Japan’s Food Manufacturers Team Up for Survival

The low birth rate, aging population and popularity of light eating for health have drastically changed Japan’s food industry.

Japan’s Ministry of Agriculture, Forestry and Fisheries said the nation’s food industry market topped at 93.1 trillion yen in 1998 and has decreased by around 8 trillion yen to 85.4 trillion yen in 2005.

Against this backdrop, Japan’s food manufacturers have struggled to overcome difficulties by mergers, partnership and efficiency.

Japan’s donut maker ‘Mister Donut’ and hamburger chain ‘MOS Burger’ said Wednesday they agreed to cooperation in terms of capital and operations. As the number of youths, major consumers of donuts and hamburgers, has gradually decreased and the prices of cooking ingredients have skyrocketed, the two parties decided to cooperate in purchase of cooking ingredients and overseas operations.

In 2007, Japan’s largest tomato processing firm ‘Kagome’ and ‘Asahi Breweries,’ the nation’s largest beer maker by sales, reached a comprehensive agreement. At that time, Asahi said it needed concerted efforts with the tomato processing firm since increasingly more consumers were anxious about their health and that the young people began notably avoiding alcohol consumption.

Their first joint product since the agreement on partnership was a type of low-alcohol beverage based on tomato juice. They have set up 44 joint delivery networks across the nation. Now, trucks with Asahi beers are filled up with Kagome juices at Kagome factories, and they deliver both beers and juices to stores.

Japan’s second largest Gyudong (referring to a bowl of rice topped with seasoned beef) restaurant chain ‘Sukiya’ acquired a family restaurant chain and a sushi chain last year for the efficient use of cooking ingredients and better distribution.

It believes that it can reduce cost by purchasing beef in bulk and supplying beef belly for Sukiya, thigh meat and aitchbone for family restaurant chain ‘Coco’s’ and roast for ‘Yakiniku’ (meaning ‘grilled meat’). Sukiya has acquired 11 firms including a soy sauce maker and a pasta maker since 2000.

Japan’s ramen giant ‘Nissin’ bought Japan’s tobacco maker and frozen food maker in November 2007. They think more and more consumers will want high-quality frozen food, instead of instant noodles, which is not good for health, with an increase in the number of single households with high income high-maintenance members.

sya@donga.com