Organics in Japan: quality the route to success
had a major impact on market revenues, claims new research from
market analysts Organic Monitor.
New stricter Japanese regulations for organic food production have had a major impact on market revenues, claims new research from market analysts Organic Monitor. The research shows that the organic food market size has shrunk from over US$3 billion (€3.01bn) in 2000 to US$250 million in 2001 as a result of the new ruling.
In 2000 the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) introduced new guidelines for organic food production and marketing. Since April 2001 all organic foods marketed in Japan must meet Japanese Agricultural Standards (JAS) and the high standards have caused the majority of organic foods that were sold in Japan prior to April 2001 to lose their organic status.
Organic Monitor has released two studies on the Japanese organic food industry that aim to analyse the Japanese market for organic fresh fruit and vegetables and the Japanese market for organic beverages. The studies show that revenues of these two sectors have shrunk from about US$2 billion in 2000 to US$167.1 million in 2001.
The Japanese are one of the world's largest tea drinkers and this is a major reason behind the organic tea segment dominating the organic beverages category. The bulk of organic tea sold in Japan is domestically-grown green tea. The organic milk market is the smallest segment and this is due to the absence of formal regulations for organic livestock production, claims the report. The new JAS ruling does not cover organic meat and dairy products.
The new regulations have hit the organic fresh produce sector particularly hard with the Japanese market suffering from an acute shortage of JAS certified organic fruit and vegetables. Most organic fresh produce grown by Japanese farmers does not meet JAS regulations and few exporters have organic fruit and vegetables that are certified by a JAS accredited body. The supply shortage is exacerbated by high phytosanitary requirements that limit the amount of imported volumes of organic fresh produce coming into Japan. These factors have resulted in organic fruit and vegetable volumes shrinking by a factor of twenty in 2001 from 2000.
Since a spate of food scares begun in 1999, consumer demand for organic foods in Japan has grown dramatically. Japanese consumers are, not surprisingly, alarmed by food poisoning outbreaks, genetically modified corn entering the food chain, the BSE crisis and food labelling fraud. Organic Monitor writes that concern for food safety is to be a major driver of market growth along with the marketing efforts of the Japanese retailers.
The research highlighted the fact that there are currently many opportunities in the Japanese market for exporters of organic foods. Certification, distribution and product quality are some of the key success factors for companies looking to make a successful venture into the Japanese market. The market analysts claim that the price premium of organic foods is not a major barrier to Japanese consumers but it is imperative that products are of high quality.
