Japan Chocolate Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Japan Chocolate Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Japan chocolate market is projected to grow at a CAGR of 7.5% over the forecast period (2020 - 2027).

High cacao chocolate played a significant role in the expansion of chocolate confectionery in Japan due to the widespread and prominent publicity across various media in Japan regarding the health benefits of cacao including helping to reduce blood pressure and to prevent arteriosclerosis, obesity, and cancer, as well as minimizing levels of stress and the effects of allergies and rheumatism. Furthermore, with government policy and employer initiatives driving an increase in the number of women in the paid workforce in an effort to address the country’s labor shortage, female consumers are spending their increased purchasing power on premium chocolate treats to reward themselves for their hard work.

Although the COVID-19 pandemic is still transforming the growth of numerous industries, the outbreak's immediate impact is varied. While some sectors may experience a decline in demand, many others continue to stay unaffected and exhibit strong development prospects. ​An increasing number of specialty stores had also remained closed for an extended period owing to disruptions in the supply chain of raw materials followed by lockdowns, resulting in lower volume consumption of premium chocolates, and an increasing number of premium chocolate manufacturers reported declining sales of their premium chocolate. For instance, Barry Callebaut, a Belgian manufacturer of premium chocolate products, reported a slowdown in the first half of the year, with volume plummeting by 143% in the third quarter (ending May 31, 2020). As lockdowns eased, the company saw an upsurge in chocolate sales in June 2020, improving its mid-term outlook.​

Consumers seeking to consume premium chocolates are more likely to demand greater transparency from the product, as considerations, such as authenticity, are some of the prime factors that are likely to boost the consumption of premium chocolates.​​

Key Market TrendsRising Demand for Free-From Products

The rise in health consciousness among consumers and the resulting increase in awareness about the disadvantages of consuming artificial ingredients fuel the sales of organic and sugar-free chocolate in the Japanese market.

Healthier products’ sales are correlated with consumer transformations and shifts in choices. Similarly, the market for “free-from” products witnessed consistent growth in the region. The market for “free-from” products is largely driven by today’s ingredient-conscious shoppers, which led the market to flourish with gluten-free brands, sugar-free confectioneries, and vegan chocolates.As the trend of plant-based foods and non-dairy products continues to rise, the market is witnessing a high demand for dairy-free chocolate products. Currently, several innovations are being made in the industry in the better-for-you category. As a result, chocolates that are free from dairy, gluten, and soy ingredients are now gaining popularity in the market studied. As consumer habits and diets change rapidly, the market is expected to witness more product launches related to dairy-free chocolates. For instance, in January 2020, Japanese start-up True Food & Design developed a healthy, vegan, natural chocolate product with zero sugar, sugar alcohol, and artificial sweeteners. The product, True Food Chocolate, contains only six ingredients: cacao, coconut, chicory, vanilla, hemp seed, and monk fruit. It is available in two flavors, plain and dark.

Supermarket/Hypermarket is the Most Preferred Distribution Channel

The hypermarkets/supermarkets segment of the market accounts for a considerable share in the chocolate sales, with dark chocolates, chocolate bars, multipacks, and boxed chocolates being the most popular choice among the consumers. With the wider shelf space and greater product exhibition, players are expanding their product availability in various supermarket chains. The factors, such as business expansion and rising number of hypermarkets and supermarkets, add to the sales of these retail formats and significantly contribute to the high penetration into the chocolate market. Shopping at the hypermarkets/supermarkets is also perceived useful due to the frequent price promotions and the global players and regional players adopt unique strategies to launch their products in these stores, so as to increase their consumer base through the target market.

Keio Store, a supermarket chain operated by Keio Group, is a familiar sight across Japan. As Keio Stores are commonly found in the suburbs and next to train stations, they are visited by many people to buy daily groceries.Moreover, the increasing market share of the hypermarket segment may be attributed to the consumers’ practice of purchasing products in bulk and family packs. Consumers prefer making fewer trips to the stores to receive more value for their money, which, in turn, increases the sales of chocolate and other confectionery products in Japan.​​ ​

Competitive Landscape

Japan Chocolate Market is consolidated due to the major players having majority of the market share. Some of the leading players in the Japan chocolate market are Nestle SA, Meiji Holdings Co., Ltd., Morinaga & Company, Ltd., Lindt & Sprüngli AG, and Lotte Corporation among others. The major players in the market are adopting product innovation as their major strategy to attract consumers. Owing to the changing tastes and preferences of consumers, there have been considerable developments of products by various market players.

The players in the market studied, including Yildiz Holding and Ferrero SpA, have been operating with well-established chocolate forms and flavors, with periodic addition of new flavors in this segment. Additionally, these players are looking for ways to reach a wider audience.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies

Mars, Incorporated
Ferrero SpA
The Hershey Company
Nestle SA
Lindt & Sprüngli AG
Meiji Holdings Co., Ltd.
Morinaga & Company, Ltd.
Lotte Corporation
Royce' Confect Co., Ltd.
Yuraku Seika