasonings
The market leader in mayonnaise and dressings is Q P Corp., followed by Ajinomoto. In sauces the top tomato ketchup company is Kagome, followed by Kikkoman using the Del Monte brand. Kikkoman is top in soy sauce. House Foods and S & B Foods are the top companies in spices and curry roux type preparations.
The top companies producing hams, sausages, bacon, etc. in Japan are Nippon Meat Packers (known as Nippon Ham), Itoham Foods, Prima Meat Packers (Prima Ham), Marudai Food and Snow Brand Food (parent company Snow Brand Milk Products). These companies also rear livestock.
Processed fats and oils
Once again Ajinomoto is among the market leaders. Two of the top milk companies, Snow Brand Milk and Meiji Milk, are also leaders in yellow fats (margarine and fat spreads). Snow Brand leads the retail yellow fats market while Meiji Milk is ranked third. Nisshin Oil Mills is the largest producer of edible oils in Japan, Honen Corp. is second. The other major companies are Fuji Oil, Ajinomoto and Showa Sangyo.
Retort packaged foods
This is an important market in Japan; it is led by House Foods. The other market leaders include Ajinomoto, Otsuka Foods and S & B Foods. The largest sector is retort packaged curried meals; pasta sauces are also important.
The above information was taken from a new report on the market leaders in the food and beverage industry in Japan published by Japanscan Ltd. For more information go to http://www.japanscan.com.