Japan: an Attractive Market Says New Report

A new ProWine report by Professor Simone Loose of Geisenheim University has found that exporters see Japan as a key market, thanks to its appreciation for quality and readiness to pay premium prices. 

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Potential for white, followed by sparkling and red. Rosé is still seen as more of a niche product, along with natural and no-lo (Photo: AI generated, DALL-E)
Potential for white, followed by sparkling and red. Rosé is still seen as more of a niche product, along with natural and no-lo (Photo: AI generated, DALL-E)

The report was published by Messe Düsseldorf, organisers of Pro Wine after its first exhibition in Tokyo, in April. It was based on the results of a survey of 400 companies that already export to Japan or are planning to do so.

Seven out of ten respondents particularly appreciated the high average price levels in Japan.

A lightly smaller 60% see very good sales opportunities for their range there. However, there is an understanding that it may take time to build this market. After a sharp rise in imports after the pandemic, there was a downturn during the economic crisis of 2023 – though this was less marked than in North America. Only 40% expect sales to rise in the short term, with half the respondents thinking they will remain stable. Only 12% of current exporters foresee a decline.

Events

The first ProWine Tokyo took place with nearly 200 exhibitors from 20 regions. Germany's leading wine competition MUNDUS VINI, organised by Meininger Verlag, took some of its winning wines to Japan.

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Successful product trends in Japan

Which types of wine have the best chance of being sold in Japan? Exporters expect the strongest demand in Japan for white wines, that go well with Japanese cuisine. Red wines are in second place, followed by sparkling wines. They also see opportunities for high-quality sweet wines such as ice wine, port and Madeira.

Japan stands apart from the global trend towards sparkling and rosé as well as the no-lo sector which will be covered in a special ProWein Business Report to be published this year. Japan remains a very good market for red wines, especially for premium red wines.

Participants in the survey were based in Italy, Spain, France and the New World, followed by Germany, Portugal and Austria. Despite the differences in wine styles, the repondents are in complete agreement on the relative order of the types of wine that have the greatest chances of success in Japan - with a few minor differences. For example, almost 80% of exporters from Austria and Germany see white wines leading in Japan, while the figure for the other wine-growing countries is closer to 60%.

Success factors for xporting to Japan (Source: ProWein, Geisenheim University)
Success factors for xporting to Japan (Source: ProWein, Geisenheim University)

Success factors

The Japanese wine market presents exporters with various opportunities. From the perspective of exporters already active in the market, establishing a long-term relationship with a renowned importer and complying with the very high quality standards are significantly more important than the characteristics of the wine to be sold in Japan.

Origin, flavour, quality and brand awareness are therefore less important than working with a respected and reputable importer who is committed to the wines.

The first challenge is to find the right import partner and to be patient to build and strengthen this relationship."

"In Japan, you need an importer with a good distribution network that focuses on your own product." "The first challenge is to find the right import partner and to be patient to build and strengthen this relationship." The strong competition for the attention of the most successful importers and agents in Japan is the biggest barrier to market entry according to the experts surveyed. In the experience of the already successful exporters, the market cannot absorb an unlimited number of new producers and new wines due to these existing established trade networks in the country.

Challenges exporting to Japan (Source: ProWein, Geisenheim University)
Challenges exporting to Japan (Source: ProWein, Geisenheim University)

Challenges for wine exports to Japan

From the perspective of companies wishing to export to Japan, the search for such an importer is by far the greatest challenge.

However, successful exporters to Japan also report a cultural divide that needs to be overcome and goes far beyond a foreign language. "Japanese culture and gastronomy are very specific, as is the relationship to time and hierarchy. Consumers and importers are very demanding and pay attention to criteria that may seem like annoying trivialities."

Companies that want to export to Japan initially seem to underestimate these high quality standards. Only one in four companies that want to export to Japan sees these standards as a challenge. Unlike the one in three companies that already have experience of doing business in Japan.

On the other hand, the Japanese language as well as the required documentation and chemical analyses are seen less often as a hurdle by experienced exporters than by companies wishing to export to Japan.

Insights

Wine sales in the US market fell slightly in 2023. According to NIQ, there are fundamental shifts underway in the beverage alcohol market. Felicity Carter reports.

Reading time: 6m

 

 

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