WUSATA NPEW Inbound Trade Mission Market Guide Questionnaire

JAPAN MARKET SUMMARY

Japan continues to represent one of the best opportunities in the world for U.S. exporters of food products. In 2014, Japan imported US$61 billion value of agricultural products and from the US, $13.93 billion worth of agricultural and fish products. For the US Japan is 4th largest export market for agriculture. From the demographic point of view, Japan has high per capita GDP spending on food, and its general people have traditionally been enjoying diet rich in fish, rice and vegetables. It should be noted that Japan consumes 1,000 fewer calories per day than Americans. Japan is heading to rapidly aging with less children society. Japan’s food self- sufficiency rate by calorie basis is 39% as of 2011, and 67% by value basis. So far Japan has typically importing calorie-dense, low value agricultural products. There are tremendous opportunities for U.S. exporters who are willing to follow the strict Japanese regulations and keep up with the fast-moving trends in this market. Japan’s market for high-value foods and beverages continues to evolve, with the latest trends focusing on functional, healthy and nutritious foods.

Another emerging opportunity in Japan for the international food suppliers will be the coming huge tourism boom gearing to the 2020 Tokyo Olympic Games. Japanese government has pledged to transform Japan into the World top class tourism-oriented nation by enacting ‘Tourism Nation Promotion Law’ in 2007. The number of foreign visitors to Japan reached to 24million in Japan with 21% increase from 2015. More than 70% tourists are from the eastern Asia (China, Korea, Taiwan and Hong Kong are the dominant top 4). The goal of the Japanese

government by 2020 is to attract more than 40 million tourists to Japan. According to the Japanese National Tourism Office, almost 80% of travelers answered that their purpose of visiting Japan was to enjoy Japanese food culture, surpassing ‘to do shopping’ and ‘to visit Japanese temples and shrines’ which used to be the big motives. Also the answers to the question what the foreign travelers want to eat most in Japan is not really Japanese traditional cuisines, like sushi, tempura and sashimi. The 2016 stats taken by the Japanese travel magazine shows the most popular food items/menus among the foreign travelers to Japan are:

1. Beef (sukiyaki, shabu shabu, yakiniku <Korean barbecue>) 2. Rahmen noodles 3. Tonkatsu (breaded and deep-fried pork cutlet) 4. Okonomiyaki (savory pancakes with mix of seafood, vegetables and meat ingredients)

in Osaka and Hiroshima 5. Chinese dimsum 6. Cakes and breads 7. Curry and rice

*Sushi, tempura, sashimi, Udon (pronounced as woodong) are of course still very popular items. As trip to Japan is no longer a privilege for the limited number of wealthy people, more consumption opportunities will be created in the ordinary local restaurants friendly to the foreign travelers and family members. According to the Japanese government press release, in 2016 these 24 million foreign travelers spent total US$36 billion in Japan. 33.6% of the total expenditure went to the lodging, 30% for shopping and 20% for food and drinks. Still there are big language barriers in the local hotels and restaurants preventing potential foreign people from trying to enter the outlets to order the menus. There are more tourists wishing to have secured food and drinks for halal, kosher, vegetarians, vegans, gluten-free, non-GMO and all the rest of designated allergens.

ATO Japan has just published a new guidebook with support by the Japanese National Tourism Office and Gurunavi, the Japan’s largest gourmet on-line site partnering with Trip Advisor, which aims to assist and help Japanese HRI sectors to prepare for the influx of more foreign travelers to Japan. Japanese food market will go into a new era where all the players in the distribution channels will be expected not only to be the steward of procuring safe, wholesome and sustainable food supply chain for the Japanese consumers but also to be the major communicator for the foreign residents/travelers in Japan who look for the precise and correct information of the product origins of every single food ingredient.

WUSATA companies can be a link to a successful food supply chain for one of the biggest final food consumption markets in the world for the next few years if they can respond to the needs from Japanese buyers who will request for the better communication on one hand and on the other thorough paperwork and scientifically proven food safety and wholesomeness to comply with the Japanese strict regulations and standard.

MARKET STATISTICS Capital: Tokyo Population: 126 million Market rank: Ranked 6 out of 125 countries by the World Economic Forum: Global

Competiveness Report 2015-2016 Currency: Japanese Yen Typical Household Income: The average household net-adjusted disposable income per capita

is US$27,323 a year, less than the OECD average of USD 29 016 a year. There is a considerable gap between the richest and poorest – the top 20% of the population earn more than six times as much as the bottom 20%.

Total Food Market Value: The total food and beverage market size of Japan is estimated as as US$584 billion in 2015

Imported Food Value: 50 billion US in 2015

Imported Organic Food Value: N/A but the 2010 stats say the total sales of the Japanese organic food and beverages are 15 billion US dollars, and the per-capita annual consumption for the organic food/beverage is about 10 USD (vs. 85USD in the USA & 100USD in Germany). SUCCESSFUL AND SOUGHT AFTER US FOOD PRODUCTS What are the most successful food items or categories that US exporters export to your market? General Food examples: *Starbucks coffee brand *Hawaiian chips (with various brands) *Hawaiian pancakes (with various brands) *Flavored pop corns (with various brands) *Spam *Heinz sauce *Campbell soups *Monster energy drinks Organic Food examples: *There seems to be no huge hit by the American organic products, but the trend shows organic energy bars, organic wines, organic olive oils, organic coffees and tea, organic vegetables and fruits are the items Japanese consumers identify fairly well at their shopping opportunities.

Specialty Food examples: *Some of the California wines *Ben & Jerry’s Ice-creams *California dried fruits and nuts (fresh almond, walnuts, black mission figs, prunes) IMPORT PROCEDURES AND REQUIREMENTS TRANSPORTATION & STORAGE: MARKET ENTRY INFORMATION: In order for the WUSATA companies to take a look at the world famous Japanese food distribution systems and fine-tuned import regulations and rules per product and category, please visit the following site to download the USDA GAIN Report titled ‘Japan Exporter Guide Updated 2015. ‘ https://www.susta.org/downloads/files/REPORTSgains/Exporter%20Guide_Osaka%20%20ATO_Japan_12-29-2015.pdf This USDA GAIN Report covers very concise knowledge- and experience-based information regarding the Japanese food rules/regulations, commercial customs and protocols for the US companies to prepare for approaching to Japan with their products. Also the report contains useful information and pointers to address the questions below, too. Where to Start LOCAL BUSINESS CUSTOMS & PRACTICES: Please provide a summary of local customs and practices for the following areas. Please feel free to include any missing areas that are especially important for US companies to know. Relationship Building & Social Networking: Meeting Local Tastes: Language: Name Cards: