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Key challenges in sourcing for Japanese food ingredients By Riccardo Giacomessi, Director, Food & Beverage Industry Europe

Lemon tree

It was not too long ago that South East Asians were unfamiliar with Japanese food such as miso, yakitori and karaage. Today, they can be found in every nook and cranny of their shopping malls, restaurants and homes.

Be it on the busy streets of Singapore, sophisticated malls in Kuala Lumpur or even petrol stations in Jakarta, Japanese food are becoming staple diets for many local communities. Bangkok, which houses the fourth largest Japanese community outside Japan, is the epitome of this as Japanese restaurants, bars and coffee shops are found scattered all around the city.

As the popularity of Japanese pop culture and its entertainment industry expands into the rest of Asia, along with it comes the desire for the country’s cuisine as food manufacturers and food and beverage (F&B) operators strive to fulfill consumer demand.

Japan looking to the world for growth

In the past, many Japanese companies were driven by domestic growth. However, this has changed considerably as these companies are now focused on growth prospects outside of their home market due largely to consumer demand. According to Nikkei Asian Review, the Japanese government is targeting to achieve JPY 1 trillion worth of food and agricultural exports worldwide by 2020.

With Asia already accounting for about three-quarters of the country’s food and agricultural exports, Japanese food brands are fast-establishing a presence in countries like Thailand, Cambodia, Myanmar and Vietnam.

This increasing demand in South East Asia (SEA) nations is due to rising incomes as well as demand for better quality food products as Japanese food products are often perceived by consumers as healthier and safer food options.

Key challenges in reaching SEA consumers

As a sourcing manager, I visit F&B trade shows all over the world to keep my pulse on the industry’s development. Often, I will join the throngs of visitors crowding around the booths of food ingredients suppliers from Japan and listen in to their various comments and feedback about the challenges faced in sourcing for food ingredients.

Chief among these concerns were about not having a clear understanding of the necessary regulatory processes within the SEA region. Although the increasing number of free trade agreements is expected to help streamline existing tariffs, quotas and other traditional barriers, the complex regulatory environment is still prevalent among many SEA countries.

As governments continue to impose stringent food processing regulations and introduce stricter penalties for violations, businesses also must revamp their own processes accordingly to comply with these required changes. This can be a barrier for businesses in being able to reach the markets in a timely manner.

Next challenge many businesses face is in having a reliable logistics provider to help bring these ingredients to the market. As food ingredients are often delicate and can easily be damaged, logistics risk, which may occur during transport, freight forwarding, warehousing, distribution or retail, is always a major concern for food suppliers.

There is also a need to ensure that the right storage facilities and infrastructure are in place for a safe and secure transportation and warehousing for goods, particularly in consideration of the hot and humid tropical climates across South East Asia.

At this point, to help minimize food loss, having a logistics provider that is well-versed with compliance requirements for the manufacturing and storage process is of utmost importance to ensure that ingredients arrive safely, securely and in good condition.

The application of food technology is widespread across our daily inventory of food produce. From extensive stages of research and development right up to manufacturing food ingredients, processing techniques and packaging materials, modern technology is applied at all stages of the production-to-consumption cycle.

Manufacturers and suppliers must leverage on the industry’s best practices and technology applications to fulfil the growing population’s hunger for tasty, diverse, easily accessible yet nutritious and safe food.

To overcome these challenges, it is crucial for food manufacturers to seek out a business partner who has a clear understanding of the industry while at the same time having strong insights into the different requirements and demands of each specific market.

DKSH has in the past successfully assisted suppliers from Japan to penetrate various markets across South East Asia. Among the many food innovations introduced include: Lysozyme, which is extracted from egg white and can extend the shelf life of processed foods; fermentation as an advanced unique flavor technology; and the diverse Yuzu fruit, with its well-known source of antioxidants and its use as an aromatic zest to garnish dishes.

Undoubtedly, Japanese food ingredients are becoming increasingly popular. If you are a food manufacturer or food supplier looking to penetrate the South East Asian markets and other global markets including Europe, this is an opportunity that will likely demand your team’s further consideration.

Talking about Europe, I am looking forward to sharing my thoughts on the challenges of sourcing for ingredients into the European markets. Keep a look out for this article coming soon.

Riccardo Giacomessi

About the author

Riccardo is based in Italy and has a Degree in Food Sciences and Technology. He is currently responsible for DKSH’s Business Line Food & Beverage Industry Europe and is responsible for the sourcing of the business line globally.