By Priyanka Rana
In this article, we provide an overview of what the bakery goods in Japan market looks like, key statistics, consumption trends. Who are the big Japanese brands making baked goods, and where are the prime opportunities within the sector?
Overview: Bakery Goods in Japan
There is a special historical story behind Japanese bakery. It is a market that has changed shape over the course of time to become a staple of the Japanese diet. In a country best known for consuming rice on a regular basis, it’s a wonder that the country is now home to so many different types of bread-based options. Here, we offer a brief history of how bread came to Japan, and how bread and Japanese bakery have changed over the years to become something that many enjoy today, as well as delving into consumption trends and listing some of the top artisan bakeries.
While you might think of Japan as a nation that relies heavily on rice, you’d be surprised by the utter ubiquity of bakeries across the country. Bread has taken a long time to rise here, but the results are remarkably appetizing!
Pan, or bread, in Japan is not at all part of the cultural heritage, yet these days there are many Japanese bakery outlets. Bread was first brought to the archipelago by Portuguese traders and missionaries in the mid-16th century, and was quickly embraced by the Japanese people.
During the Meiji era (1868-1912), Japan became open to western influences, and as a result, Japan’s bakery shops started baking bread for the foreigners who chose to settle in Japan. From that point onward, bread became more commonplace along with Japan’s rapid industrialisation during this same period. It took quite some time for it to become popular among locals. Then, in 1874, a bakery called Kimuraya invented anpan, a round, sweet variant of bread bun stuffed with red bean paste, known as anko.
As anko was a common ingredient used in Japanese-style sweets, including it made the transition simpler and gave Kimura’s bakery, Kimuraya Sohonten, notoriety. It still exists today. Anpan was such a success that it was even presented to the Emperor himself, and a boom in bread-based confections followed soon after. This cultural mix of wagashi (traditional Japanese sweets) and western style bread was a resounding success, particularly in Tokyo.
Bread was introduced as a staple for the Japanese Navy in 1890 to reverse a widespread deficiency in vitamin B1 intake. However, it didn’t make a strong impression among the general Japanese public until after WW2. At this time, bread became a normal part of the school lunch (kyushoku) system that was established to relieve the post-war hunger that existed due to a lack of available food, making use of ingredients like wheat and powdered milk, which were provided by the U.S. occupying authority.
In 2011, it was revealed that Japanese households spent more on bread than they did on rice for the first time in history, which came as something of a surprise. However, Japanese bakery products are rather costly in comparison to rice, and at the time the nation was still producing only 1.2 million tons of bread compared to 8 million tons of rice in 2015—so rice isn’t necessarily going to be made redundant anytime soon.
Increasingly, bread is considered a part of Japan’s national diet, enjoying particular popularity in the Kansai area. At least one bread shop, or panya-san, can be found at any major train station across the country, they’re even tucked down back alleys and on corners in more rural towns. Anpan and shokupan are still performing well today.
Consumer Trends relating to Bakery Goods in Japan
Today there are more than 10,000 Japanese bakery shops. However, the Japanese produce and eat bread in a different way to us in the West. Not everyone eats bread every day, because their staple carbohydrate is, of course, rice. There’s also the problem of keeping bread fresh, which is difficult because of the humid climate.
There are some families that eat bread at breakfast time, particularly shokupan – a very popular type of bread in Japan: thickly sliced white bread made with milk, which makes it very soft and slightly sweet. It’s a delicious treat that will almost make you forget the bread you’re used to finding at supermarkets back home. This kind of Western-influenced Japanese food is addictive, too!
Revenue in Japan’s baked goods market amounted to $35,106 million USD in 2020, and has seen a year-on-year increase of 8.9%. In relation to Japan’s overall population figures, per capita revenues of $277.57 USD are being generated in 2020, while the average per capita consumption level stands at 68.3 kg.
Japan’s bread market is expected to reach a total value of of $10.4 billion USD by the end of 2025. Comparatively, as the world’s second largest economy and global game changer, China has the potential to grow at 8.4% over the next couple of years and boost opportunity by around $45.2 billion USD. However, this doesn’t change the fact that Japan remains to be a key market for future growth of the bakery sector on a worldwide scale. As such, it should not be underestimated.
Rising levels of consumer health-consciousness and higher interest in facets of nutrition are exerting their influence on the overall demand for Japanese bakery products. Major Japanese manufacturers and convenience stores are continually expanding their range of health-orientated baked goods, introducing items such as low-carb products that use bran or soy instead of white flour as the binding ingredient. These especially target weight-conscious consumers who are keen to reduce their total carbohydrate intake. Natural Lawson is one example of a convenience store that tailors its offerings specifically to this demographic.
Despite rice having been a staple food in Japan for centuries, domestic rice consumption fell by half between the 1960s and the 2000s, following a series of changes in core Japanese eating habits. Bread began to be widely eaten in Japan around the 1970s, particularly among young people residing in urban areas like Tokyo. The spread of bread consumption can also be linked to the theory that excessive intake of rice may have negative health consequences.
As a results of this, there has been a gradual increase in Japan’s wheat imports over the past few decades. Currently, Japan relies on imports from overseas for approximately 90% of its total wheat consumption. As Japan has become susceptible to changes in international wheat prices, consumers are instead turning their attention towards producing wheat domestically.
Japanese Bakery: from Dough to Door
One of the positive impacts of the global pandemic is that many people have had to rediscover their kitchens. For many, having an enforced lockdown has also triggered a stronger interest in home-baking, especially sourdough bread.
In Tokyo, there are a growing number of artisan bakeries around the city that can fill the pain de campagne sized hole in their diets. Barely even 2 years old, Bricolage Bread & Co. is already a landmark on Roppongi Hills’ swish Keyakizaka-dori avenue, a rare beacon of wholesome nourishment in an area better known for its luxury brand-name boutiques. The coronavirus epidemic is providing a double-edged sword. Despite the reduced number of customers dropping by, the bakery goods in Japan market is working harder than ever to fulfil a strong online demand.
The Vaner Japanese bakery continues to fly the flag for Scandinavian wholewheat sourdough from its atmospheric premises in tranquil Yanaka. Rather than trying to diversify, they wisely opted to focus their efforts and limited workspace on just one kind of bread – flavorful, nourishing golden-brown sourdough loaves and rolls – complemented by their trademark cinnamon and cardamom rolls, croissants and pain au chocolat.
Lee Utsumi’s bakery in the coastal town of Oiso (Kanagawa Prefecture) is the picture-book definition of an artisan operation, albeit in a very traditional Japanese bakery setting. They produce up to 20 kinds of bread and pastries each day, ranging from rustic country loaves to fragrant focaccia and even the occasional anpan (red bean bun). Utsumi sells most of their output locally, but once a week they take online orders for mixed packages of their best baked goods for delivery straight to their doorsteps.
Le Sucre-Coeur from its humble start as a small but ambitious Japanese bakery shop in Kishibe on the outskirts of Osaka, has become the leading light for quality bread and pastries in the entire Kansai region. Across Japan, from Hokkaido down to Okinawa, artisan bakers are developing a passion for the beguiling complexity of flavour found in naturally leavened and sourdough wholewheat breads, few are Kanel Bread, Boulangerie deRien, Munakatado.
The Rise of Vegan Japanese Bakery
Plant-based options are springing up all around the city. From the vegan curries at queer-friendly cafe Ryusen112 in Asakusa to thick vegan burgers from Great Lakes Tokyo in Takadanobaba, small vegan-friendly businesses are appearing so quickly it’s hard to keep up. Even traditionally meat-heavy options like steak houses and pubs are becoming friendlier to the veggie population, with The Burn in Aoyama, along with pubs such The Hobgoblin in Shibuya, churning out impressive vegan options.
However the real proof of veganism’s growing popularity is in the pudding. Or rather, the bread. This spring, a new generation of vegan bakeries and cafes have popped up around Tokyo. It’s welcome news for vegans, or even those with milk or egg allergies, who have often been prevented from enjoying many Japanese-style loaves.
Competitive Landscape in the Bakery Goods in Japan Market
Domestic companies are continuing to dominate Japan’s bakery market with four of the five largest brands all homegrown- but their low respective market share highlights the fragmented state of the sector. Meiji and Yamazaki have proved particularly adept at meeting consumers’ health needs, with the former launching more health-related packaged foods and the latter meeting rising demand for premium fresh bread.
Meiji has recently released a new range of dextrin-based yogurts and Sonton spreads, which claim to lower blood pressure. Town’s small bakeries out to serve for health-conscious people in Japan Small home-made bakeries in Japan are trying to serve products with safer ingredients following an increase in health-conscious consumers. Many of them use domestically produced wheat flour amid the “locally produce, locally consume” campaign.
Yamazaki retained the lead in the bakery market in Japan in 2019, with the company’s strength supported by its long-established presence in the Japan bakery market and an extensive distribution network that includes its own convenience stores. Moreover, in 2019, the company maintained a trend of value share growth that persisted throughout the review period, as it continued to align with key evolving trends, particularly the rising demand for health-oriented products. Manufacturers increasingly responded to demand for healthier products at the end of the review period.
Happa Nekko (leaves and roots) Bakery, facing a small but rather busy highway in Chikushino City, Fukuoka Prefecture, uses wheat flour produced in Kyushu, southwestern Japan, and Hokkaido, northernmost Japan. Its most favoured product is Nekko Bread, a small baguette, but the product usually sells out quickly. Happa Nekko, or leaves and roots, is named as such because it hopes to adapt itself to the local community. “Leaves” denote children who will become future leaders, and “roots” mean adults who support today’s society. A wooden terrace set up as an eat-in area allows customers to enjoy their time while chatting together. The bakery also provides a catering service for town meetings and other events in the community.
Fuji Baking Group, the third largest baked goods manufacturer in the bakery goods in Japan market, introduced a new line through its mochi fuwa rolls, the first bread with Foods with Function Claims (FFC) status. Nisshin Seifun Group Inc added new products to its Goku-Mochi hot cake mix line containing vegetable powders and bran, while Morinaga & Co Ltd launched its Momi Hot Cake Mix in a squeezable bag, as both players sought to tap into the popularity of hot cake mix as a result of the product’s exposure on Japan’s bakery shows on TV.
Alternatively, get in touch to find out more about the bakery goods in Japan market.