It is almost a month since one of the world's worst disasters struck Japan. As the country endeavours to work through the challenges ahead, it is an opportunity for those of us around the world to learn and to lend a hand as we are able. Japan is a dynamic country steeped in culture and history. It is one of Canada's top trading partners and as such has a significant impact on our Food and Beverage Industry.
On March 11th, 2011, the world watched in disbelief as Newscasters around the globe shared images of the havoc and destruction that started with an earthquake reaching 8.9 on the Richter Scale, followed quickly by a tsunami of monumental proportions, leaving behind a mess of broken and battered homes and businesses, vessels and vehicles and land everywhere mired in mud and salt residue. Compounding the catastrophe was the subsequent deterioration of nearby nuclear reactors leaking radiation into the atmosphere contaminating both food and water supplies.
Although half a world away, the impact of this disaster reaches far beyond the borders of Japan. It has made an impact on countries, governments, businesses, on manufacturers and growers, etc., reaching out inevitably to you and I in countless different ways and on countless different levels. Perhaps, it enables us to strategize and contemplate how we manage risk - what the impact will be on our business, on our people, on our product, on supply and demand, on our future. It may challenge us with an opportunity to enhance our own safety and environmental programs whether on the Government's larger scale issues relating to nuclear regulations or within the day to day activities in our very own facilities that impact the community around us. As individuals, it should prompt us to appreciate the depth and breadth of our country's capabilities and resources, to learn about others and their environments and to do what we can to assist those in need.
In that spirit of learning about others, their resources, and industry etc. at large, our Blog this week focuses on Japan and in particular the Food and Beverage Sector.
Japan is one of Canada's top trading partners and has a significant impact on our Food and Beverage industry. In 2009, the Japanese food processing industry was valued at US $251 billion according to a USDA Foreign Agricultural Service Gain Report published in the Fall of 2010. Long recognized as a major economic power, Japan, is the fourth largest importer and exporter in the world. From a food and beverage standpoint, they are the world's third largest importer of agri-food and seafood products. Canada itself ranks second for agri-food products after the United States.
A mere 10,229 kms - a 14 hour plane ride - is all that separates us from the Islands of Japan. Steeped in history and culture is a country dotted by forests and volcanic mountain ranges, and coastlines that are difficult to navigate. Approximately 12% of the island has arable land, with 10.5 million acres of cropland. Japan sits directly above one of the world's most active fault lines making tremors nothing out of the ordinary. A country slightly smaller than California at 377,744 sq kms or Germany at 357,021 sq kms, completely surrounded by 29,751 kms of coastline.
It is one of the most densely populated countries in the world living for the most part on 27% of the island with close to 127 million - 336 people per sq km. In deep contrast, Canada has almost 38 million people sprawled across 9.9 million sq kms - 3.5 inhabitants per sq km. In 2009 California's population was only 37 million and Germany's close to 82.
Japan, unfortunately, is also the world's fastest aging society. In 2005, 20.1% of the Japanese population was 65 years old and over and by 2015, that number is expected to grow to 25%. - Agri-Food Past, Present & Future Report, Japan, January 2010
The lack of working land, a huge population base, high production costs and labour shortages feeds the need for importing food and food products from around the world and as such, imports currently meet close to 60% of food requirements. - Ontario Food Exports Division, OMAFRA
Top Exports from Canada in 2009 included seafood such as shrimps and prawns, herring roe, snow crabs, and sablefish as well as agri-food fresh and frozen pork products, canola seeds, soybeans and non-durum wheat. Bringing some balance to trade, top 2009 food imports from Japan were reported as: sesame oil, sauces and preparations, green tea, bread, pastry cakes and biscuits. - Ontario Food Exports Division, OMAFRA
USDA findings published in the Gain Report determined that there are 15 major companies dominating the Food and Beverage industry in Japan making up almost 50% of the market sales in 2009.
Japan Food Processing Industry 2009
(Figures are value based)
16.0 % - Soft Drinks, Juices & Water
15.6 % - Alcoholic Beverages
10.4% - Confectionary
10.1% - Wheat Flour
8.9% - Dairy
8.2% - Fats and Oils
7.2% - Other Processed Farm Products
4.2% - Health Foods
4.2% - Tea, Coffee, & Cocoa
3.6% - Other Marine Products
3.1% - Processed Meats
2.9% - Frozen Foods
1.8% - Sugars
1.4% - Fish Paste
1.4% - Retort
1.0% - Canned & Bottled Foods
Source: Shurui Shokuhin Tokei Geppo, January 2010
USDA Foreign Agricultural Service, Gain Report, 11/19/10
Supermarkets account for 37.4 percent of the food retail sector revenue incorporating everything from large stores to consumer co-operatives.
Japanese farms are very small and employ between 4-5% of the labour force. Almost 60% of the farms sell to co-operatives. Despite its limited land and resources, this is a country that has provided well for itself in the past but the impact of an aging population and land use policies have resulted in self-sufficiency rates of 70% in the 1960's to 40% today. - Agri-Food Past, Present & Future Report, Japan, January 2010
Statistics from 2008 by the US Ministry of Agriculture, Food & Fisheries indicated self-sufficiency rates as follows:
|96% - Eggs||70% - Milk and Dairy Products||26% - Feed Grains|
|95% - Rice||56% - Meats||14% - Wheat|
|80% - Vegetables||41% - Fruits||5% - Soybeans|
It is this self-sufficiency that Ross Korves points out in his article on "The Japanese Earthquake and Agriculture Trade" (www.farms.com - March 17th, 2011) that could have some difficulty with shortages or getting food to market. Since that article was published, contamination from the radiation leaks has definitely had an impact on the land, the crops and the labourers. As plutonium levels have risen and radiation has made its way into the seawaters surrounding the reactors, the impact is just enormous. Adding to that the previous challenges left from the tsunami with mud and salt, some farmers may have to wait several years to bring the soil back to planting conditions - making safe food imports that much more essential.
Given the relationship Canada has had with Japan from exports in the past, it would seem that our trade should strengthen as we endeavour to assist Japan in its efforts to rebuild. Beyond those emergency needs of today though, and in light of limited land availability and an aging workforce, there are no doubt some opportunities for those interested in exporting to this interesting and dynamic country. If you would like to learn more in that regard, please contact the Ontario Food Exports office of the Business Development Branch of OMAFRA for further information. Additional sector aspects of the Food and Beverage Industry may be found in the following Japanese Association links:
Ministry of Agriculture, Forestry and Fisheries - www.maff.go.jp
Ministry of Economic, Trade and Industry - www.meti.go.jp
Japan Customs - www.customs.go.jp
JETRO (Japan External Trade Organisation) - www.jetro.go.jp
Agriculture & Livestock Industries Corporation - www.alic.lin.go.jp
Japan Fish Traders Association - www.jfta-or.jp
Japan Imported Cheese Promotion Association - www.jic.gr.jp
Japan Dairy Industry Association - www.jdia.or.jp
The Japan Soft Drinks Association - www.j-sda.or.jp
The Mineralwater Association of Japan - www.minekyo.jp
Japan Frozen Food Association - www.reishokukyo.or.jp
Japan Fresh Produce Import and Safety Association - www.fruits-nisseikyo.or.jp
Japan Health Food & Nutrition Food Association - www.jhnfa.org
Japan Food Additives Association - www.jafa.gr.jp
Agri-Food, Past, Present & Future Report, Japan, Agri-Food Trade Service, January 2010
Canadian Export to Japan, Consumers and Consumption Patterns, Opportunities, etc. - http://www.ats-sea.agr.gc.ca/asi/4202-eng.htm
Gain Report, USDA Foreign Agricultural Service, 11/19/10
The triple affect of the earthquake, the tsunami and the radiation leaks have no doubt left the country in a perilous state and neighbouring countries are now also experiencing contamination issues. As a result, importers around the world are putting stricter controls in place and consumer confidence is waning as we carefully question the safety of the foods we are purchasing regardless of where we may live.
With my own roots buried deep in agriculture, and raised ironically enough minutes away from a nuclear power plant, I watched with interest as the National interviewed a Spinach Farmer standing in the midst of what appeared to be a healthy, thriving crop now affected by the radiation leak. The despair of the farmer was evident and his frustration and sense of helplessness certainly left an impact on me - 10,229 kms away - as I contemplated the multiple areas in which this one representative crop would have on that Spinach farmer, his community, the markets that he supplies, his ability to eventually regain consumer confidence or use of his land, the agriculture sector and the safety of food and beverage products around the world, etc.
There is a great deal to be done as Japan endeavours to recover from one of the world's worst natural disasters...
In light of the shortage of both safe food and water supplies, please take a moment to check out the following websites should you wish to assist aid efforts in that regard:
Second Harvest Japan:
World's Supply Chain for Humanitarian Relief:
On behalf of all of us at EMC Canada, our most heartfelt and ongoing thoughts of support are with the people of Japan.