Yes, plant-based meat has exploded in the Japan market, but it looks quite different from the alternative protein booms in Western markets

In spring of 2020, we observed a sudden explosion of plant-based meat and dairy products in the Japanese market, with new launches nearly every week. A year later, the launches continue, one after another.

While the conversation in western countries is often dominated by well-funded imitation meat products like Beyond Burger or Impossible Meats, in Japan the new alternative protein products were launched by domestic companies; nearly all major meat processors have released a plant-based meat alternative as well as products from major plant oil crushers and soy-based processors, dairy processors, frozen food manufacturers, health food & drink manufacturers, as well as many major retail chains and major café and hamburger chains.

However, interestingly, nearly all of these plant-based meat and dairy alternatives are soy-based, in contrast to Western countries where there is a much more diversity in the plant-based proteins used in meat alternatives, including pea protein, mung beans or seaweed.

The pioneers of alternative meat and dairy in the Japanese market are the major traditional soybean players. For example, Fujioil, the largest soybean cooking oil crusher, with a 50% share of the soy-based meat market, recently launched their fermented soy-based cheese, mainly for food service players and food processors. We heard from a cheese distributor that these soy-based alternative cheese products are quite price competitive and is starting to develop a market. Marukome, the largest traditional soybean seasoning paste (miso) manufacturer, was also one of the early players in the alternative meat market, with their plant-based ground meat. They have both retail and food service products. The retail sales of they ground soy “meat” grew quickly during COVID19 lockdowns, because some consumers who were limiting their grocery runs liked its long shelf life.

March 2020 was the magic month for meat alternatives in Japan with a sudden explosion of new products.

Almost all major meat processors entered the market. Starzen, one of the leading meat integrated company, together with a leading health food and drink manufacturer Otsuka, developed a brand called ‘ZEROMEAT’, and is selling plant-based sausages, meat ball and hamburg steak patties made from soy protein and egg whites. Ito Ham, one of the leading meat processors, also entered the market with a ‘Soy Meat’ brand in the last Spring. In the same week, the largest meat processor, Nippon Ham entered the market too with a brand called ‘Natu Meat’, which utilize konnyaku (the root of the konjac potato) to add chewy texture to the soy protein.

Of course, various manufactures of savory snacks as well as frozen ready-to-eat products also followed this trend. Koikeya, the second largest player in the savory snack market, expanded their pilot sales of a soy-based protein snack called ‘Guiltless Fried Chicken’ to nationwide in June 2020. Yonekyu, a leading meat and frozen food manufacture, developed a frozen ready-to-eat food brand called ‘AIR MEAT’, which includes curry, dim sum, meat balls and Sichuan-inspired mapo tofu.

In addition to those food manufacturers, the retail and food service chains are also main drivers of this soy-meat trend. In 2020, almost all convenience store chains, including Lawson, Seven Eleven, Family Mart, as well as several food service and cafe chains jumped into the market, but again, all of them are soy-based products. For example, Lawson, one of the leading convenience store chains, released various ready-to-eat products containing soy-based meat last year, including soy-based hamburgers, deep-fried soy-based cutlets, rice balls with soy meat, and deep-fried soy meat nuggets. The leading café chain, Doutor, also launched a soy-based burger in autumn 2020.

What is driving the alternative meat boom in Japan?

Most of these soy-based products are mainly developed for health-conscious consumers, and not necessarily in response to vegan or vegetarian trends, nor any particular focus on the environmental benefits of plant-based products. Many of these products contain eggs or dairy. The number of strict vegans or vegetarians is limited in Japan. A consumer survey conducted by a consulting firm Frembassy in Dec 2019 indicated that about 5.7% of Japanese consumers say they follow a vegan or vegetarian diet. However following a vegan or vegetarian diet in Japan is not necessarily driven by any ethical or lifestyle philosophy. Instead the concept of ‘vegan’ or ‘vegetarian’ in Japan in particular often refers to the type of food desired for a day or meal. “Let’s have vegan food on Friday!” is a common way to hear the term.

Furthermore, there is also hardly any mention of any environmental benefit of soy-based meat in the marketing messages. Japanese consumer concern about any negative environmental impact from the livestock industry is low in Japan, as seen by the surprise in Japan when the Japanese Minister of the Environment Shinjiro Koizumi was denounced in the Western media for eating steak when he went to New York to attend the UN Climate Action Summit in September 2019. Similarly, consumer awareness of the concept of animal welfare is also still very low in Japan.. An online survey conducted by the Animal Rights Center in March 2020 showed that 85.8% of consumers responded that they had never heard about animal welfare.

In fact, these newly launched soy-based plant protein products primarily rely on the existing positive image of soy embedded in the Japanese mind. “Soy is healthy” is a widely accepted concept among consumers in Japan. Japan has a long history of eating local soy-based products, like tofu and natto (fermented soybeans). Many Japanese consumers believe that Japanese traditional cuisine is ‘healthy,’ and the heavy use of various soy-based products in the traditional cuisine is considered as one of the reason traditional cuisine can be considered “healthy”. According to a survey conducted by My Voice Com in Dec 2019, 63% of consumers said they are making a conscious effort to include soy foods in their regular diet[1].

In addition to the overall positive health image of soybeans, Japanese consumers’ growing interest in protein in general is also helping these soy-based protein products. Demand for protein-enriched drinks and food began to increase in Japan in 2015, and this trend was further accelerated by the government’s increase in the recommended target protein requirement for seniors in 2018 to prevent frailty caused by aging. This led to increased consumption of products like whey protein powder, protein bars, and protein drinks. Such demand for protein further expanded after COVID19 as Japan consumers worried about the negative health impacts of “stay at home” restrictions in 2020.

As in Western markets, plant-based protein is a growing food innovation trend in Japan, but the context is very different. Marketing related to environmental benefits, sustainability or animal welfare are not part of the message. Japan is a soy-based alternative protein market, relying on consumers’ strong positive image toward soy as well as on the price competitiveness of soy protein compared to animal-based protein.

What does the future look like?

The trend towards increased protein consumption overall suggests that alternative meat is not just a fad, but has a chance to develop a permanent market in Japan, not necessarily as an alternative to meat or dairy, but as an additional source of affordable protein. We expect to see diversification from soy and into other plant ingredients. Konnyaku (konjac potato) is one that is getting recent play in alternative seafood products such as imitation unagi eel and pea protein suppliers from overseas have shown interest in the Japanese market.

However we expect that successful meat alternatives in Japan will need to continue to focus their marketing on taste, competitive price and “healthier” messaging, and not assume that mainstream Japanese consumers will pay a premium at the moment for plant-based products marketed as a sustainable or eco-friendly “alternative”.

[1] My Voice Com, Dec 16 2019, Survey on Soy Food Products
https://prtimes.jp/main/html/rd/p/000000820.000007815.html

Coronavirus spurring change and innovation in Japan’s restaurants and retail sector

The coronavirus has hit the world hard and it’s not slowing down. While the number of confirmed COVID19 cases in Japan has been relatively low compared to some other countries, the impact on the Japanese economy has been significant and has been spurring significant changes in the food service and retail industries over the past few months. Many of these changes are likely to have long-reaching impact.

Above: Family restaurant chain Saizeriya now offers delivery as well as other measures to reduce staff and customer interaction.

Food delivery services are booming in Japan

As people refrain from going out, Japanese consumers have increasingly started to use food delivery apps such as Uber Eats. Uber Eats had about 1.6 million users this January, but jumped to almost 2 million by March and even higher in the following months. Other delivery apps include Demae-can, dDelivery and Rakuten Delivery, and the competition in the delivery market has been fierce. In response to the growing number of people using restaurant delivery services, family restaurant giant Saizeriya decided to start delivery too this month. As recently as the end of last year, the president of Saizeriya said that he was not considering offering a delivery option- the impact of the coronavirus has been enormous enough to cause a 180-degree turnaround in corporate policy.

The online supermarket industry has a very small share of food sales in Japan, but new consumer shopping habits brought on by corona have provided a tailwind for this industry. According to a recent survey, about 60% of online supermarket users say that the frequency of their online supermarket use has increased in the last three months (January to March, 2020). As the number of users grow, retailers have started to focus more on their online supermarkets. The largest retail company in Japan, AEON, has announced that it will increase its online supermarket sales by 50% YoY by early next year, which would grow online sales to about 10% of its in-store food sales. Supermarket giant, Ito-Yokado has also just started full-scale operation of its online supermarket app. These market leaders’ moves are worth paying attention to as they could well inspire other players and bring significant changes to the online supermarket industry.

Infection control measures are changing the restaurant and retail landscape 

There are currently no standardized Japanese government requirements for infection control in stores, so shops and restaurants are on their own to find ways to make consumers feel safe. To ensure that guests feel comfortable eating, many restaurants have taken various measures against coronavirus. This can include plastic shields between the tables or a reduced number of chairs to prevent customers from getting too close to each other. What the major food service chains do always draw attention. Some are trying fairly analog ideas – Saizeriya has stopped having staff take orders and started letting customers to fill out their own orders on paper to minimize the contact between customers and staff.

Kichiri, however, is more extreme. Kichiri is an izakaya pub chain with around 40 restaurants in Japan. A walk-through sanitizing gate was installed at the entrance. When customers pass through, hypochlorous acid water (HAW) is sprayed all over the body from four pipes installed at both ends of the gate. The number of customers entering the restaurant is checked through a monitor. Customers are then asked to take a piece of paper with a map of the restaurant with table numbers written on it and move to their seats by themselves. Customers can then use their smartphones to order food by scanning a QR code on the table to access a website and check a menu.

There are changes on the retail side as well. Lines are drawn on the ground at regular intervals in front of the cash register to encourage social distancing. Transparent shields hang in front of cash registers to prevent infections between clerks and customers. But the most significant change has been the rapid shift to cashless payment. While Japan’s government had made some effort to promote cashless payment systems before corona arrived, Japan has been I famously reluctant to give up its love of cash and had been lagging in the Asian region in terms of cashless payments. But once again, coronavirus is pushing the adoption of new technologies. Various prepaid smart cards and mobile phone payment apps are accepted in stores, taxis and restaurants, with some even offering discounts for using cashless options.

Izakayas have been forced to venture into new business models and revenue streams

Coronavirus has had an impact on all types of restaurants, but the impact on izakayas has been particularly significant. Significant enough that some izakaya chains have even decided to branch out into new services. For example, Watami, the second largest izakaya chain in Japan, with many different izakaya brands in its portfolio, has entered the human resource staffing business. As a result of corona, Watami closed its outlets for a period of time, leaving many of its employees without jobs. To support these employees, Watami is planning to arrange placements for 780 of its full-time and 10,000 of its part-time employees with supermarkets, farms and elderly care facilities which are facing labor shortages. Another example is the Ap Company which runs Tsukada Farm, an izakaya chain operating mainly in the Tokyo metropolitan area. Since the sales of izakaya dropped significantly, Ap Company has decided to reduce the number of izakaya and start something new. Tsukada Farm has opted for a full renovation of some of its izakayas from pubs into a teishoku set-meal restaurant concept called Tsukada Shokudo.

Retail innovation includes a growth in unmanned convenience stores

Another corona era innovation is seen in JR East’s launch of unmanned convenience stores. The advantage of unmanned convenience stores is that they do not require face-to-face interaction with customers, as they use a camera in the store to identify the products customers pick up. At the exit, details of the purchase will be displayed on the touch screen and customers just need to hold a prepaid transportation card over a device to complete the payment and the exit gate will open. The company plans to expand its store network to 100 stores within four years, taking advantage of growing desire for less contact with people at stores. The first store was opened at Takanawa Gateway Station, the newest station on Tokyo’s central Yamanote Line in March of this year.

With the coronavirus showing no signs of settling soon, we expect the Japan restaurant and retail industries will be forced to continue to innovate and react quickly to the changing market.

CBD Products Making a Move into Mainstream Channels in Japan

CBD products are increasing in the Japanese market, taking steps to move from a niche product into mainstream channels. Although the Japanese government hasn’t explicitly legalized CBD (and continues to strictly ban cannabis itself and any trace of THC),  Japan allows importation of some types of CBD products as long as the products remain within the guidelines of several key relevant laws. CBD products first entered Japan around 2016 and have been continually expanding their market. Now, some mainstream retail chains have begun to handle CBD products and a CBD specialty store opened just this year in Tokyo’s trendy Harajuku.

cbd products in japan

Discount retailer Don Quijote has shelves of CBD vape liquid and HealthyTOKYO cafe in Harajuku offers original CBD beverages.

Don Quijote, one of the largest discount chain stores in Japan, with almost 400 branches nationally, sells a large variety of CBD vape products such as CBD vape liquids, cartridges, and disposable vaping devices. Don Quijote handles overseas brands such as NATUuR CBD, as well as domestic CBD vape liquid brands like Kamikaze and Tsukinoha. Not all branches of Don Quijote handle CBD products, but the fact that this kind of mega-chain has started to sell CBD indicates that CBD awareness has moved to the next level in the Japanese market.

Vape products are not the only CBD products that you can find in Japan. Biople by CosmeKitchen, a shop that sells natural and organic cosmetics, sells foreign branded health and beauty CBD products such as EliXinol’s CBD oil, Endoca’s CBD capsules and Medeterra’s CBD cream. Biople has 18 stores in Japan and some outlets are located in well-known department stores such as Lumine and OIOI (Marui).

While Don Quijote and Biople sell a variety of CBD products, they don’t have their own branded products. HealthyTOKYO CBD Shop & Café, the first CBD specialty store in Japan just opened this year, sells its own branded CBD products. HealthyTOKYO not only sells CBD oil, cream, and capsules but also CBD snacks, coffees, teas and cocoa in their café.  According to the manager, their own private brand HealthyTOKYO CBD is the best-selling of their product lines. The store’s main customers are non-Japanese people and travelers, and therefore sales have unfortunately dropped recently due to COVID19 and the decline in tourists.

With CBD products beginning to appear in popular discount chains and well-known department stores, as well as many online channels, it is clear that CBD has entered a new phase of market expansion. As more people become aware of what CBD is, we expect further domestic product development, increased imports and potentially new usages in health, beauty and food products.

Interested in understanding more about the CBD market in Japan or understanding the steps that exporters have to take in order to export CBD products to Japan? Reach out to us at inquiry@merosconsulting.com


What is CBD?

CBD (Cannabidiol) is a chemical compound found in cannabis. Unlike the cannabis compound THC (Tetrahydrocannabinol) that makes a user feel “high”, the chemical compound CBD is associated with health benefits such as relaxation of the mind and body and relief of anxiety and worry. Products such as oils, cosmetics, and even snacks that contain CBD are increasingly popular in many countries around the world.