The Japanese cold chain logistics market is expected to exhibit a growth rate of more than 2% during the forecast period 2020-2025. As per the current movement of ready-made meals and strengthening of PB products (private label products whose brand is owned by a supplier who gets the goods made by a contract manufacturer under his own label) promoting traditional Japanese cuisine in form of bento and side dishes.

The ageing population in the agriculture sector is maximum as compared to rest of Japan leading to a pacing reduction in the active number of farmers in the country and is one of the major reasons leading the Japanese population to shift to meat, seafood and frozen products.

With COIVD-19 in effect, the Japanese Trade Ministry reported a 7.5% Y-o-Y increase in the sale at drugstores in March 2020. Along with this, the Japan Supermarkets Association, in response to the self-imposed quarantines and need to cook at home, reflected a 7.4% Y-o-Y increase in the demand and sales of groceries at the supermarkets in March 2020.

Key Market Trends

Modern Households Leading to Demand for Frozen Foods

The Demand for chilled/frozen foods is increasing as a solution for the modern age families, such as the independent elderly citizens, increase in dual-income households and single people along with the danger of food loss, and increasing overall labour shortages in the food and beverage industry.

According to the Japan Frozen Foods Association, the domestic consumption of frozen foods in 2018 was 2,893,299 tons (up 1.3% year-on-year) while the per capita consumption was 22.9 kg. Along with this, there is a worldwide explosion in Japanese food, especially agricultural products in recent years. As the population of Japan ages, the shift on healthy life expectancy is a common desire of the people aiding the overall sale of frozen products significantly increase in the supermarkets, hypermarkets and drugstores.

Growth of Pharmaceutical Sector in Japan

Japan is one of the largest pharmaceutical markets in the world, especially due to its ageing population. It is also among the major producers and importers of advanced medical facilities backed by the active government initiatives for the promotion of generic drugs.

The country’s native biologics sector has now gained the second position after the USA. Coupled with the government’s focus on supporting lower-cost copycat products, this entails a huge opportunity for bio-similars. While innovative drugmakers have long benefited from generous exclusivity periods in Japan, the country is catching up with other mature markets in terms of generics penetration, with a rapidly increasing share of the market held by copycats. The confidence of the system is reflected by the fact that domestic drugmakers are increasingly going global with their products, with the share of overseas sales of the top Japanese companies rising steadily increasing the demand for cold chain storage and transportation facilities.

Competitive Landscape

The market is fairly fragmented with a high number of local and international players in the market including Nippon Express, Yamato and Kintetsu World Express.

The competition in the market pertains in terms of costs, storage fees and space along with the rising prices of packing and packaging materials. The service providers are still working on developing the ability to provide standardisation in the processes.

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