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Historical look at Japan's FF industry: from katei togyo to gyoza to TV dinners.

Historical Look at Japan's FF Industry: From Katei Togyo to Gyoza to TV dinners

Tracing the origins of humble fish freezing enterprises in 1935 to today's sophisticated business. With annual production of 845,000 tons, consumption tops 1.1 billion thanks to rising imports.

Marine product producers were the pioneers of the Japanese frozen food industry. It was around 1935 that Nippon Suisan and other companies first began marketing small packets of frozen fish fillets call katei togyo (frozen fish for family use). However, these were launched on a trial basis in relatively small quantities, and production ceased at the time of the Pacific War.

The manufacture of frozen foods was resumed in 1950, when the majority of seafood processors began production in earnest. The range of products was very small, including foods such as chawanmushi (a type of savory blancmange), fish sticks, meatballs, shumai, and gyoza (both types of steamed dumplings), and the volume of output was no more than a few hundred tons.

After some 10 years of trial and error; frozen food packers were in a position to form a distinct industry. At this point, in 1959, four major marine product companies -- Nichirei, Nippon Suisan Kaisha, Nichiro Gyogyo Kaisha, and Taiyo Fishery -- established the Japan Frozen Food Promotion Association (JFFPA), the activities of which included the popularization of the use of frozens among consumers, and the keeping of orderly statistics on production.

Tracking Japanese FF output has, in fact, been kept since 1958. In that year, volume hit 1,591 tons as follows: marine products, 18 tons; vegetables, 139 tons; fruits, 107 tons; prepared foods, 1,327 tons.

The value of the total factory shipments in the above statistics was 234 million [Yen].

Following the creation of the JFFPA, production of frozen foods grew sharply, reaching 20,361 tons reflected in the following totals just five years later, in 1964; marine products, 7,208 tons; vegetables, 2,070 tons; fruits, 2,036 tons; livestock products, 1,108 tons; prepared foods, 7,244 tons; confectioneries, 687 tons.

At this time a major change began to appear in the Japanese seafood industry. There was a rapid increase in the sale in frozen fish caught in coastal waters (the varieties of which change sharply from season to season and are each caught in large quantities), and of fish caught through deep-sea fishing. However, users showed little appreciation of the advantages of frozen fish. Hence consumption grew less quickly than expected and stocks built up.

In view of this situation the government decided at cabinet level (on July 9, 1963) to promote the distribution and consumption of fish in frozen form. Consequently, in June of 1964 the Frozen Fish Association was established with government backing. Seven institutions formed the membership of this association: four members of the JFFPA already named, together with Kyokuyo, Hoko Fishing, and the National Association of Fisheries Co-operative Associations (Zengyoren). This association directed its activities toward popularizing the consumption of frozen foods.

Prompted by this, in January 1965 the Science and Technology Agency issued a recommendation urging the establishment of a low-temperature distribution system--the so-called cold chain--in order to modernize the structure of distribution of foodstuffs. This denoted a heightening degree of interest in low-temperature distribution of perishable foodstuffs.

However, the meaning of "low-temperature" was very broad, covering a range from 10 [degrees] C to minus 20 [degrees] C or below. Also, there were difficulties in maintaining the appropriate temperature for each variety of foodstuff. In light of this, it did not prove easy to realize the cold chain concept of a uniform low-temperature distribution system.

The JFFA Evolves

The Japanese government reached the conclusion that the future core items in the distribution of perishable foods at low temperatures would be those frozen foods for which a system for distribution at a temperature of minus 18 [degrees] C or below already existed. Accordingly, the Ministry of Agriculture, Forestry and Fisheries (MAFF) took the first step toward creating the cold chain structure by approving the establishment of the Japan Frozen Foods Association (JFFA).

The JFFA was established on July 1, 1969, and thus celebrates its twentieth anniversary this year. The core of its original membership comprised the six companies and one federation that formed the Frozen Fish Association. They were joined by three dairy product manufacturers--Snow Brand Milk Products, Meiji Milk Products, and Morinaga Milk Industry -- and by two companies already engaged in frozen foods processing -- Katokichi and Yayoi Foods, making a total of 12 foodstuffs-related institutions.

The remainder of the original membership was composed of equipment makers: seven major electrical equipment manufacturers -- Mitsubishi Electric, Toshiba, Fuji Electric Kaden Hanbai, Sharp, Sanyo Electric, Hitachi, Matsushita Electric Industrial -- and the Japan Refrigeration and Air Conditioning Industry Association, representing the medium-sized showcase manufacturers. The association started off with 20 members.

What is particularly noteworthy about the JFFA is the fact that from the very beginning its member companies were not entirely representative of food-related institutions. This was because the basic thinking behind the association's birth was that in order to develop the frozen food industry it was necessary to give close attention not only to frozen foods themselves but also to increasing and improving associated equipment and the ability to control temperature. At the same time there was a call for a system of low-temperature distribution of perishable foods.

With the establishment of the JFFA, the aforementioned Japan Frozen Food Promotion Association and Frozen Fish Association were dissolved, and their assets and operations transferred to the remaining body.

In 1969, production of frozen foods in Japan totaled 123,499 tons, valued at 22,847,000,000 [Yen], as follows: marine products, 40,384 tons; vegetables, 22,677 tons; fruits, 6,052 tons; livestock products, 7,120 tons; prepared foods, 63,655 tons; confectioneries, 3,408 tons.

As the first step toward spreading the cold chain, the JFFA sought to promote the popularity of high-grade frozen foods. It did so by carrying out a number of nationwide activities aimed at developing users' awareness of FF and related equipment, disseminating accurate information, and increasing consumption.

A principal function of the association is to advise users about product quality, preservative qualities, hygiene, safety, benefits of use, convenience, stable prices, and other advantages of frozen foods. It seeks to persuade them that the use of frozens can improve consumer diets and enhance the distribution of perishables. The JFFA also spreads basic knowledge concerning the best ways to purchase, store, thaw, and prepare frozen foods according to intended use.

The frozen food industry was quick to recognize that the most important factor in ensuring its ongoing development was the setting up of a system for controlling product quality. Thus at the time the JFFA was founded, a study was launched into the creation of a system of self inspection at the manufacturing stage which led to the establishment of such a system in March of the following year (1970).

Under this system, if factories of member companies producing frozen foods are equipped with production facilities that are at or above a certain standard and have a quality-control system, then they are designated "JFFA-certified plants." Subject to passing inspection by the Japan Frozen Foods Inspection Association -- the body responsible for the actual conduct of inspections -- the JFFA's quality certification mark may be affixed to the products of the relevant certified plants prior to sale.

Surveys have shown that today, some 20 years after this system was introduced, approximately 80% of Japanese consumers recognize the JFFA certification mark.

It is insufficient to conduct quality control inspection purely at the manufacturing stage of frozen foods. To ensure that top quality products are supplied to the end-user, consistently correct handling (temperature control) is essential at each stage of the distribution process -- from manufacture and storage, to transportation, delivery, and final sale. Thus at the same time as putting in place the system of quality control at the manufacturing stage, the JFFA has also laid down standards for handling these goods at the distribution stage.

Taking the United States -- the country that is the most advanced in the field of frozen foods -- as a model, in June 1971 the JFFA instituted the "Voluntary Standards for Frozen Food Handling." Adhering to the rules guarantees that at each stage in the distribution process, frozen foods must be consistently kept at a maximum temperature of minus 18 [degrees] C.

To ensure thorough implementation of quality control at both the manufacturing and distribution stages, the JFFA circulated films, posters, and pamphlets and used every possible occasion to publicize the meaning of the standards. As part of its efforts to enhance awareness among individuals involved in the Japanese industry, in October of 1972 the association invited E.W. William, publisher of Quick Frozen Foods International to lead a seminar in Tokyo on the subject: "Diagnosis of Japanese Frozen Foods."

Research and Inspection

The JFFA conducts scientific experiments into the maintenance of the quality of frozen foods, including examinations of storage temperatures and storage periods at each stage of the distribution process, of product quality, and of household storage methods. Surveys are also made of attitudes of consumers and distributors. Related materials containing these data are published by the association.


The combined effect of the series of essential, basic activities described above was to boost quality control and product development by FF manufacturers. In addition, the 1970s brought the spread of supermarkets throughout Japan, and at the same time equipment manufacturers stepped up the production and marketing of products such as deep-freezers for household use and microwave ovens, which spurred increasingly widespread use of frozen foods.

As a result of this, over the five years immediately following the establishment of the JFFA, the volume of production of frozens in Japan grew at an annual rate of 30%. In 1974, overall production totaled 338,820 tons, representing a 2.7-fold increase over five years earlier.

However, the occurrence of the first fuel oil crisis in 1973 brought sharp increases in labor rates and raw materials costs, in particular the cost of packaging materials, which had a major impact on the frozen food industry. Because of this, in 1974 the increase in production volume over the previous year was held to only 6.6%.

The same trend persisted through 1975, when production volume grew by only 4.8%. However, frozen food manufacturers subsequently took steps to rationalize their operations. This paid off when the second oil crisis hit in 1976, as production rose by 15.2% over the previous year to reach 409,150 tons. After that the rate grew approximately 10% annually. In 1978, ten years after the establishment of the JFFA, production volume had risen to 482,913 tons, a 3.9-fold increase over the decade. The following is a breakdown of this aggregate figure:

Marine products, 46,615 tons; vegetables, 77,787 tons; fruits, 8,260 tons; fowl meat, 10,482 tons; meat, 4,137 tons; prepared foods, 327,577 tons; confectioneries, 8,055 tons.

The value of total factory shipments was 209,059 million [Yen], which was 9.2 times the amount recorded a decade earlier.

In 1979, output of frozen foods totaled 521,200 tons, topping the half-million-ton level for the first time. The large size of this figure meant that the sharp growth experienced previously could no longer be looked forward to, although the development of the restaurant industry and of the market for prepared take-home meals continued to buoy the frozen food industry to stable growth. From 1980-86, production increased at a steady rate of 6-9% annually.

In 1986, FF production in Japan reached 823,064 tons, topping the 800,000 level for the first time. In 1987, however, domestic production of vegetables declined under the impact of increased imports, and output of marine products also fell. These and other factors held overall production volume in that year to 845,711 tons. The year-on-year increase of only 2.8% was the lowest in 30 years. Total factory shipments were valued at 473,253 million [Yen].

During the course of growth in Japanese FF production over the past three decades, there has of course been a surge in the number of manufacturers launching into production. Most of these have become members of the JFFA, been subjected to the association's quality inspections, and been permitted to use its certification mark. From JFFA's original roster 20 years ago of only 12 food manufacturers, the number today has risen to 860 companies. Including the seven founding-member equipment makers and seven distribution and wholesaling companies that joined the association three years ago, the total membership of the JFFA today stands at an impressive 874 firms.

It is interesting to note that the companies that have newly launched into the production of frozen foods include not only enterprises that were already engaged in food manufacture, but also firms with absolutely no connection with foodstuffs. For example: fiber fabricators, steelmakers, gas utilities, and oxygen producers.

The Recent Picture

The following is a breakdown of Japanese frozen food production during 1987:

Marine products, 85,879 (10.2%); vegetables, 89,658 tons (10.6%); fruits, 3,662 tons (0.5%); fowl meat, 13,736 tons (1.6%); meat, 11,273 tons (1.3%); prepared foods, 618,285 tons (73.1%); confectioneries, 23,218 tons, (2.7%).

While the numbers above reflect tonnage of 845,711, overall consumption of frozen foods in 1987 in fact reached 1,100,471 tons, if imports of frozen vegetables totaling 254,760 tons are added. This equates to 9 kilograms per capita consumption.

The following are the principal component characteristics of Japan's frozen food production and consumption.

* At 73.1%, the proportion of domestic production accounted for by prepared foods is very large. However, taking into account the large scale imports of frozen vegetables, the proportion of vegetables in domestic consumption jumps to 31.3%, while prepared foods falls to 56.3%.

* Compared with other developed countries, the market share frozen fruits, fowl, and meat are extremely small.

* Products for retail use account for 27.6% of total domestic FF production volume, while those for catering account for an overwhelming 72.4%.

The proportion of frozen foods for retail use climbed to a peak of 46% in 1973, subsequently declining every year. In 1987, however, the consumption of retail FF rose by 7.7% over the preceding year, while catering's market share advanced by only 1%. As a result, the proportion of the former grew by 1.3 points over the preceding year -- the first such rise in recent years.

* The growth of the Japanese FF industry could be said to have been underpinned by the rise of frozens manufactured for the catering segment. Initially, the main users were caterers for school meals, but today the proportion sold for school meals and company canteens is declining, whereas demand from the restaurant industry and by stores preparing take-home meals is rising.

Trends and Issues

* Major frozen food manufacturers are active in the development of new products. In recent years some 300 to 400 new products, including re-launches of improved versions of existing products, have appeared on the market annually. The total number of frozen-food items developed and launched to date exceeds 2,000. There are, for example, 74 types of croquettes, indicating how swiftly products are being diversified. Because of this, in many cases products that have been painstakingly developed quickly disappear from the market under the weight of competition. In these cases, efficiency is low in proportion to the heavy expenditure involved.

However, as the number of manufacturers rises and rivalry among them becomes increasingly fierce, it is impossible for them to cease their efforts to develop new products. Thus every manufacturer is compelled to accept some degree of loss, prompting them to reflect on the advisability of this behavior.

* The reason why the ratio of prepared foods is high has been explained above. Today, this is being accentuated by a strong consumer trend toward the use of convenience foods. Evidencing this trend, there is particularly strong growth in demand for convenience foods that need only be heated in a microwave oven, products that require only to be inserted in boiling water without removal from their packaging, and pre-fried frozens that can be made ready for eating by heating them in their underfrosted state in an oven or oven-toaster.

* Among prepared foods there is a notable increase in sales of varieties for consumption as snacks, such as pizzas, spring rolls, cakes, pilafs, and Chinese-style buns.

* An increasing number of major frozen food companies are manufacturing frozen foods in foreign countries (such as Korea, Taiwan, China, Hong Kong, Thailand) and importing them into Japan. At the same time imports from the United States, Canada, and European countries are rising. However, the exact quantity of these imports is difficult to ascertain, and in any event not all would be classified strictly as frozen foods.

* The increase in the number of FF manufacturers and in overall production volume is creating increasingly heated competition among these producers. Packers of chilled foods and other products are adding to the heavy competition.

As a result of this, frozen foods have been the subject of price-cutting wars. Their image has suffered as a consequence, and profitability has been eroded. This is the biggest and most painful problem felt by today's industry.

PHOTO : JFFA's quality certification mark appears on all product packaging produced by member

PHOTO : companies.
COPYRIGHT 1989 E.W. Williams Publications, Inc.
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Author:Yamada, Yoshiharu
Publication:Quick Frozen Foods International
Date:Jul 1, 1989
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