Japan's Chocolate And Cocoa Confectionery Industry And Competitive Landscape 2023

Industry Landscape

Demand Conditions 

• In 2022, Japan's imports of chocolate and confectionery containing cocoa (HS code 1806) continued to increase, rising to USD 721 million and 182 million kilograms, an increase of over 7% in both value and volume terms. The same year, Japan's exports of chocolate and confectionery containing cocoa (HS code 1806) amounted to USD 102.7 million by value and 8.6 million kilograms by volume, a decline of 2% in dollar terms but an increase of 14% in volume terms. 

• At around 2 kilograms per person, Japan's per capita chocolate consumption is high relative to Asia, but low compared to Europe where consumption is between 5 kilograms and 10 kilograms per person, suggesting potential room for growth. 

Supply Factors

• Japan imports virtually all raw materials related to chocolate production. The country's imports of cocoa powder (HS code 1805), cocoa butter (HS code 1804), cocoa paste (HS code 1803), and cocoa beans (HS code 1801) far exceed exports which are negligble.

• Cacao cultivation in Japan is negligible (the FAO has no available data on cacao acreage in Japan) with only a few players such as Tokyo Cacao cultivating cacao on a small-scale in the country. 

Trends And Opportunities 

• Innovations incorporating Japanese culture remains popular in Japan's chocolate space, be it exotic flavors like cherry blossom, raw materials sourced from various perfectures, and product innovations that blend chocolate with traditional confections (such as daifuku).

• Chocolate is popular during Valentine's Day, not just as gifts for lovers (usually these tend to be pricier chocolates) but also as gifts to co-workers and family members (generally cheaper chocolates). Google search interest for "chocolate" in Japan spikes during Valentine's Day.

Challenges

• The Japanese market in general has unique characteristics including a milder preference for sweet flavors compared to western palates, a relatively higher weight attached to packaging aesthetics compared to the west, and customs that could differ materially (for instance in Japan, chocolate is typically gifted by women to men on Valentine's Day, in contrast to the West where men typically gift chocolates to women, while men typically gift chocolates to women on White Day, a significant festive season in Japan but almost unheard of in the West). Localization is key to suceed in Japan's cocoa and chocolate market.

Competitive Landscape

Lindt & Sprüngli 

• Swiss premium chocolate player Lindt & Sprüngli's product offering in Japan includes boxed chocolates, truffles, pralines, and tablets (marketed under a portfolio of brands including Lindor, their flagship Lindt brand and its various sub-brands including Lindt Excellence, Lindt Fioretto, Lindt Choco Fruits, Lindt Nuxor, Lindt Creation, and Lindt Les Grandes among others), along with desserts and baked goods prepared with cocoa and chocolate such as macarons, cakes, cookies, and beverages. The company's retail channels in Japan include their official online store, Lindt stores, Lindt cafes, and online stores on marketplace platforms like Rakuten.

• Recent developments: 

  • New flavor launches and re-introductions in 2023 include around 13 new flavors of Lindor chocolate truffles (translating into approximately one new flavor each month) such as raspberries and cream, and raspberry cheesecake among others. A slew of coconut flavors across various product lines were rolled out during summer season (June-August), curiously coinciding with a spike in search interest for coconuts in Japan, possibly in response to the release of popular Japanese girl band niziU's album 'Coconuts' which topped the Billboard Japan Hot Albums chart in July. Lindt launched coconut offerings across Lindt Fioretto, Lindt Choco Fruits, and Lindt Excellence tablets all during the months of July and August. 

• • Furthermore, new flavors were launched or re-introduced during the year for Lindt Creation chocolate tablets (three new flavors namely Crème Brûlée, 100% cocoa, and mango and almond), Lindt Excellence tablets, and Lindt Fioretto (in stracciatella, strawberry, and peach passion fruit flavors).

  • Seasonal launches during the year include new collections for Spring and Summer featuring packaging designs that resonate with the seasons, a slew of themed chocolate products for Christmas in a variety of Chrismas-themed packaging options and figurines (such as umbrella-shaped chocolate, and limited edition truffles and chocolate figurines), Christmas advent calendars, themed packaging for Halloween and Mother's Day, a new collection for Valentine's Day, and a Japan Collection featuring origami and flower-inspired designs to usher in the New Year. Chocolate figurines including their iconic gold bunnies, eggs, little chicks and carrots were rolled out for for Easter, and chocolate hearts for Valentine's Day.  

  • Non-chocolate launches were numerous during the year, notable ones being desserts and beverages featuring localized flavors and locally-sourced ingredients reflecting Lindt's localization strategy, such as their limited edition cherry pistachio-flavored sakura drinks and macarons for cherry blossom season in Japan, a limited edition Nagano Purple Chocolate Drink which features rare Nagano grapes, and a sky matcha chocolate drink made with a rare varity of Okumidori tea. Localized innovations were complemented with standard flavor innovations other such as their limited edition dark chocolate strawberry drink, and macarons in new flavors such as mango-pineapple and pistachio. 

Godiva 

• Belgian luxury chocolate player Godiva's product offering in Japan includes chocolate bars, tablets, boxed chocolates, chocolate squares, truffles, hot chocolate, and dragees along with other chocolate-based desserts and baked goods such as cakes, cookies, beverages, ice cream, and cacao jellies under their flagship Godiva brand and is sub-brands including Ateler de Godiva. The company's retail channels in Japan include their official online store, Godiva stores, Godiva cafés, as well as online stores on marketplace platforms like Rakuten.

• Recent developments: 

  • Riding on sustainability and health trends, Godiva launched two new brands in Japan during the year. Godiva's premium, healthy chocolate bar brand "BIO-VITA" was launched in Japan in 2023 in three varieties namely Apple and Pistachio, Lemon and Almond, and Orange and Almond. Meanwhile, Godiva's sustainbility-focused brand Rosalie was unveiled in Japan in 2023, and Rosalie opened their first Japanese store as well later in the year.

  • New collections launched during the year include "Forest Blessings Cacao Enchantment", and a new collection to commemorate the 55th anniversary of Godiva's Royal Warrant. Meanwhile, Godiva's iconic Gold Collection was refreshed as two collections namely, "Heart of Gold" and "Classic Gold" featuring chocolate truffles with whole hazelnut centers, and center-filled ruby and blonde chocolates.

  • New flavors launched during the year include two new G-Chocolates flavors (namely, hazelnut pistachio, and uji matcha), a new milk waffle chocolate flavor (Milk Waffle Apple Chocolate), and new flavors for seasonal collections such as a new limited-edition Dark Apple Ganache flavor for their 2023 Christmas Collection. 

  • Seasonal chocolate products launches include a Valentine's Day collection (in a few different options including a "Merry Go-Round Waffle Collection", "Fortune Chocolate Collection", and chocolate box based on Nintendo's "Animal Crossing: New Horizons" video game series launched in partnership with Nintendo). Additionally, a "White Black Collection" was rolled out for White Day, collections were launched for Spring/Summer 2023, Summer 2023, and Autumn/Winter 2023, and an exclusive Halloween gift box collection was launched in partnership with Japanese entertainment company Sanrio featuring designs inspired by their popular character Cinnamaroll. Additionally, Atelier de Godiva unveiled limited edition Halloween-themed chocolate tablets alongside a collection of Halloween-themed chocolate figurines and crafts. A Mickey Mouse Collection was launched to celebrate Mickey Mouse's Birthday on November 18. For the holiday season, Godiva launched a Holiday 2023 collection named "Christmas in the Starry Forest" and a 2023 Christmas Collection. A 7-day Christmas countdown calendar was also rolled out. 

  • Godiva continues to rely heavily on chocolate dessert launches and promotions to draw customers and drive consumer purchases (over 50% of 2023 social media postings were related to desserts, beverages and snacks while less than 50% were related to chocolate). Chocolate desserts and snacks launched during the year include chocolate breads, tarts, puddings, cacao fruit jellies, potato chips chocolates, brownies, limited edition ice cream flavors for summer, and numerous flavors for chocolate beverages including cheese cake, strawberry shortcake, and white chocolate with mixed fruits among others. Godiva's localization strategy was evident in innovations such as traditional Japanese desserts being re-imagined with chocolate, and chocolate desserts and beverages featuring Japanese-inspired flavors. Notable innovations during the year include the first-ever chocolate daifuku featuring specialty fruit from various perfectures in Japan, a spring chocolate beverage with Japanese-inspired flavors such as peach petals and leaves, chocolate beverages made with ingredients sourced from various perfectures, yokan in two Japanese-inspired flavors (namely chocolate & red bean paste, and cacao fruit & white bean paste) and chocolate matcha cake among many others. Seasonal dessert launches include limited edition desserts including cakes, tarts, crepes and beverages for Valentine's Day, White Day, and Christmas.

  • Convenience store chain FamilyMart's Godiva's chocolate frappe was re-introduced in response to popular demand. The new version was tweaked to improve on taste with Belgian chocolate chips and crushed almonds added for texture. 

  • Godiva opened a Godiva Bakery in August 2023, its first in the world. The outlet, located in Tokyo, offers baked goods such as pastries and breads with a chocolate twist. 

• Future plans:

  • Godiva plans to offer their Animal Crossing-themed chocolate line again for Valentine's Day in 2024.