Market Overview

The processed food market was projected to grow to 31,141,600 million yen in FY2023, 102.7% of the preceding fiscal year (based on the shipment value of manufacturers). Price increases for many processed food items due to rising costs have contributed to this growth. However, while the market size has expanded in terms of value, shipment volumes have declined for many products.

During the COVID-19 pandemic, demand for processed foods in restaurants and souvenir confectioneries dropped as activity restrictions limited movement. Additionally, the shift to telework led to a decrease in processed food sales at convenience stores. However, as restrictions eased in FY2023, sales of processed foods began to recover.

Moreover, while the initial surge in demand for home dining was driven by concerns about infection during the COVID crisis, this trend has continued into 2023 and beyond. Rising product prices and increased health consciousness have further fueled the demand for eating at home. There is also strong demand for stockpiling processed foods as emergency supplies, particularly in response to recent natural disasters.

Noteworthy Topics

Market Trends by Category

The distribution chart illustrates market trends by category over the past six years, covering 15 processed foods categories included in this survey. It shows the relationship between the compound annual growth rate (CAGR) from FY2018 to FY2023 (projected) and the projected market size for each category in FY2023. As the chart indicates, the market is expanding across many categories, with the primary driver being the impact of higher costs reflected in product prices. For individual items that experienced market growth due to the COVID-19 pandemic, some have maintained a certain level of demand, and the categories containing these items continue to grow.

This was especially true for instant and retort foods, which saw strong sales as consumers became more inclined to eat at home due to the COVID-19 pandemic and rising prices. These products appeal to those who value convenience, as they require little to no preparation. Additionally, many consumers stocked up on these foods as an emergency food supply in preparation for earthquakes, torrential rains, and typhoons. Oatmeal, in particular, experienced strong sales. While its market size remains relatively small, it has been growing rapidly, driven by trends toward home dining, health consciousness, and disaster preparedness.

Future Outlook

The domestic market for processed foods is projected to reach 33.3 trillion yen (based on the shipment value of manufacturers).
While rising material costs—driven by higher raw material prices due to unstable weather patterns and the weaken yen affecting imports—are expected to persist in the coming years, the rate of price increases is not anticipated to be as sharp as it was between FY2022 and FY2023. Meanwhile, even though consumers are showing a tolerance for higher prices, especially for everyday essentials as prices increase across the board, they have become more budget-conscious and increasingly turning to private-label brands as a more affordable alternative to national brands. Due to the current conditions, the growth of the processed food market is anticipated to slow down.

Research Outline