Market Overview

In this survey, we estimated the potential cost savings by extending the shelf life of chilled foods to 1.5 times the duration set by the current guideline.

First, based on the projection of the domestic processed food market size for FY2023 at 31,141,600 million yen*1, the size of chilled food market was estimated at 2,981,100 million yen (based on the shipment value of manufacturers, 8 categories / 20 products). In this study, chilled foods refer to products with a shelf life of 10 to 60 days, excluding daily-delivery items (processed foods delivered to stores every day).

The financial loss from wasting chilled food was estimated at 50.9 billion yen, based on the calculation of multiplying the waste rate*2 by the total market size of chilled foods for each storage duration (51 days) and then averaging the results.
Then, financial loss of waste for chilled food with the shelf life extended to 1.5 times (i.e., from 10-60 days to 15-90 days) was calculated at 27.4 billion yen.

This preliminary calculation indicates that by extending the shelf life of chilled foods (with current shelf lives of 10 to 60 days, excluding daily-delivery items) to 1.5 times has potentially secure 23.5 billion yen in value.

*1 Press release: “Processed Food Market in Japan: Key Research Findings 2024” (Announced on October 29, 2024 [English version was announced on November 14, 2024]). The market encompasses 188 items of 15 commercial food categories (for home), and the market size is based on the shipment value of manufacturers.
https://www.yanoresearch.com/en/press-release/show/press_id/3625
*2 Waste rate here indicates the percentage of products that were unsold, including those sent back to manufacturer or wholesaler, discarded by retailer, or donated to food bank.

Noteworthy Topics

Impact of Extending Best-Before Dates

Accused of generating food loss, moves to review industry practices of “one-third rule” *3 and softening regulations regarding shelf life are spreading in food industry.
Products with extended best-before dates help reduce unsold inventory (which would otherwise be returned to manufacturers or wholesalers) and prevent stockouts at retail stores. As a result, these products are becoming increasingly popular among wholesalers and retailers, leading to the expansion of existing transactions and the development of new sales channels. In some cases, shipment volumes to retailers have increased.
Wholesalers are also expanding their sales, as the extension of best-before dates has little effect on pricing or trading conditions.

In logistics, the extended shelf life allows for larger shipment lots (volume per shipment), leading to improved efficiency in warehousing and transportation. This facilitates simplified post-production inventory storage as well as operations related to transfer and redelivery.
Furthermore, the increased flexibility in shipment timing and delivery planning has contributed to reducing logistic processes.
Wholesalers' approaches to inventory management reflecting shelf life extensions vary by company. Some set higher safety stock levels to prevent stockouts, while others prioritize inventory turnover and maintain their traditional operations.

*3 The “one-third rule” is a business custom in Japan related to expiration date management. It divides the period from the manufacturing date to the expiration date into three equal parts, requiring manufacturers to deliver products to retailers within the first third of that period. Under this rule, products that are not shipped within that timeframe are often discarded, leading to higher levels of food waste. To address this issue, study groups are currently examining whether relaxing the rule to a “one-half rule” could help reduce waste.

Future Outlook

Based on the results of this survey, we believe extending best-before dates may lead to various effects throughout the whole food industry supply chain.

For food manufacturers, the ability to store products longer enables larger production batches (on a single production run). This reduces the frequency of changeovers and cleaning tasks, improving efficiency in production line. This may lead to reduction in labor costs and energy consumption.
For logistics and wholesalers, the risk of disposal due to returns decreases, enhancing flexibility in inventory management and distribution. Lower return rates contribute to reducing food loss and lowering environmental impact.
For retailers, fewer markdowns at the point of sale may streamline operation and reduce personnel costs while also cutting disposal-related expenses.

Furthermore, extending best-before dates generates social value by reducing food loss, conserving resources, and lowering environmental impact. For companies committed to ESG principles, it serves as an essential strategy to enhance brand value over the medium to long term.

As seen above, extending best-before dates is not merely a change of labeling; it is a key initiative to improve the efficiency and sustainability of the entire food supply chain. By incorporating greater flexibility and rationality into each stage of the supply chain, companies can reduce while improving operational efficiency and environmental performance.

Research Outline