Japan Foodservice Market - Growth, Trends, COVID-19 Impact, and Forecast(2022 - 2027)

Japan Foodservice Market - Growth, Trends, COVID-19 Impact, and Forecast(2022 - 2027)

The Japan foodservice market was valued at USD 142.84 billion in 2020, and it is projected to witness a CAGR of 0.84% during the forecast period, 2021 - 2026.

Restaurant chains in Japan are taking earnings guidance off the menu after shutdowns and limited hours caused by the coronavirus pandemic have made near-future projections hard to project, with sales in March 2020 down to almost 40% for some companies. The foodservice operators, which rely on lunch and dinner demand from business workers, are also suffering as more companies have employees working from home at the government’s request.

According to a report released by TableCheck Inc., the percentage of reservations (dining reservations) being canceled increased about 3.6 times before the pandemic for groups of 10 or more. A French restaurant and bar named Scene near Hachioji Station on the Keio Line, earlier in June 2020, launched takeout and delivery services. Due to reduced traffic and numerous cancellations, the restaurant suffered about a 70% year-on-year sales drop in June 2020.

The Japan foodservice market is primarily driven by the increasing frequency of dining out amid time-pressed schedules and the growing influence of cross-culture dietary patterns due to the strong presence of foodservice providers offering Japanese, Korean, ethnic, and western cuisines.

Japanese consumers, in general, tend to be highly demanding, putting great emphasis on quality and branding and are willing to spend more resources on value-added products. The latest trend in Japanese foodservice includes listing calories on the restaurants’ menu. Connected to this overall trend, strong attention has been paid to the sugar content, and products with lower sugar content are considered healthier, which is expected to drive the market forward.

Key Market TrendsInclination Toward American and Western Cuisines

The variety of restaurants and menu items available in the Japanese foodservice continues to expand in the country, as Japanese consumers are interested in trying a new and vast variety of cuisines, which are available at their convenience in Japan. Food from Europe, Asia, Australia, and the Americas are becoming increasingly popular, partly due to a large number of Japanese traveling abroad every year (17.9 million in 2017, as per the USDA report). Moreover, consumers have access to media and the internet, exposing them to various international products, activities, and lifestyles. Apart from this, Japan is also experiencing rapid growth in the tourism industry, which, in turn, is profitable for international foodservice brands in the country. For instance, 31.2 million foreign tourists came to Japan in 2018.

Full-service Restaurant Holds the Largest Market Share in Japan

The consumers in the country and the increasing number of tourists that visit every year are actively seeking traditional authentic Japanese cuisines, primarily sushi, along with a great dining experience, which is one of the major factors driving the growth of full-service restaurants in the country. Some of the popular full-service restaurants include Sushi Sho, Shiseido Parlour, Ponchi-ken, Seirinkan, Les Chanterelles, Ise Sueyoshi, Tenoshimam, Nanzenji Hyotei, and Natives Restaurant & Patio.

French restaurants have always been popular in Japan, and more recently, Italian and Spanish restaurants have also grown in popularity. Mexican restaurants, which are still fewer in number, are slowly growing in popularity, and they provide opportunities for US exporters of items, such as tortillas, frozen guacamole, and related Tex-Mex ingredients.

However, the rising labor and ingredient costs and unfavorable demographic trends have presented considerable challenges to full-service restaurants, significantly constraining their growth.

Competitive Landscape

The Japan foodservice market is highly competitive, with a major market share held by prominent players, such as McDonald’s Corporation, Yum! Brands Inc., Zensho Holdings Co. Ltd, Skylark Group, MOS Food Services Inc., and Yoshinoya Holdings Co. Ltd. Zensho Holdings Co. Ltd, with the largest market share of 2.76% in 2020, emerged as the market leader, and Skylark Group holds the second-largest share with 1.66%.

The Japan foodservice market is highly competitive and is mostly dominated by local players. The key players are embarking on mergers and acquisitions as one of their key strategies to achieve consolidation and optimize their offerings. Moreover, these players merge with local players to gain dominance in the local markets. For instance, in January 2018, Yoshinoya Holdings Co. Ltd opened its Tokyu Chuorinkan Station Store that falls in line with its expansion strategy.

Additional Benefits:

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

Companies Mentioned

McDonald's Corporation
Yum! Brands Inc.
Starbucks Corporation
Zensho Holdings Co. Ltd
Skylark Group
Dunkin' Brands
MOS Food Services Inc.
Yoshinoya Co. Ltd
Matsuya Food Holdings Co. Ltd
Ichibanya Co. Ltd

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