Industry Trend Analysis - Japan Dietary Shifts: Westernisation Trends Driving Meat Uptake - APR 2018

BMI View: Traditionally one of the healthiest markets in the world, Japanese diets are undergoing something of a transformation, with a shift toward food groups more popular in Western diets. Spending on fish, rice and noodles are on the decline, while spending on pork, poultry and cheese are projected to see large increases over the next five years. Younger generations are driving this trend, despite Japan's large pensionable population. Convenience for consumers is becoming increasingly important, but this is not at the expense of quality, which will continue to inform purchasing decisions even in a sluggish economy.

The Japanese economy's slow and stable economic expansion between 2014-2017 looks likely to extend into 2018 as leading indicators remain positive and the re-election of Abe looks set to trigger productivity-enhancing reforms. Our Country Risk team forecasts real GDP growth of 1.5% in 2018, down slightly from 1.8% in 2017. Over the longer-term, productivity gains will be hard to come by, and growth will average just 0.4% from 2019 to 2022. Consumer spending is on a similar trajectory, with 2017 marking a growth peak before slowing into 2018 and further over 2019-2022. Real private final consumption growth will average just 1.1% over 2019-2022, down from 1.6% in 2018 and 1.7% in 2017.

Food, Drinks & Restaurants Outperformers Amid Weak Spending Growth

Consumption Muted Over The Next Five Years
Real Private Final Consumption and Real GDP growth, % y-o-y
e/f=BMI estimate/forecast. Source: BMI/Cabinet Office

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