Food Ingredients and Additives in the Japanese Market

a report by
Kiyoko R Kubomura

Lecturer, World Health Organization (WHO)
 

Japanese food companies are skilful in developing new products even in the face of economic depression. The new products trend today is orientated towards healthy foods including functional products such as prepared foods. Japan is the third-largest market in the world for food ingredients and additives in prepared foods. Ready-to-eat meals are very popular in Japan , the concept of which originated in the US , and were then adapted to Japanese tastes and lifestyles. The new products being developed represent a steadily growing market segment, increasing as a result of high demand on the part of working women who need to save time.

Japan presently offers a variety of functional ingredients controlled by their Food for Specified Health Use (FOSHU) regulatory requirements approved by the Ministry of Health and Welfare. This market represents a figure of ¥421 billion (approximately US$3.3 billion) and includes around 290 items claiming intestinal condition maintenance, blood-pressure reduction, cholesterol reduction and other similarly related medical indications.

In the 16th century, Europeans arriving in Japan had travelled through many Asian countries and crossed a large ocean. These movements brought various spices and vegetables into Japan and, more recently, Japanese food has been influenced by North American and European styles. Japan may now even be facing a problem with junk food as in the US , though the Japanese still protect their fine food culture, which includes the concept of healthiness. Analysis of the Japanese food market is an arduous task due mainly to the difficulty in obtaining food additive and ingredient data. Food additives in Japan are strictly controlled by the government, which permits their use in prepared foods. Using all of the research documentation available, this article provides an analysis that includes sugar alcohols, starch syrups, oligosaccharides, new types of functional food ingredients, milk proteins, soy bean protein and other similar food nutrient ingredients being used in prepared foods with the purpose of improving diets.

The figures that have been collated with regard to this market trend show a slight and regular increase during recent years. Thus, a steady and progressive market　demand for functional food ingredients and additives and an increase in market value has been noticed since the FOSHU regulations were introduced in 1991. In 2001, a market volume of about 3.1 million tonnes was reached, which represents a turnover of around ¥815 billion. The corresponding figures for 2000 were a volume of 3.07 million tonnes with a market value of ¥803.3 billion.

For the past few years, the average volume increase has been approximately 28,000 tonnes, which, for 2000 to 2001, is a tonnage increase of 0.9%. Sales for the same period increased to approximately ¥10.4 billion yen, an increase of 1.2%, the corresponding increases for the period 1999 to 2000 being 2.3% (tonnage) and 4.5% (sales). This represents a stable market situation, especially when the adverse influences of the bovine spongiform encephalopathy (BSE) problem and deflation of the economy are taken into consideration.

The two largest groups of functional ingredients are sweeteners and condiments. Three-quarters of about 2.4 million tons are sweeteners, which have a turnover of ¥25.23 billion and represents a market share of 31%. This group covers both high-intensity sweeteners and bulk (i.e. low-intensity) sweeteners. Demand for condiments is about 240,000 tonnes for a turnover of about ¥160.3 billion. The market has flattened somewhat due to the BSE problem, but is still steady as manufacturers have replaced the fall in demand for beef extracts with an increase in demand for pork and/or chicken extracts. Condiments are one of the main groups of functional ingredients and, in addition to meat extracts, are often classified alongside other food flavours and spices. The demand for food flavours is 47,762 tonnes, which represents a 15.5% volume increase, for a turnover of ¥126.8 billion (i.e. 2% sales increase) over the last year.

After sweeteners and condiments come preservatives, quality improvers, acidulants, food flavours, spices, emulsifiers, fortified agents, stabilisers and food colouring agents, in that order. The Japanese preservative agents market demand has decreased about 3% during this period, due largely to the fact that Japanese consumers dislike the sterilisation and anti-putrefaction practices of food manufacturers.

  
Major Market Trends in Japanese Food Ingredient Classes

Colouring Agents

The emphasis today is to replace artificial colours with natural colours as demanded by consumers. The taste for Korean-type pickles and ethnic-flavoured products such as seasoning and sauces is increasing. Food companies have capitalised on this to change the colours used in these products from the artificial coaltar colours to those obtained from natural sources for which specific government approval is not required. Accordingly, the use of edible tar colours dropped from between 150 tonnes and 160 tonnes to 140 tonnes in 2001, a trend that is likely to continue. Furthermore, some natural colours have additional beneficial functionalities like the carotenoids. Artificial colours need to be specifically permitted by name and use levels in food products and the food manufacturer has to pay the cost of obtaining an examination certificate from the authorities for their use in food products. The cost of this has risen since 2000, so the tar colours are now being confined increasingly to use in other industrial products such as pharmaceuticals, cosmetics and toys.

Acidulants

The acidulants market has decreased and its growth has become negative, mainly due to a shift in the Japanese soft-drinks market to tea-based soft drinks for the past several years. Green-tea drinks especially are becoming increasingly popular. This fall in offtake of acidulants for the conventional carbonated drinks market at the expense of tea drinks has been offset slightly, but the increased use of acidulants for their physiological activities and for pH effectiveness as quality improvement agents. These include their use for bacteriostatic growth prevention, moisture retention and as a taste improver. Adipic acid has been found to be useful in this respect.

About 40,000 tonnes of citric acid is imported yearly, mainly for industrial use since only about 3,000 tonnes is used in the food field. The market for lactic acid is very competitive and difficult to commercialise and several suppliers are competing for market share. The industrial use of lactates has decreased dramatically as the Japanese semiconductor market has fallen. However, the use of calcium lactate has grown for fortified calcium drinks.

Condiments

Savoury flavours are regarded as natural condiments. The Japanese market has flattened and makes little progress as the main user in the market is a typical food service and processed-food industry, which at

the moment is stagnant and uninteresting. Problems such as BSE, non-genetically modified organisms, monobasic calcium phosphate, dibasic calcium phos-phate and allergenic labelling have not helped. On the other hand, the price of the condiment umami is soaring with the increased demand for instant-noodle products, which is still rapidly improving.

Until four or five years ago, the market for nucleotides was at its highest level but has turned around since autumn 2001 and is now at its lowest level. The main reasons for this are the fall in the exchange rate for the yen and the imbalance in trading on the nucleotide international market.

Quality Improvers

Caseinate imports from foreign countries are quite stable. Japanese dairy ingredient suppliers focus mainly on sales for other dairy ingredients such as skimmed milk, cheese, etc. The latest (2002) statistics from the Japanese Ministry of Agriculture, Forestry

& Fisheries state that 6,716 tonnes of vegetable protein has been produced. The 6,000 tonnes mark was reached two years previous to this and the main use for these vegetable proteins, extracted mainly from soy beans and wheat gluten, is as meat replacements or alternatives due to the BSE crisis. These vegetable proteins are also found to be useful for the quality improvement of many prepared foods.

Emulsifiers

Japanese market demand and volumes have stabilised and suppliers and users need to develop improved new applications for their emulsifiers into prepared foods to increase growth. Monoglycerides and polyglycerides are the main contenders with the biggest market shares and food companies. Japanese suppliers have a high level of competence and expertise in their application techniques, with foreign suppliers now attempting to enter the market. Japanese suppliers also have a great deal of know-how about sugar esters and support their applications strongly, in particular in promoting sugar ester for use in instant coffee and chocolate drinks. They can demonstrate that sugar esters can improve chocolate taste and that it has an anti-milking coagulation property in polyethylene terephthalate (PET) bottles. Lecithin demand is quite stable even though the food industry is facing allergenicity labelling issues. It is believed that lecithin has many useful properties and applications for the formulation of prepared foods.

Sweeteners

High-intensity sweeteners are perceived as being nutritionally fashionable for use in low/reduced-calorie products. Sucralose and acesulphame K have recently been approved by the Japanese government. Reduced sugar is a popular concept for new product development and for the reformulation of existing food products. These products have also been evaluated and are claimed to have an extended shelf-life and improved taste. Safety data clearance has recently been granted by the authorities to glycyrrhizin and it is being used for food formulations. Its price has decreased, whereas its imported price from China has increased.

The market for low-intensity bulk sweeteners is quite stable. Related starches are down a little, isomerised sugar has decreased from 1.127 million tonnes for the period October 1999 to September 2000 to 1.096 million tonnes (October 2000 to September 2001). The market for starch syrups has also decreased due to the market shift from conventional soft drinks to tea-based drinks and flavoured water products. The offtake for sugar alcohols (i.e. polyols) is quite stable. Xylitol is slightly down, for example, but erythritol is growing marginally and has reached a market volume of about 5,000 tonnes per year. Trehalose has been on sale for six years and reached an offtake in 2001 of approximately 20,000 tonnes. About 500 companies use it in their various food products. Other sugar alcohols marketed are deoxidised palatinose in con-fectionery products, maltitol in soft drinks and lactitol in confectionery products for their prebiotic properties.

Preservative Agents

The preservative agents market is stagnant and some aspects are even decreasing. The majority of consumers dislike preservatives, which they feel prolong or slow the deterioration of food products to the detriment of their health. Consumers have grown to dislike preservative agents and are moving to substances that extend the shelf-life of foods.

The market demand for sorbic acid has reached saturation point. Food ingredient suppliers have for some time been quite skilful in developing blended preservative mixtures for various food applications. In particular, protamine has been found to have useful shelf-life-extending properties in many side dishes, surimi products and noodles. In steamed bread it exhibits its functionality stability to heat at neutral temperatures and slightly alkaline pH food-processing conditions.

The most popular preservatives in Japan are sodium acetate and glycin. The market demand for sodium acetate is 3,500 tonnes. In addition, blended mixtures of glycin and sodium acetate sell at between ¥800 and ¥1,000 per kilogram. Japanese lysozyme market demand is estimated to be about 8,000 tonnes per year, but its use in meat products has come to a standstill, with some suppliers now selling a product blend of lysozyme and alcohol.

A n t i o x i d a n t s

The most important antioxidants include vitamin E, butylated hydroxy anisole and butylated hydroxy toluene and both market demand and prices remain stable. The demand for vitamin C is approximately 9,000 tonnes per year, of which 6,000 tonnes is used in foods and 2,400 tonnes used in other industries such as pharmaceuticals and cosmetics, and a further 600 tonnes for other miscellaneous applications. Its price is around ¥1,200 per kilogram. One of its main uses is in soft drinks including green tea in which its anti-browning properties are most useful.

E n z y m e s

The world enzymes market is approximately ¥160 billion, of which Japan has a ¥20 billion market share. The use of enzymes for fibre and detergent applications is decreasing, but the ratio of their use for food applications is increasing in the international marketplace. This is currently estimated to be ¥58 billion, of which the Japanese share is about ¥11 billion. The use of enzymes for bread-making is steadily increasing and improving the product, while the use of potassium bromate is being phased out.

F l a v o u r s

Statistics supplied by the Japan Flavour Industrial Association estimated Japanese flavour production in 2000 to be 48,653 tonnes, representing a sales turnover of ¥12.424 billion. The total market, which includes the actual production volume for both imports and exports, is 47,762 tonnes, with a sales turnover of ¥126.843 billion. The real situation remains difficult to unravel as prices have decreased and actual production volumes have increased due to Japan ’s adverse economic situation and the devaluation of the yen on world markets.

C o n c l u s i o n

The Japanese food ingredients market is quite unique in that it is in turmoil. Suppliers to the Japanese market are very adept at developing new formulae and products and are skilful in creating new recipes to react to market and consumer trends. There is a great deal of pressure on Japan ’s profitability as the import prices of various international ingredients rise due to the falling yen exchange rates. The industry is attempting to counter these adverse influences by developing new functional ingredients for food systems that will deliver healthier, more nutritious processed foods for improved health and longer life.