bith hong ling

Japan's seafood consumption and the impact of the economic downturn

Bith-Hong Ling

Department of Marketing,National Chung-Hsing Univesity

TAIWAN, ROC

29 July 2009

bhling@dragon.nchu.edu.tw

2009 Ridley Aqua-Feed Australian Prawn Farmers Association Conference

July 29-31, Townsville, Queensland

OutlinesOverview of Japan’s seafood consumption

Supply and demand Distribution channels Seafood expenditure: • by income, age, purchase of place

Seafood consumption trend

Recent economic downturnImpacts on Japan’s seafood market• Changes in food consumption pattern• Changes in fishery import• Changes in import share and price by origin• Changes in seafood choice

Domestic production and trade, 1970-20071,000 t.

Seafood consumption, 1970-2007

1,000 t.

93% 88% 81% 70% 57% 51% 57% 61%99%

2007

Major fish production, 2000-08

1,000 t.

What are supplied domestically?

Imports of fishery products, 2008

What are supplied by foreign countries?

Seasonal consumption, 2007-08Seasonal production: tuna(winter), mackerel(summer-autumn), squids(summer) Occasion seasonal demand: New Year celebration (Dec-Jan.), Cherry Blossom season (April), Bon festival (mid-August)

General distribution system (6 step process)

Distribution channels

Fish producers Landing market wholesalersLanding market brokersCentral market wholesalersIntermediate wholesalersFood services/retailers storesConsumers

Direct sales system (3 step process)Fish producers Landing market wholesalers/trading companyFood services/retailers storesConsumers Source: Scuster and Kazunari (2001).

The world’s biggest fish wholesale market in the world

Tsukiji fish market in Tokyo

Checking quality before the tuna auction

Tsukiji fish market in Tokyo: tuna

During the tuna auction

Tsukiji Fish Market in Tokyo: tuna

Tsukiji fish market in Tokyo: tuna

Tsukiji fish market in Tokyo: shrimp

Tsukiji fish market in Tokyo: shrimp

Tsukiji fish market in Tokyo: shrimp

Seafood expenditure: by purchase place

(64%)

(65%)

(58%) (72%)

Source: Japan’s National Consumption Survey FY 2005

yen

/ mon

th/h

ouse

hold

Seafood expenditure: by incomeye

n / m

onth

/hou

seho

ld

Fresh fish and shellfish accounting for 67% (5,224 yen) of monthly seafood spending, followed by salted and dried fish (14.8%, 1,150 yen).

household income group (10 thousand yen)

Japan’s National Consumption Survey FY 2005

Seafood expenditure: by ageThe purchase of fresh fish and shellfish declined significantly among younger people (age under 40). Aging effect can be seen for people born between 1935and 1955 (age 50 to 69).

age group

National Consumption Survey FY 2005

yen

/ mon

th/h

ouse

hold

kg / year

Seafood consumption trend2007 seafood consumption per capita in Japan had decreased back to the 1970 level (32kg per year), while meat consumption had increased steadily.

Factors behind a “shift away from fish” % Family members do not like fishery products Child/children (67.6%)

31.6

Fish is more expensive than meat 30.6

Cooking fish is bothersome 24.8

Washing fish grills is troublesome 19.5

I do not like fishery products 17.9

I do not know many fish recipes 13.1

Removing fish bones is bothersome 12.8

Fish dishes are not filling 12.1

There are no reliable fish retailers nearby 9.7Source: “2005 Survey on Food Materials”, Japan Fisheries Association.

Seafood consumption trend

GDP per capita, Japan (in 2008 US$)

In a recent economic downturn ….

GDP growth rate, Japan(%)

How has the Japan’s seafood market been changed under the recent economic downturn?

yen / month

Changes in food consumption patternThe largest share of household food expenditure is still for seafood purchase, but its share is on the decreasing rate : a switch from seafood to meat.

Changes in fishery import

1,000 t

million US$

exchange rate: yen/per US$

unit price: US$/per kg

1,000 m.t.

Fishery imports (volume ), by type

million US$

Fishery imports (value), by type

Valu

e (m

illio

n U

S$)

* fresh, chilled and frozen only

Fishery imports (value), by species

Import share of shrimps (in volume)

Changes in import share and price

Import price of shrimp

Vietnam and Indonesia largely dominated the Japan shrimp import market, but also strongly faced the export competition from Thailand, India and China. Australia , focusing on premium prawns, received a steadily highest unit price.

yen/year yen/t

Consumption expenditure(yen/per household)

Changes in seafood choice

yen/year g/year

Consumption amount (g/per household)

Household reduced monthly expenditures on tuna (expensive fish) from 2708 to 1897 yen during 1998-08, while demand for salmon has been growing .

Further empirical works

Building the multivariate empirical model:

to analyze the short-run and long-run effects of macroeconomic dynamics on the Japan’s seafood consumption trend.

to analyze how the movement of Japanese currency has influenced the price formation of major imported seafood (tunas and shrimp/prawns) in Japan.