JAPANESE FOOD MARKET AND THEJETRO ZONE AT

Mio KAWADA

Director in Charge of International Trade Fairs in Japan JETRO Tokyo

ABOUT JETRO
JETRO: Japan External Trade Organization
1.Our mission: - To Promote trade and investment between Japan and the rest of the world 2.Our activities - Promoting cross-border business tie-ups in high-tech and other key industry sectors - Facilitating economic growth in developing countries through trade promotion - Assisting Japans small and medium-sized enterprises (SMEs) to develop markets overseas - Helping Japanese firms expand overseas and aiding in protecting their intellectual property

Our Overseas Offices: 73 offices in 55countries

Our Offices in Africa

Cairo

Nairobi Abidjan Lagos Johannesburg

CHAPTER 1 OVERVIEW OF THE JAPANESE FOOD MARKET

1. OVERVIEW of Japans Food Market

Japanese Food Market size for 2009 : About 492 Billion USD
260 240 220 200 180 160 140 120 100 80 60 40 20 0 2005 2006 2007 2008 2009
Source: World Consumer Income and Expenditure Patterns 2011 , Euromonitor International

Alcoholic Drinks
Wine, Spirits, Beer

Non-Alcoholic Beverages

Coffee, tea, cocoa, mineral waters, soft drinks, fruit, vegetable juices

Sugar and confectionery

Milk, Cheese and Eggs Fish and Sea food Meat

Cane, jams, marmalades, compotes, jellies, fruit purees and pastes, honey, maple syrup, chocolate, chewing gums, etc

Milk, cream and yoghurt containing sugar, cocoa, fruit or flavourings, dairy products not based on milk such as soya milk.

Fish and seafood purchased live for consumption as food, Excludes: soups, broths and stocks containing fish and seafood.

Animals and poultry purchased live for consumption as food. Excludes: land and sea snails, lard and fats, soups, broths and stocks containing meat.

1. OVERVIEW of Japans Food Market

Japans food self-sufficiency ratio (based on calories):

60% of food supply depends on import.

40%

Import Value of food from South Africa for 2009: Approx. 190million USD =Ranked as 30th

Major food imports from South Africa SourceMinistry of Agriculture,Forestry and Fisheries 1) Crude Sugar: About 55 Million USD 2) Grapefruit: About 47 Million USD 3) Canned Peaches: About 12 Million USD

CHAPTER 2 JAPANESE LIFESTYLE AND TRENDS IN THE FOOD BUSINESS

2-1. KEYWORD NO. 1: DIVERSITY

Japanese people have a strong interest in eating Cuisines from all over the world can be found in Japan: not only Japanese food Cooking international cuisines at home

Team Foodex in an African restaurant.

2-1. KEYWORD NO. 2: NOVELTY

The Japanese consumers are continuously searching for new products Looking out for new and different tastes

2-1. KEYWORD NO. 3: EASY COOKING & EASY EATING

The number of working women is increasing, resulting in less time in the kitchen. Long life expectancy. Trend toward nuclear families. Microwave cooking is very popular.

2-1. KEYWORD NO. 3: EASY COOKING & EASY EATING

Convenience stores operating 24 hours a day are the driver of easy eating. Food for busy people
-More than 20% of Japanese men in their 20s and 30s rarely have breakfast.

People expect added value (healthy, safe, high quality, etc) with easy cooking products.
-easy + healthy = retort pouch with lower calories -easy + safe = rice in a sterile package -easy + high quality = pre-seasoned sauce

2-1. KEYWORD NO. 4: HEALTH & BEAUTY

2-1. KEYWORD NO. 4: HEALTH & BEAUTY

Food businesses are developing functional foods. Conventional foodstuff is also attracting new attention.
-Sesames -Cocoas -Chocolates -Variety of teas

Low cholesterol, low calories, organic

2-1. KEYWORD NO. 5: SAFETY

Various problems in the past made Japanese people sensitive to food safety. Traceability, no additives, no preservatives.

Strict guidelines for labeling.

2-1. KEYWORD NO. 6: LOW PRICE AND GOOD QUALITY

Rise of the Private Brands, or Private Labels *Private brand products: Developed by specific chain stores -Seven-Eleven -Aeon

2-1. KEYWORD NO. 7: ECO FOOD

The recycling boxes for plastic trays, pet bottles and milk packages The logo expressing eco-friendly Thin bottles produced with less plastic Eco-bananas

2-1. KEYWORD NO. 8: RAW MATERIALS PRICE RISE

The price of raw materials is rising in Japan, in line with the global price level increase.
Unite: USD/ ton(Wheat) / pound(Sugar)

Source: Ministry of Agriculture, Forestry and Fisheries(Wheat) IMF Primary Commodity Prices(Sugar)

2-1. KEYWORDS FOR PACKAGING

Eco-friendly Individual Consumption Convenience

Less trash Refillable

Individual cooking Small quantities

Braille Re-sealable Gathered in 100g each

2-1. KEYWORD NO. 9: AFTER THE GREAT EARTHQUAKE

Situation of the damage
*the figures are as of June 28th, 2011

-15,506 dead -7,297 missing -5,386 injured -112,405 evacuated

Magnitude 9.0

-209,839 buildings are completely / half destroyed -400,440 buildings are partly damaged / destroyed
Source : Cabinet Office, Government of Japan

2-1. KEYWORD NO. 9: AFTER THE GREAT EARTHQUAKE

Area damaged by Earthquake

Area damaged by Tsunami Fukushima Dai-ichi Nuclear Power Plant accident area TOKYO It is 220km away from Tokyo

2-1. KEYWORD NO. 9: AFTER THE GREAT EARTHQUAKE

Reconstruction and recovery following the earthquake.

2-1. KEYWORD NO. 9: AFTER THE GREAT EARTHQUAKE

2-1. KEYWORD NO. 9: AFTER THE GREAT EARTHQUAKE

Area damaged by Tsunami

Area damaged by Earthquake Fukushima Dai-ichi Nuclear Power Plant accident area

TOKYO

2-1. KEYWORD NO. 9: AFTER THE GREAT EARTHQUAKE

Electric power supply is expected to be tight this summer.

From the website of Ministry of Economy, Trade and Industry, Japan

2-1. KEYWORD NO. 9: AFTER THE GREAT EARTHQUAKE

The degree of economic slowdown is expected to be much less than after the Lehman Brothers Shock.

CHAPTER 3 REGULATIONS ON FOOD IMPORTS

3-1. OUTLINE OF JAPANESE REGULATIONS ON FOOD IMPORTS

Food imports are monitored by the quarantine stations of the Ministry of Health, Labour and Welfare at the point of entry to Japan.

Important laws regulating food imports Food Sanitation Act

http://www.japaneselawtranslation.go.jp/law/detail_main?vm=&id=12

Plant Protection Act

http://www.cas.go.jp/jp/seisaku/hourei/data/ppa.pdf

Act on Domestic Animal Infectious Diseases Control

http://www.cas.go.jp/jp/seisaku/hourei/data/adaidc_2.pdf

3-1. OUTLINE OF JAPANESE REGULATIONS ON FOOD IMPORTS

Related Laws and Procedures
Fruits and Vegetables Food Sanitation Act Plant Protection Act Act on Domestic Animal Infectious Diseases Control Customs Tariff Law etc. Meats and Meat Products Fish Products Other Processed Foods

Food Sanitation Inspection Plant Quarantine

Animal Quarantine Customs Inspection

3-2. FOOD SANITATION ACT

Fundamental law to ensure food safety Sets the specifications and standards for food (ex. food additives, microbes, remaining agricultural chemicals, packages etc.) In line with this law all the foods imported are inspected at quarantine stations.

3-3. PLANT PROTECTION ACT (1)

To prevent the entry and spread of insects & pests harmful to plants
Plants

Items subject to plant quarantine

Fresh fruits, vegetables and nuts Frozen or dried fruits and vegetables Cereal grains and flour Legumes Flavorings and spices (coffee beans and spices) Raw materials for plant originated herbal medicine

Primary agricultural products

Grapeseed, sesame, etc. for raw materials of fat and oil

3-3. PLANT PROTECTION ACT (2)

Check Points
1) Whether an item consists of an import- prohibited plant? 2) Which part of the plant? 3) Whether a phytosanitary certificate is appended?

4) Whether any soil is attached?

5) Whether any diseased organisms, insects, pests, or parasites are present? 6) Whether the fruit is from a specific place from where Japan cannot import

3-4. ACT ON DOMESTIC ANIMAL INFECTIOUS DISEASES CONTROL (1)

To prevent the spread of infectious livestock diseases.

Items subject to animal quarantine

Egg (hen, duck, turkey, etc)

Bone (unprocessed bone, crushed bone, etc)

Meat (fresh, frozen, chilled, salted, etc) Fat (fresh, frozen, chilled, salted, etc)

Internal organs (fresh, frozen, chilled, salted, billed in casing)

Raw milk Ham, sausage, bacon (all kinds)

3-4. ACT ON DOMESTIC ANIMAL INFECTIOUS DISEASES CONTROL (2)

Check Points 1) Whether an item consists of an importprohibited item? 2) Whether a Health Certificate is appended?

3) Whether there is any abnormality in the cargo?

4) Whether an inspection or sterilization is required?

3-5. PHARMACEUTICAL AFFAIRS ACT (1)

Basic regulation for products/items classified as medicine.
The following products are to be subject to this act.

Medical Products Quasi-Drugs Cosmetics Medical Devices

If your products are classified as medicine, only importers with specific licenses can import them. The customs clearance procedures are very complicated and time-consuming.

3-5. PHARMACEUTICAL AFFAIRS ACT (2)

Check whether your products are classified as a medicine.
If your products meet one of the conditions listed below, they are classified as medicine and regulated by the act.

1) Listed on the Japanese Pharmacopoeia.

http://jpdb.nihs.go.jp/jp15e/

2) Use ingredients enumerated on the medical ingredients list. 3) Specify medical effects of a product on the package, flyer or brochure etc.

eg. cure gastric cancer, restore youth, purify blood etc.

3-6. POSITIVE LIST SYSTEM (1)

Sets the maximum limits of agricultural chemical residues that can be found in foods. Agricultural chemicals: pesticides, feed additives and veterinary drugs.

Chemicals not mentioned on the list can be used at a maximum of 0.01ppm.

Foods exceeding the amount of chemicals are not allowed to be sold in the Japanese market.
<Reference>
http://www.mhlw.go.jp/english/topics/foodsafety/positivelist060228/index.html

3-6. POSITIVE LIST SYSTEM (2)

Maximum Residue Limits (MRLs) : 799 substances

For the individual limit of each substance, please check MRLs Data Base

http://www.m5.ws001.squarestart.ne.jp/foundation/search.html

Applicable for agricultural chemicals without MRLs (same as that of European Union)

Uniform Limit: 0.01ppm

Not subject to the positive list system

Exempted Substances: 65 substances

http://www.ffcr.or.jp/zaidan/FFCRHOME.nsf/pages/MRLs-p-ES

3-7. FOOD ADDITIVES (1)

Food Additives Preservatives, Sweeteners, Colorings, flavorings etc.
Food Sanitation Act lists food additives that can be used in foods.

Foods containing food additives that do not appear on the list are prohibited from being imported into Japan.

3-7. FOOD ADDITIVES (2)

Permitted food additives are classified into 4 categories as follows: 1) Designated additives (413 substances) 2) Existing additives (365 substances)
eg: Benzoic acid, calcium carbonate, citric acid etc.

eg: Orange colour, palm oil caroten, pectin etc.

3) Natural flavoring (about 600 substances)

eg: Aloe, durian, honey etc.

4) General food additives (about 100 substances)

eg: Strawberry juice, green tea etc.

3-7. FOOD ADDITIVES (3)

Attention must be paid to the usage standards of food additives: (maximum quantity limits, purpose condition etc.) Some food additives are not permitted to be used in foods, even though they may be legal in your country. <Information>
http://www.ffcr.or.jp/zaidan/FFCRHOME.nsf/pages/e-foodadditives

3-8. WASHINGTON CONVENTION (1)

CITES = Washington Convention
Convention on International Trade in Endangered Species of Wild Fauna and Flora

Regulates an excess of commercial trade of endangered wild animals and plants in order to ensure their survival.

3-8. WASHINGTON CONVENTION (2)

All endangered species are classified into 3 categories according to the level of endangerment:
1) Appendix I (species in danger of extinction)
.

Trade of these species are permitted only for academic purposes. eg. African Elephant, Certain species of Aloe, etc 2) Appendix II (species of which trade must be controlled) An export permit issued by the authority of the country of export is required. eg. Cactus, Orchids (including wild vanilla), African manatee, etc. 3) Appendix III (species that are protected in at least one country) An export permit issued by the authority of the country that included the species concerned in the Appendix III is required.
eg. Anteater from Botswana, Pink Pigeon from Mauritius

3-9. QUALITY LABELING SYSTEM (1)

Imported foods as well as domestic products in Japan, must display the appropriate food labels when sold in Japan. Items that have to be listed on food labels 1) Fresh produce
Product name Country of origin

2) Processed food

Product name List of ingredients Net contents Best-before date Preservation method Country of origin Importers name and address

3-9. QUALITY LABELING SYSTEM (2)

When sold in Japan, all ingredients must be listed on the labels of the product in Japanese.
Ingredients should cover all the items used in the product.
Ingredients (including food additives) must be listed in order from highest to lowest, according to their specific weighting in the product.
An exporter will prepare the label with an importer. The exporter has to provide accurate information of ingredients (including additives) so that an importer can make correct labels.

3-9. QUALITY LABELING SYSTEM (3)

Ingredients known as allergens must be listed on package labels.
* Number of people who suffer from food allergies is increasing. Labeling Shrimp/Prawn, Crabs, Wheat, Buckwheat, Eggs, Mandatory Milk, Peanuts Labeling Recommended Abalone, Squid, Salmon, Salmon roe, Bananas, Mackerel, Beef, Pork, Chicken, Oranges, Peaches, Kiwi fruit, Apples, Walnuts, Soybeans, Yams, Gelatin, Matsutake mushroom

Eg: Emulsifiers (derived from soybeans) Vegetable fats and oils (containing soybean oil)

3-9. QUALITY LABELING SYSTEM (4)

Product Name Ingredients Net Contents Best-before Date Description of a food additive: Emulsifier (derived from soybeans)

Preservation Method

Country of Origin

Importer Name

Nutritional Ingredients and Calories

3-9. QUALITY LABELING SYSTEM (5)

Labeling for organic agricultural products in Japan The JAS (Japanese Agricultural Standard) Law sets the specifications and standards for organic agricultural products. Registered certifying bodies check whether products comply with JAS standards. Only certified foods can display the JAS mark and the phrase Organic.
Detailed Information:

http://www.maff.go.jp/e/jas/specific/organic.html

3-9. QUALITY LABELING SYSTEM (6)

How can imported foods be organic in the Japanese market? CASE 1: Producers attach the JAS mark.
Ministry of Agriculture, Forestry and Fisheries (2) accreditation (1) application

Registered Overseas Certifying Bodies (3) certification Producers, Manufacturers, Farmers Attach the JAS mark and export Importers

3-9. QUALITY LABELING SYSTEM (7)

CASE 2: Importers attach the JAS mark.
ATTENTION CASE 2 is only applicable to countries (27 EU countries, Australia, U.S.A., Argentina, New Zealand and Switzerland) whose organic rules and standards are approved as equivalent to Japanese ones.

Ministry of Agriculture, Forestry and Fisheries (2) accreditation (1) application Scheme of a country of export Producers, Manufacturers, Farmers (2) Issuance of certificate Overseas government (1) certification Overseas certifying body

Registered Japanese Certifying Bodies

(3) certification

Attach the JAS mark

Importers

3-10. FOOD IMPORT PROCEDURES (1) Flow Chart Shipper

Processed Foods Seafood Fruits Vegetables Meats Processed meats

Plant Quarantine

Animal Quarantine

Declaration with Notification Form for Importation of Foods

Declaration with Form Display Only

Food Sanitation Inspection

Customs Inspection

3-10. REQUIRED DOCUMENTS (2) FOOD IMPORT PROCEDURES

Exporter must prepare List of Ingredients for each item Manufacturing Process Chart for each item Invoice Packing List
Only when required

Phytosanitary Certificate Certificate of Analysis Certificate of Origin

*Please discuss with your customs clearance agent

Importer will prepare

- The official documents to declare at the quarantine stations

Notification Paper of Food Import

CHAPTER 4 JAPANESE BUSINESS PRACTICE

4-1. JAPANESE BUSINESS PRACTICE

1) Be patient:

Business may not proceed as quickly as you may expect

Intensive inspection of products quality

Japanese companies have to respond to the growing demand for food safety from consumers. It may take some time to get orders from Japanese companies.

Mutual understanding must be established.

4-2. JAPANESE BUSINESS PRACTICE

2) Consider the shelf life of products
It is desirable that your products have a shelf life of more than 1 year. Japanese importer is conscious of shelf life. Japanese consumer will not choose products with upcoming expiration dates

Shipping & Customs Clearance

1.5 2 months

4-3. JAPANESE BUSINESS PRACTICE

3) Develop buyers confidence in you!
Meet deadlines. Supply products stably. Do not change the price frequently. Respond quickly to inquiries from the importer.

If you fail to comply with your importers requests, the importer runs the risk of loosing confidence in the market. In this case, you will also lose your importers confidence.

CHAPTER 5
FOODEX JAPAN 2012 AND THE JETRO ZONE

5-1. OUTLINE OF THE EXHIBITION

5-1. OUTLINE OF THE EXHIBITION One of the largest food and beverage exhibitions in Asia and the Pacific region!

Over 2,500 exhibitors from 63 countries and regions 80,000 visitors are expected

5-1. OUTLINE OF THE EXHIBITION

FOODEX JAPAN 2012
*DATE: March 6 (Tue.) 9 (Fri.), 2012 *TIME: 10:00-17:00 (-16:30 on last day) *VENUE: Makuhari-Messe, Chiba, JAPAN *URL: http://www3.jma.or.jp/foodex/en/index.html

5-1. OUTLINE OF THE EXHIBITION

74% of exhibitors rate the show in general as excellent or very good. 85% of exhibitors are satisfied with the quality of visitors.
Visitors by industry sector (2011)
3.9% 0.9% 9.0% 14.5%

Distribution & Wholesale

24.7%

Food Service manufacturing

22.4%

24.6%

Retail Government & Association Hotel, Banquet & Leisure Press

5-2. ADVANTAGES OF PARTICIPATING IN THE JETRO ZONE

Participation Fee: USD 1,025 * About 86% discount compared with the normal participation fee7,300USD Exhibition Scale: 66 booths Support provided by JETRO:
1) Packaged booth includes basic equipment and decorations. 2) Transportation fee of exhibits is borne by JETRO. (special support for exhibitors from Africa) 3) Shared-basis interpreters for business negotiations will be prepared. 4) Individual consultation by experts of Japanese food industry will be available. 5) Free access to the business center and kitchen. 6) Promotion of the JETRO Zone to potential Japanese buyers will be done by JETRO.

5-3. SHOW RESULTS OF THE JETRO ZONE AT FOODEX JAPAN 2011

52 companies from 22 countries exhibited at the JETRO Zone. 2,314 business negotiations 1,057 contracts (including prospective ones) worth USD6,235,700 Exhibitor satisfaction: 100% of top two grades (on a 4-point scale)

5- 4. SUCCESS STORIES FROM THE JETRO ZONE

CASE 1: Fruits Jams from Madagascar (2008)
Refined packaging

Well-known certification: HACCP

Organically grown fruits

New flavor in the Japanese market

Sold at luxurious department store in Paris

5-4. SUCCESS STORIES FROM THE JETRO ZONE

CASE 1: Fruits Jams from Madagascar (2008) A contract with a Japanese importer.

More than 2,500 pods of jams imported into Japan.

Now sold at high-end bakery shops and on the internet.
http://www.s-at-t.com/

5- 4. SUCCESS STORIES FROM THE JETRO ZONE

CASE 2: Nougat from South Africa (2008)
Very soft: distinguishable from other nougats

Coated with highquality Belgian chocolate

No additives

Refined European packaging

5- 4. SUCCESS STORIES FROM THE JETRO ZONE

CASE 2: Nougat from South Africa (2008) A contract with a Japanese importer.

Shipped 110,000 nougats on September 2008.

Now sold in high-end supermarkets.

5-4. SUCCESS STORIES FROM THE JETRO ZONE

CASE 3: Cashew nuts from Kenya (2011)
Good quality
Cashew nuts had a huge demand in the Japanese market

Vacuum packed

Provided needed information on transportation

Developed a mutual- trust relationship

5- 4. SUCCESS STORIES FROM THE JETRO ZONE

CASE 3: Cashew nuts from Kenya (2011) Two contracts with Japanese nuts products makers. The exhibitor shipped a container of cashew nuts to each company. Contract of 120,000USD each.

Raw cashew nuts, shelled and sized, will be used as a table snack. Crumbs will be a condiment at curry shops.

5-5. HOW TO APPLY FOR PARTICIPATION IN JETRO ZONE AT FOODEX 2012

You will be able to get the information on the application from JETROs website!

http://www.jetro.go.jp/en/foodex2012 Step 1: Click on Red Exhibitors page button on the left of page Step 2: ID: foodex2012 Password: jetroapplication
Step 3: Follow the How to apply steps

5-5. HOW TO APPLY FOR PARTICIPATION IN JETRO ZONE AT FOODEX 2012 APPLICATION DEADLINE (Form 1A & Form 1B)

September 9, 2011

We are waiting for

your application!

THANK YOU