Sector Trends Analysis – Plant-based protein food and drink trends in Japan

Global market overview and trends in the Asia Pacific

Globally, new plant-based, vegan and vegetarian product developments or launches have been growing not only in the food and beverage sector with 66.7% of claims in 2022 and a growth of 3.1% (2015 to 2021), while such plant-based claims are also becoming popular in the consumer health (50%), and the beauty and personal care segments (74.6%) by a growth of 8.3%. Plant-based eating and alternative proteins has been steadily rising (accelerated by the COVID-19 pandemic) amongst most countries.^{Footnote 1}

Health benefits are the main reason for consuming plant-based diets and are mostly found in the plant-based meat substitutes and dairy milk alternatives food categories. Flexitarianism is a major driver for growth in the meatless category with consumers trying to either limit their meat intake (23%) or follow a plant-based diet (15%); while other motivations to a lesser extent over health reasoning includes climate change, sustainability, environmental, and animal rights/welfare concerns.^{Footnote 2} Consumers in the APAC region, find that positive nutritional quality claims such as 'added/high protein' content is the most important feature when purchasing plant-based drinks - as cited by nearly half of responders (48%) at a sample size of 2,936 users.^{Footnote 3}

Plant-based innovation is now reaching all food segments like ingredient replacements in categories such as fish and seafood, cheese, sugar and chocolate confectionery, sauces, dressings and condiments, prepared baby food, and ready meals etc. Although, plant-based alternatives are deemed to be healthier compared to their dairy/meat counterparts, the segment must continue to scientifically prove and to protect its "health halo" (not overestimate the healthfulness of their claims) by keeping labels transparent and easy to understand its ingredients through simple, clean benefit claims.^{Footnote 2}

As the segment finds its place in the retail market, claims often used to differentiate its products and pull in more consumers include lab cultivated (pushed by regulatory bodies), animal free (preferred naming nomenclature), and more recently trying to battle the right to advertise as "natural" to compete with consumer concerns possibly found in real meat products such as toxins (mercury) and microplastics, antibiotics, added hormones, along with sustainability (overfishing). This natural claim is mostly used in plant-based beverages to market those products with natural ingredients and focus on top consumer trend claims such as those that have limited or no added sugar (sweetened instead with natural Stevia, Monkfruit, Allulose), free from preservatives, all natural, no artificial sweeteners, good for heart health, no added salt/fat/transfat or hydrogenated oils etc.^{Footnote 2}

According to a health and nutrition survey (n=6,083) in 2022, Euromonitor states that the challenge that the plant-based segment faces is that 30% of global consumers report that not enjoying the taste is a reason for not consuming plant-based dairy alternatives. In the past, soy beverages more for consumers with lactose intolerance did not taste good, however, there are new better tasting options like oat plant-based milks, boosting the segment further and improvements to the quality (possibly health) and natural taste are being addressed through precision fermentation for dairy-free and cell-cultivated meat and seafood products.^{Footnote 2} Precision-fermented proteins are being developed at a record pace but manufacturers must deliver tangible consumer-facing benefits to match those offered by plant-based alternatives.

To further drive the plant-based, vegan or vegetarian segment, next steps are working towards having more big foodservice companies to take-on these products and help propel the trend towards bringing plant-based products to a more general consumer base. Yum! Brands^{Footnote 4} (KFC: Beyond Fried Chicken, Pizza Hut, Taco Bell etc.) were the first International brand to bring meat alternatives to consumers on a wide scale. Burger King pledges to reduce its meat consumption by 50% in the UK by 2030.^{Footnote 5} While, full-service restaurants (FSRs) are trying to introduce new plant-based options that help vary their menu items, follow healthy eating trends and push wider green initiatives.^{Footnote 2}

Trade overview

In 2022, Japan imported a total of US$1.3 billion (189.5 thousand tonnes) of plant-based and animal protein ingredients from the world (consisting of protein concentrates/substances, peptones and their derivatives, milk and egg or other albumins/albuminates, pea/bean/lentil or vegetable powder, whey proteins and wheat gluten, along with food preparations - that could include plant-based burgers, patties, sausages). This import value has been increasing at a CAGR of 15.1%, especially for pea/bean/lentil or other vegetable powder (56.2%), milk albumin, >80% proteins (28.7%) and caseinates and other casein derivatives (19.2%) between 2018 and 2022. During this time period, egg albumin (excluding dried) registered a significant decline of 65.9%, followed by vegetable protein concentrates containing ≥80% protein, in containers (−11.3%), and peptones and its derivatives; hide powder (−2.2%).

The top global suppliers of plant-based and protein ingredients to Japan were the United States (22.8%), New Zealand (21.8%), and Germany (11.9%) in 2022. While, Japan imported a total of US$11.6 million (2.8 thousand tonnes) from Canada over the year.

Canada's performance

Canada was Japan's 15th largest supplier for plant-based and protein ingredients at a value of Can$15.1 million (2.8 thousand tonnes) in 2022. Japan's imports from Canada have increased by a CAGR value of 5.1% (2018 to 2022). Top plant-based or protein ingredients that Canada supplied to Japan were wheat gluten, whether or not dried (HS:110900) at Can$11.3 million, followed by whey and modified whey proteins (HS:040410) at Can$1.7 million; peptones and other protein substances and their derivatives, nowhere else specified (n.e.s.) (HS:350400) at Can$1.3 million; and vegetable protein, not containing added sugar, nowhere else specified (HS:210610222) at Can$605.9 million in 2022.

Protein concentrates and textured protein substances other than vegetable preparations and protein concentrates (≥80%) (HS:210610211) spiked in 2022, registering a high growth by a CAGR of 142.6% since 2018; along with increases in whey and modified whey proteins (+122.2%), and other food preparations of hydrolyzed vegetable protein, nowhere else specified (+54.5%). Meanwhile, decreases occurred in dried egg albumin in sheets, scales, flakes or powder (−24.9%) and for pea/bean/lentil or other vegetable powder (−18.1%) between 2018 and 2022.

Market sizes

In 2022, the market size of animal derived protein ingredients in Japan registered a volume of 64.9 thousand tonnes (61.2%), equivalent to an historical volume sales CAGR of −0.7% (2017-2022) and a forecast CAGR of 0.2% (2022-2027) set to reach 65.7 thousand tonnes by 2027. In 2022, the majority of the animal derived protein market consisted of 48.5% of caseinates (31.5 thousand tonnes), followed by 17.9% of whey protein concentrate (11.6 thousand tonnes), 17.1% of gelatin (11.1 thousand tonnes), 8.2% of milk protein concentrates (5.3 thousand tonnes), and 5.1% of egg whites (3.3 thousand tonnes); smaller market sizes being milk protein isolates, caseins, whey protein isolate, hydrolysed keratins, and albumin. Historically, volume sales of all animal derived protein ingredients in Japan registered either low growth or slight declines with CAGRs falling between −4.4% and 1.7%.

In 2022, demand in Japan for animal derived protein ingredients in terms of volume (containing a total protein breakdown of 65.4%) was highest within packaged food categories such as dairy products at a protein breakdown of 29.9% (19.4 thousand tonnes), especially for protein found in yogurt and sour milk at 24.9% within its category. Snacks were the second highest category in demand for animal derived protein ingredients at 19% (12.3 thousand tonnes), mostly within sugar confectionery products at 15% within the snack category in 2022. Cooking ingredients and meals were the next in demand over the year at 13.1% (8.5 thousand tonnes) mostly within the ready meals sub-category at 11.7%, followed by staple foods at a total of 3.4% (2.2 thousand tonnes) mostly for baked cake goods accounting for 2.1% of animal derived protein ingredients.

In 2022, the market size of plant-based protein ingredients (non-animal derived) in Japan registered a volume of 41.1 thousand tonnes (38.8%), equivalent to an historical volume sales CAGR of −0.3% (2017-2022) and a forecast CAGR of 0.9% (2022-2027) set to reach 42.9 thousand tonnes by 2027. In 2022, 63.3% of non-animal derived protein ingredients consisted of soy protein concentrate (26.1 thousand tonnes), followed by 27.9% of soy protein isolate (11.5 thousand tonnes), 6.9% of gluten (2.8 thousand tonnes), 1.7% of vegetable proteins (695.7 tonnes), and 0.2% pea protein (64.8 tonnes). Historically, volume sales of pea protein has been increasing with the largest compound growth of 12% with soy protein isolate (−1.9%) and vegetable proteins (−0.2%) declining over the same period, while gluten (0.3%) and soy protein concentrate (0.3%) registered low growth. Noting that protein hydrolysates (6.0 thousand tonnes) and other proteins (3.8 thousand tonnes) were not included in the protein ingredients total since these categories may not necessarily be all inclusively non-animal derived. However, typically these proteins do come from plant, pulse or cereal sources.

In 2022, demand in Japan for plant-based protein ingredients in terms of volume (containing a total protein breakdown of 84.3%) was highest within packaged food categories such as staple food products at a protein breakdown of 51.1% (21.0 thousand tonnes), especially for added protein found in processed poultry/red meat at 37.3%, instant noodle cups at 13.2%, and tofu and derivatives (1.9%) within its category. Cooking ingredients and meals were the second highest category in demand for non-animal derived protein ingredients at 18.8% (7.8 thousand tonnes), specifically protein found in ready meals (6.5%). Pet dog and cat food were next in demand at 15.7% (6.4 thousand tonnes). The snacks category followed at 11.6% (4.8 thousand tonnes) for protein energy bars. Lastly, was the dairy products and alternatives category at 2.7% (1.1 thousand tonnes) mostly for protein found in plant-based soy milk products (2.3%) in 2022.

Retail sales

Meat and seafood substitutes was the best performing category in Japan in 2022, with retail value sales rising by 31% in current terms to JPY4.2 billion. Despite this growth, processed meat and seafood is set to see a retail volume decline, due to unit price increases of imported meat (especially for beef) and rising energy and shipping costs due to the steep rise in the price of crude oil. As a result, consumption of processed meat and seafood have reduced with consumers shifting more to affordable options, such as fresh food or other staple food products in 2022. Nevertheless, meat and seafood alternatives have continued to see significant growth driven by the ongoing pre-pandemic healthy eating trend. Japanese consumers believe that plant-based products are generally considered healthier, whereby more time spent in the home during COVID-19 has led to more consumers trying out meat and seafood substitutes for the first time, supporting growth in this segment.^{Footnote 6}

High in protein food products

Products with a high source of protein ingredients (animal or non-animal derived) registered total sales of US$97.5 million in 2022. Generally, products that contain the highest source of protein ingredients included staple foods such as processed meat, seafood and alternatives to meat (including tofu and derivatives) at a sales value of US$184.3 million, instant noodles (US$96.9 million), and baked bread goods (US$95.6 million). Other high in protein products included dairy products and plant-based milk drinks (including cheese, dairy desserts) at a value of US$80.9 million, savoury/salty/trail mixes/meat/seafood snacks (US$60.8 million), and sweet biscuits, snack bars and fruit snacks (US$31.9 million) in 2022. Over the historical period (2019 to 2022), the highest sales growth category for high in protein food products was for instant noodles at a CAGR of 64.9%, followed by baked bread goods (55.1%). During this time, the highest drops in sales value were found within the baby milk formula category at a CAGR of −27%, along with dairy products and plant-based milk drinks (−14.2%).

Plant-based food products

Plant-based food products registered total sales of US$948.2 million in 2022. Generally, plant-based dairy products registered the highest sales value in Japan at a total of US$825.4 million - consisting of plant-based milk (95.2%) and dairy free yogurt (4.8%). Plant-based cooking ingredients and meals brought sales of US$74.3 million - mostly for its ready meals (48.3%) and sauces, dips and condiments (48%) food categories in 2022. Plant-based snacks registered the third largest sales at a value of US$35.9 million - mostly for its savoury, salty, nut and seeds, meat or seafood snacks (61%); followed by plant-based dairy products and alternatives (US$11.2 million) - mostly for its drinking milk products (99.1%); and lastly plant-based stable foods (US$1.4 million) for its breakfast cereals (85.7%) and pasta (14.3%) in 2022.

Over the historical period (2019 to 2022), the highest sales growths for plant-based food products were within the plant-based snack cateogry at a CAGR of 53.6%, followed by plant-based cooking ingredients and meals (11.8%), and plant-based dairy products and alternatives (11.4%). Plant-based staple foods such as breakfast cereals and pasta are expected to be the highest growing category by a CAGR of 30% between 2022 to 2027.

Competitive landscape

In 2022, packaged food top companies (brands) for animal/non-animal derived high in protein ingredients products in Japan included the Sanko Seika Co. Ltd. (Sanko) at a market share of 8.9% (US$8.7 million) in the snacks category; Hida Alimentacion SA (Hida) at 30.1% (US$24.6 million) in the dairy products and alternatives category; Reborne Pte Ltd. (Xndo) at 20.8% (US$4.7 million) in the cooking ingredients and meals category; and Nissin Foods Holdings Co. Ltd. (Nissin, Soba) at 19.7% (US$76.3 million) in the staple foods category.

In 2022, packaged food top companies (brands) for plant-based products in Japan included Select AS (Signature) at a market share of 17.7% (US$6.4 million) in the snacks category; Marusanai Company Ltd. (Marusan) at 21.4% (US$2.4 million) in the dairy products and alternatives category; Sokensha Company Ltd. (Sokensha) at 28.4% (US$21.2 million) in the cooking ingredients and meals category; and Nature's Path Foods Inc. (Nature's Path) at 42.5% (US$0.6 million) in the staple foods category.

New product launches

Mintel indicated that there were 1,203 new high in protein or plant-based food (787), drink (303), pet food (102), and health (11) products launched in Japan's grocery retailer outlets (including new variety/range extension, packaging, formulation or relaunched) between the period of January 2018 and August 4th, 2023: which consisted of 24.4% claims suitable for plant-based (294) and 79.3% of high/added protein (954) products.

Note: each product can contain more than one of these claims

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	2018	2019	2020	2021	2022	2023 (up to August 4)	Total
High/added protein	92	134	210	196	202	120	954
Plant-based	0	15	44	63	102	70	294

Source: Mintel, 2023

Meat substitute launches in Asia with meat and poultry flavours are surging ahead in the retail market. Asian consumers are interested in reducing their meat intake mostly as a dietary staple, and many want to enjoy the same meat-like taste and texture of meat. Asian consumers are also keen on having a diverse range of meat flavour-inspired options (including fauna - dark fruit, light tannins wine flavours), along with infused flavours like pairing umami vegetables and seaweed with plant-based meat substitutes.^{Footnote 7}

The APAC region seek health dietary attributes, which are linked to longevity and disease prevention. Meat substitute brands are highlighting high protein, low/no/reduced cholesterol content, added fibre and other better-for-you or nutritional beneficial claims; while reducing artificial ingredients. Consumers in India are increasingly conscious of the nutritional value of what they eat, whereby 38% (sample size= 3,000) believe that eating a plant-based diet can help to reduce the risk of diseases.^{Footnote 7}

Leading parent companies launching plant-based or high/added protein food and drink products (1,257) in Japan between Q3-2022 and Q3-2023 were Meiji (47), Morinaga and Co. (26), Kagome (17), NatureLab (14), Ezaki Glico (11), and Kameda Seika (10). New brands appearing for the first time launched in the Japanese market within the last 6 months, included Cycle.me (milk chocolate crunch with protein), Melodian Mini (almond milk creamer), Morinaga Partheno (Greek yogurt with Muscat sauce) and Innocent (chocolate banana flavoured cricket soy protein).

Top categories for plant-based or high/added protein claims in Japan were processed fish, meat and egg products (+900%), bakery (+600%), ready-to-drink products (+200%), meals and meal centres (+175%), dairy (+150%), breakfast cereals (+50%), desserts and ice cream (+50%), and nutritional drinks and other beverages (31%) between Q3-2022 and Q3-2023. While declining categories included sauces and seasonings (−56%) and snacks (−50%). New baby food ingredients appearing within the last 12 months included chloride, ferrous citrate, molasses, vanilla sugar, celery concentrate, beetroot juice concentrate, yellow curry paste, and toffee nut flavour. The fastest growing flavours in these products were curry (+400%), cocoa/cacao (+300%), and chocolate, milk, cheese, tea (each at +200%) between Q3-2021 and Q3-2023.

Top claims and claim combinations used most often in the last three months for high/added and/or plant-based protein food and beverage (not including pet food) product launches included high/added protein, ethical - environmentally friendly package and sustainable habitat/resources, vitamin/mineral fortified, plant based, and low/no/reduced fat. Top growing plant-based and high in protein claims were free from added/artificial flavourings (+400%), low/no/reduced calories (+267%), low/no/reduced allergen (+200%), on-the-go (+200%), and dairy free (+150%) between Q2-2022 and Q2-2023. Meanwhile during the same period, declining claims by −100% were maternal, organic, and caffeine free, followed by free from added/artificial preservatives (−75%) or no additives/preservatives (−67%).

Description of above image

• High/added protein: 852
• Ethical - environmentally friendly package: 367
• Vitamin/mineral fortified: 349
• Ethical - sustainable (habitat/resources): 301
• Plant based: 294
• Low/no/reduced fat: 275
• Ease of use: 192
• Convenient packaging: 144
• Low/no/reduced allergen: 141
• Ethical - recycling: 140
• No additives/preservatives: 127

Source: Mintel, 2023

Total item count (excluding pet food): 1,101

Examples of new products

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For additional information on the Hi Japan (Functional Food and Health Ingredients) - 2023 Trade show held in Tokyo from October 4-6, please contact:

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Resources

• Euromonitor International | January 2023. Presentation: The Evolution of Plant Base – Eating and Beyond
• Euromonitor International | November 2022. Country Report: Processed meat, seafood and alternatives to meat in Japan
• Euromonitor | March 2022. Plant-Based Eating and Alternative Proteins in Middle East and Africa
• Euromonitor, 2023. Presentation: The Evolution of Plant Base – Eating and Beyond
• Mintel Global New Products Database, 2023
• Mintel  | October 2022. A year of innovation in meat substitutes and eggs: Asia
• Walji, Amrin. Mintel | A year of innovation in plant-based drinks, yogurt & ice cream, 2023

Sector Trends Analysis – Plant-based protein food and drink trends in Japan
Global Analysis Report

Prepared by: Erin-Ann Chauvin, Senior Market Analyst

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