by Tomoyuki Iizuka, Executive Researcher

 

(The original article in Japanese was posted in March 2022)

 

While there are many saturated markets of food products in Japan, the health and functional food market is gaining attention and expected to continue to grow in the future.

As people’s interest in healthy life expectancy grows, a wide range of demand for the health and functional foods has been seen, mainly among the elderly who have problems related to aging. Also, middle-aged people are concerned about lifestyle-related diseases and physical problems that they feel in their daily life, resulting in their increasing interest in aging care. Moreover, even younger people are highly conscious of their health and beauty as an investment in their future. Therefore, many companies are trying to expand and strengthen their business in the health and beauty food sector as they regard it as a growing field, and active business and product development continue including entry into other industries.

The market size of “health foods” (supplements) in the form of tablets, capsules, powders, and small drinks (in the form of supplements) for the purpose of health maintenance and beauty enhancement¹ was 865.99 billion yen in FY2020, increased by 0.4% from the previous year. This is expected to reach 888.03 billion yen in FY2021, which will be an increase by 2.5% from the previous year. The market size continues to grow due to the increasing demand for improving health and boosting the immune system and because more people started to stay at home due to the COVID-19 pandemic. In addition, the compound annual growth rate (CAGR) from FY2016 to FY2021 is up 1.6%, positioning the health and functional food market as a growth market among the highly saturated processed food market.

The market that has been growing rapidly in recent years in terms of foods with potential health and functional benefits is Foods with Functional Claims. In this market, vigorous product development and promotion activities are seen as food products that can be labeled with health functions, amid the demand for health measures including boosting the immune system, preventing lifestyle-related diseases, coping with stress, and improving sleep quality in the current situation of the coronavirus pandemic.

Foods with Functional Claims characteristically include supplements, general foods such as soft drinks and seasonings, and fresh foods. The total market size was 304.4 billion yen in FY2020, increased by 11.8% from the previous year, and is expected to reach 327.83 billion yen in FY2021, which will be an increase by 7.6%. Although the growth rate is expected to slow somewhat in FY2021, the market continues to maintain a high growth rate.

The market for foods having potential health and functional benefits is still expected to continue to grow in the future. The challenge is that although general foods and fresh foods easily gain a chance to be consumed due to the labeling of functions of Foods with Functional Claims, it is difficult for consumers to continue to consume the same foods every day in terms of preference. As for supplements, while it is easy for consumers to continue to consume them for a long term, it is also necessary to consider how to attract new consumers.

Yano Research Institute conducts a consumer survey on the situation of consumption of health foods every year. Regarding supplements, while the consumption rate of health-conscious women in their 50s and older increased since the pandemic started, there has been no significant change in the consumption rates of other generations before and after the pandemic. Moreover, the long-term consumption rate remained generally unchanged at approximately 30%. Although the increase in the elderly population is expected to help the growth of the supplement market, a certain number of people are cautious about taking supplements either because they do not find value in supplements or because they do not feel comfortable taking them. I believe that a way to break through this situation is that the industry as a whole takes actions to improve the credibility of supplements and give a feeling of safety about supplements to consumers in the long term, thereby gaining more new consumers.

 

1: The press release “Health Food Market in Japan: Key Research Findings 2022”: https://www.yano.co.jp/press-release/show/press_id/2938

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