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JAPANESE MARKET STAGNATES BUT DIVERSIFIES INTO NEW FORMATS

JAPANESE MARKET STAGNATES BUT DIVERSIFIES INTO NEW FORMATS



The latest figures from market research company Euromonitor International suggest that the coffee market in Japan is stagnating – but it’s not all bad news.

As products diversification continues, demographic developments and changing lifestyles are affecting demand for coffee in Japan.

The company told C&CI that the market stagnated in 2018 in terms of volume and current value. However, although overall demand may have stagnated, growth is taking place in the fresh coffee and ‘personalised’ coffee formats, which are driving sales.

The way Japanese consumers order their coffee could be about to change too after Starbucks Coffee Japan Ltd’s June 2019 announcement that it plans to start a service to allow customers to order and pay through a smartphone app, without waiting in line.

“Coffee remained the largest category in the hot drinks sector,” said Euromonitor, “but the slowdown in its performance is due in part to consumers shifting to smaller pack sizes as a result of the ageing of the population and the diminishing size of households.

“Demographic developments, changing lifestyles and trends in coffee preferences led to consumers opting for quality and richness of flavour over quantity,” said Euromonitor, a trend described as ‘less and rich.’ This led manufacturers to focus on premium, small portion coffee products.

In addition, Euromonitor told C&CI, demand for instant coffee mixes continued to contract, in the retail and foodservice segments, while fresh coffee products maintained growth in both channels, as demand became increasingly sophisticated and consumers preferred the ‘natural flavour’ of fresh coffee over sweetened instant mix coffee.

The formats in which coffee products are being made available to consumers is also becoming increasingly personalised.

“Even within households, demand has diversified and become more individual, with family members enjoying different drinks rather than sharing one large prepared portion of coffee,” Euromonitor’s analysts told C&CI.

For more information see the upcoming September 2019 issue of Coffee & Cocoa International.

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