2016 Total Packaging Market Size (million units):

201,772

2011-16 Total Packaging Historic CAGR:

0.7%

2016-21 Total Packaging Forecast CAGR:

0.6%

• The total Japanese packaging industry, sized at over 201 bn units in 2016, is expected to continue seeing cautious growth.
• Food and beverage packaging continues to dominate packaging, but a niche growth opportunity exists in cat food.
• Flexible packaging continues to lead in size, and rigid plastic ranks second.

• In home care, small pack sizes are benefiting from product formulations becoming increasingly concentrated, while bulk packs are seeing good growth due to the popularity of refill packs. These trends are being partly driven by environmental concerns, while refill packs also benefit from offering low unit prices and appeal to increasingly price-sensitive consumers.
• Consumers are increasingly seeking more ethical lifestyles in Japan, with this impacting consumer purchasing trends and nearly all aspects of life, including eating, housing and clothing. The ethical living impact is having a significant impact on beauty and personal care, with a good performance for natural and organic products. Consumer demand for more natural and environmentally friendly products is in turn proving a major driver for innovation in beauty and personal care packaging.
• Sustainable packaging is a strong trend in soft drinks, benefiting from a growing focus on environmental issues among Japanese consumers and rising concern over the impact of discarded soft drinks packaging. PET bottles are benefiting from this trend, not only due to being light in weight and recyclable but also from the widening use of recycled PET.
• Population ageing is impacting alcoholic drinks and packaging in a number of ways. Older consumers often cut back on their overall consumption of alcoholic drinks, which is impacting overall sales. They also often prefer drinking at home rather than socialising in the on-trade with colleagues or friends, with population ageing contributing to the strong cocooning trend seen during the review period.

• Food with function claims: Food with Function Claims (FFC) is a new accreditation that came into force in April 2015. This accreditation covers food sold in Japan and making specific health claims, both processed and unprocessed, Packaged food was already seeing a good performance for Food for Specified Health Uses (FOSHU) products. However, obtaining FOSHU accreditation is time-consuming, difficult and expensive for manufacturers, as the process requires clinical trials to support health claims with scientific evidence.
• New food labelling standard: The new Food Labelling Standard came into force in April 2015, with this legislation aiming to make food labelling simpler and easier to understand. This law combines the former Food Sanitation Act, the Japanese Agricultural Standard Law and the Health Promotion Act. The new law regulates food sold in Japan by setting new standards for labelling. Prior to April 2015, food labelling was often very complicated as the three previous regulations were applied according to different food types, which contained different classifications for the same product.

• Complicated waste management system in Japan: Complicated waste management systems remain a challenge in Japan. While consumers are required to separate household waste, waste categories vary widely across different areas and can be complicated, being the responsibility of the local authorities. Even Tokyo's 23 wards feature different systems. Waste collection dates also vary for different waste categories, with some types collected weekly, some fortnightly, some monthly and some such as batteries being collected only once per year.
• Overall recycling rate stagnates: The most recent recycling rates available for MSW date from fiscal 2014. In this year, the ratio of recycled MSW reached 21%, with this being the same rate seen in fiscal 2013. In fiscal 2015, steel metal tins had the highest recycling rate of 93%, followed by aluminum metal tins at 90%. PET bottles also had a high recycling rate at 87% in the year, with this increasing by four percentage points from fiscal 2014. Glass packaging and liquid cartons recorded rates of 69% and 34% respectively in 2015. Returnable glass bottles are also increasing in popularity.

• Japan’s aging population drives growth of universal design: Japan has the world’s highest old-age dependency ratio, with this reaching almost 46% in 2016 and increasing rapidly from below 37% in 2011. The country's population will continue to be the oldest in the world in the forecast period. There is a growing focus on offering more accessible and easy- use packaging as a result, with the term universal design referring to designs that can be accessed and used by anybody regardless of age, size, ability or disability. Universal design has become a key concept for manufacturers and packagers in areas such as beauty and personal care, mostly due to the country’s large number of elderly consumers. As people age, it becomes more difficult to use certain types of packaging, including small closures, complicated designs and packaging or closures that require strength to use.
• Food packaging trends are expanding into beauty and personal care: With growing demand for more natural and fresher products, packaged food is seeing a rise for vacuum packaging. This includes plastic bottles that shut out air in order to avoid oxidisation. In 2016 this trend increasingly expanded into beauty and personal care. One innovative example was Japan Gateway’s shampoo and conditioner line Reveur Fraicheur. The range is positioned as "raw" to emphasise its natural nature and uses vacuum packaging for its plastic pouches with a lotion pump closure. This approach is proving popular among the growing number of Japanese consumers attracted by natural and organic products. Vacuum packs are likely to see more innovative launches over the forecast period.