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New Japan Food & Drink Report Provides Independent Forecasts and Competitive Intelligence on Japan's Food & Drink Industry

Posted on: Wednesday, 9 May 2007, 06:00 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c56236) has announced the addition of "Japan Food And Drink Report Q1 2007" to their offering.

With financial results season well underway in Japan, the past two months have seen the country's leading food-&-drink industry players announce a host of cost-cutting pledges for 2007, as they strive to sustain profit growth in Japan's immense, but highly competitive, consumer marketplace. One event of particular note was leading soft drink manufacturer Coca-Cola West Holdings' (CCWH) announcement that it was looking to acquire a stake in yet another Coca-Cola bottler as it seeks to boost efficiency and profitability in line with its 2009 earnings targets.

In this new Japan Food & Drink Report for Q107, we examine the ongoing trend towards consolidation to boost efficiency, and explore why leading industry players continue to invest so heavily in a market with minimum growth potential. In our latest industry forecasts, we are predicting that food consumption in per-capita terms will increase by just 2.4% to 2011.

This moderate growth is attributable to numerous factors -- the effect that rising fuel costs are having on consumer confidence and the growth in discount retailing, which reduces value expenditure per volume unit bought -- to name just two. However, even with this marginal growth, per capita food consumption is set to stand at US$2,696 in 2011, up from US$2,634 in 2006 and it is this figure that goes some way to explaining why manufacturers continue to set ambitious targets for themselves, rather than simply settling for maintenance, thus freeing up greater funds for investment in higher-opportunity markets.

Strong sales in Japan are hugely important for local manufacturers. If a company can maintain profitable Japanese operations, it knows it's sitting on a relatively stable income source, thanks to the wealth and consumption-oriented culture of local consumers. With this income source secure, the company can then afford to advance into higher-risk, emerging markets, safe in the knowledge that it does not need immediate returns. However, it is the very act of maintaining profitable Japanese operations that is such hard work.

Japanese consumers demand innovative, high-value products at reasonable prices -- and the pace of the innovation cycle would surprise those even in some of the world's other most developed markets. Consequently, in competitive industries the market leader is often the one that has just unveiled a popular new product. Leading brewers Asahi and Kirin know this only too well. Kirin dominated the beer industry for the first nine months of 2006, thanks to strong sales of its new third-beer product. However, Asahi regained the lead during the last quarter, thanks to its own product launch in the category. Within this context, CCWH's motives are plain.

As part of the global Coca-Cola group the company cannot expand internationally and accordingly a streamlined, efficient local operation capable of responding quickly to the demands of the local market is vital.

Topics Covered:

-Business Environment. -Retail. -Food & Drink. -Tobacco. -Competitive Landscape.

Companies Mentioned:

-Ito En -Kirin -Lawson Inc -Seven & I Holdings Ltd -Seiyu -Asahi Breweries Ltd -Ajinomoto -Japan Tobacco (JT)

For more information, visit http://www.researchandmarkets.com/reports/c56236

Source: Business Wire

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