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Big in Japan: Future Proofing Irish Export Growth

15th September 2020

 2020 was supposed to be very big year for Japan. If 2020 had gone according to plan by July of this year the eyes of the world would be on Tokyo as the Olympic Games commenced in earnest.

 Alas best laid plans have been put on hold, the Covid-19 pandemic has put pay the games for at least another year just as it is has disrupted so many aspects of all of our lives.

 However, from the perspective of Irish food and drink exports, growth in trade with Japan has continued apace in 2020. Exports to Japan itself have been growing steadily since 2008; from €25million then to over €115 million in 2019.

For the first six months of this year, trade with Japan is up 7% to €67m, despite the challenges faced by Covid 19. Nearly all of that growth has been in beef and dairy – with growth in the dairy being led by cheese and casein. 

 Japan remains a key growth market for Bord Bia in the Asia region and this continued growth is the reason why we have invested in consumer understanding in Japan to produce our latest Future Proofing Toolkit.

 As with our other toolkits in the series, the Japan Future Proofing Toolkit, focuses on understanding consumer behaviours; those that are changing and those that are becoming ‘sticky’. And in a market that appears to have a greater ‘grip’ on the pandemic than other countries, our research makes for fascinating reading.

 Japan does not have the lowest death rate for Covid-19 in the region, South Korea, Taiwan, Hong Kong and Vietnam can all boast lower mortality. But in the early part of 2020, Japan saw fewer deaths than average – for the year as a whole, it is possible that overall deaths will be down on 2019*.

This lower mortality rate is particularly striking as Japan has all of the conditions that we are told drives infection through populations; for example the frenetic subway system in Tokyo that caters for a population of 37 million people seems the ideal environment for spread of the virus.

 Some of the clues to Japan’s current ability to cope with Covid-19 could lie in the attitudes of Japanese consumers that we have captured in our Indicators research.

 Our nationally representative survey of Japanese adults reveals a population that is very nervous about the virus, the low mortality rate story doesn’t appear to be one that has captured the public imagination.

 Some 78% of Japanese adults feel Japan is badly affected by Covid-10 and just 8% feel Japan would be well prepared for a second wave right now. Ironically, it is perhaps the natural conservatism and respect of rules that both results in this fearful population and simultaneously drives the kinds of behaviours that are allowing cities like Tokyo (population 37 million) to keep the virus under-control.

According to our research 93% of Japanese adults are wearing masks for protection and adherence to government guidelines (the three C’s) is incredibly high with, for example, 82% following the first ‘C’ – avoid crowded places.

 The knock-on effect on adherence to these guidelines is that many Japanese consumers feel there are really missing out on aspects of life that they love. For example, half of Japanese adults now miss eating out in fast-food restaurants as a result of Covid-19 and some 43% miss eating out in formal restaurants.

 A further change in consumer behaviour that we have identified is around the whole area of grocery shopping. Some 42% of Japanese consumers are minimising their trips to the grocery store now and 22% are shopping online for groceries more often as a result of Covid-19 – higher than many of the other markets that we have measured.

 The foods that Japanese are buying more often has also shifted with 22% buying more foods that boost immunity and 13% buying more seafood, a significant shift in a market that already were very high consumers of seafood in the global context.

A lot of these behavioural shifts are grounded in the reality of Japanese consumers cooking more at home; almost 1 in 5 Japanese adults are cooking more from scratch as a result of Covid-19.

 So the story of consumer behaviour in Japan is a dramatic one. A shift away from Food Service and into At-Home consumption in numbers that look like becoming relatively permanent; at least until we can find a vaccine for Covid-19.

 From an Irish exporters’ perspective there are big implications for the changes happening in the market. Japanese consumers are much less familiar with Irish origin food and drinks relative to our competitors such as New Zealand and Australia; just 1 in 3 adults have any familiarity with Irish origin foods.

 However, Ireland does have a significant reputational advantage over GB in the market, particularly around our reputation with respect to the environment and nutritional value of our food. Some 37% of Japanese consumers think Irish food comes from a pure and natural environment compared to just 12% of adults who think the same about food from GB.

It’s clear from our research in the market that an opportunity exists for Ireland to leverage its environmentally clean image in the Japanese market when competing for attention with our nearest neighbours. And in a world where we will be competing with Britain directly, this is only good news for Irish food in this increasingly attractive export market.

 Understanding Japanese consumers is complex and understanding the cultural context for how they have coped with Covid-19 is the first step in successfully designing your export strategy to this market. Bord Bia’s Future Proofing Toolkit (Japan Edition) is the first step on your journey to building your business in Japan.

 We encourage anyone thinking of exporting to Japan to visit the Future Proofing hub on the Bord Bia website and download the toolkit. Seek first to understand this fascinating consumer culture, so far removed from our current lives, but with so much in common when it comes to coping with Covid…