Market Overview

The health food market (based on manufacturer shipment value) in Japan is estimated at 905,020 million yen in FY2023 and is forecast to be 894,510 million yen in FY2024, down 1.2% year on year.
in terms of sales channels, sales through drugstores and convenience stores increased tremendously owing to increased travel opportunities following the downgrading of COVID-19 to Class 5 under the Infectious Diseases Control Law, while mail order sales, which had driven the market, contracted for the second consecutive year due to fiercer competition, and the overseas market declined significantly.

The health hazards of red yeast rice products that were discovered in March 2024 have become a stiff headwind that is likely to cause the market to decline in FY2024.
As the red yeast rice products in question were functional foods in the form of tablets and capsules for cholesterol management and other lifestyle diseases, some consumers had negative impressions of or stopped taking tablet and capsule types of health foods or foods with function claims for lifestyle diseases. On the other hand, powdered foods with function claims have little impact, showing a distinct difference in the impact of the issue by form.  
Nevertheless, health foods (dietary supplements) for lifestyle diseases tend to be purchased continuously through mail order subscriptions. While some consumers stopped using subscriptions, there are many who did not seem to mind the red yeast rice issue and continued to buy health foods because of the trust they placed in the manufacturers. Thus, there are many health food manufacturers with little impact from the red yeast rice issue.
With limited impact of the issue, the health food market in FY2024 is expected to be higher than in FY2019 before Covid.

Noteworthy Topics

Trend of Foods with Function Claims by Food Type

The domestic market for foods with function claims, based on the manufacturer shipment value, maintained a growth trend in FY2023 at 681,310 million yen, and is estimated to grow by 6.4% year on year at 725,120 million yen in FY2024.

In terms of food types, the proactive application for approval as foods with function claims was observed in dietary supplements, general foods, and perishable foods through FY2023, which contributed to remarkable market growth.
Although the growth rate is slowing down due to the red yeast rice issue, the market for foods with function claims is expected to continue to grow by 6.4% year on year in FY2024.
The dietary supplement market, which includes tablets and capsules affected by the red yeast rice issue, is projected to grow 7.6% year on year, showing a limited impact of the issue, as many supplement customers tend to continue taking them for lifestyle diseases, although some customers have discontinued subscriptions.
While consumers are said to have worsened their impressions towards foods with function claims, some major manufacturers of foods with function claims in the form of general foods are promoting these foods by fully emphasizing the functional claims. Although the growth rate of foods with function claims is expected to decline, this seems to be mainly due to fierce competition resulting from zealous product development through FY2023.
For foods with function claims in the form of perishable foods, many manufacturers have experienced flat or declining sales, due to production and harvest volume caused by harvest conditions, which are specific to perishable foods. Just as perishable foods have been severely affected by bad weather conditions and disasters in recent years, so have foods with function claims in the form of perishable foods.

An increasing number of applications for approval of foods with function claims until FY2023, resulting in the market expansion has now subsided in FY2024, slowing the growth rate of the market.  

Future Outlook

As the red yeast rice problem continues in FY2025, the full recovery of the health food market is likely to take more time. Thereafter, the domestic health food market will be on a gradual recovery trend, reaching 900 billion yen in FY2029.

Although the return of users who stopped consuming health foods due to the red yeast rice issue is likely to take some time, there are some health food manufacturers that have managed to retain and even increase customers through their efforts in research and development of original materials and formulation techniques, as well as quality control, which have led to fostering trust. In the future health food market, manufacturers seem to be experiencing higher brand values caused by the trust fostered toward companies, which tends to stimulate customers’ purchase intentions and lead to the maintenance and improvement of product loyalty. 

Research Outline