The Japanese LOHAS market — Opportunities revealed for organic businesses | GON

Akiko Fukushi and Peter Schumacher

BioFach Organic Expo Secretariat

Overview

In line with the growing LOHAS (Lifestyles of Health and Sustainability) movement in the US and Europe, the Japanese are quickly going LOHAS, mirroring the vast market potential for LOHAS businesses in Japan and beyond. Marking the ‛LOHAS gannen’ or the ‛break year of LOHAS’, LOHAS-friendly products and service sales are booming. Businesses related to organic foods, alternative health and personal care, macrobiotic diet, yoga, hybrid cars, green-buildings and eco-tourism are catching speed with total sales approaching USD 18 billion for 2005. Industry experts predict a USD 180 billion market within the next ten years. Though still a fraction compared to the USD 320 billion US market, clearly, the Japanese market is catching up, and catching up fast. So who are the Japanese LOHAS consumers? What do recent trends say about the market potential in the years to come? What does the LOHAS trend in Japan mean for the organic industry?

29% LOHAS

According to a recent study, 29% of the adult population in Japan were identified as LOHAS consumers. The first study of its kind to be conducted in Japan, the results portrayed as expected, a distinctive consumer base with a 50-50 gender split, even spread throughout each age group (20-30% among each 20s-50s generation) , a rather high percentage of 60+ generation (40%), high education (college graduate: 56% plus), and high income (annual income over USD 55K: 47%).

Consumer character

As consumers, the LOHAS Japanese were identified as above average shoppers that are highly trend conscious and selective, prizing functionality and design. They are information savvy therefore researches meticulously and often pay attention to what’s going on in the world as a whole. Brand image-oriented, their key purchase drivers are corporate philosophy, CSR as well as social and environmental impact of their purchases. Replacing the previous ‛eco-friendly’ consumers, perceived as the eccentric few, the ‛eco and ego’ combined LOHAS consumers are mainstream and ‘hip’. Often opinion leaders, their influence coupled with their willingness to pay a premium for LOHAS products have established them as potential market leaders. Moreover, the LOHAS Japanese was found to have particular interest in the healthy lifestyle segment of the LOHAS market, specifically, in organic and natural food, nutritional products, dietary supplements and personal care items. Organic and natural businesses should take note.

Recent trends

Lawson, a popular Japanese convenience store recently opened its twenty-sixth Natural Lawson shop since opening in 2001. Branded as the ‘eco-friendly convenience store’, they cater to the hip, health and eco-conscious with pre-prepared organic deli foods, fresh organic produce, natural cosmetics and personal care items. While not all products are organic and quality standards are not yet clearly established, most items are marked with ‘natural’, ‘reduced/non-agrichemicals’, ‘biodegradable’ and ‘recyclable’ with clear nutritional and production traceable labels At lunchtime, trendy businessmen and women form lengthy lines to buy organic brown rice lunch boxes topped off with a cup of fresh fair trade organic coffee. The stores are used as educational spaces posting organic food and environmental issues related panels, proactively educating shoppers. To accommodate the growing demand, Lawson plans to triple its stores by early next year. Lawson is not an exception. Natural retail shops as well as organic restaurants, cafes and bars with a LOHAS-twist are opening doors all over Japan, becoming the place to dine and unwind for the trendy bunch.

The macrobiotic diet is also a symbolic trend. A traditional, highly health conscious diet emphasizing quality organic whole grains, vegetables and soy products is making a come back and decorating covers of trendy culinary magazines. Young women in their 20s and 30s are flocking to macrobiotic cooking classes and restaurants. Being health conscious, selective of food preference, while prizing the quality of food is considered modern and chic.

Hybrid cars like Toyota Prius are also growing strong in Japan. The old Prius was once regarded as somewhat un-hip, exclusive for rigid green consumers. The new Prius is à la mode. With its new functional synergy-drive and slick design, it is quickly becoming a magnet for the trendy Japanese car lovers.

Business opportunities revealed

So what’s in it for organic and natural businesses? Can we expect a stable growth in consumer demand parallel to the LOHAS boom? Or will it altogether phase out merely a fad? There are three key reasons to believe the LOHAS boom in Japan is here to stay and promises optimistic future growth for organic businesses. First, organic and natural products make up a large portion of the LOHAS market’s healthy lifestyle sector. Particularly in Japan, it is the total market’s core growth category. It is also a key entry point for new LOHAS consumers. Secondly, the LOHAS Japanese are mainstream consumers and often with leading opinions, they have enormous potential to influence and galvanize the non-LOHAS consumer base. This together with proactive outreach by the organic business marketers to relate to the average consumers, enormous market growth can be expected in years to come. Thirdly, the underlying values of the Japanese in general, i.e. profound respect for nature, tradition, and craftsmanship, coupled with their high-quality food and health conscious orientations, all overlap with LOHAS values and therefore presents promising breeding ground for further market growth.

Five LOHAS market segments

Sustainable Economy

● Green building and industrial goods
● Renewable energy
● Resource-efficient products
● Socially responsible investing
● Alternative transportation

● Environmental management

Alternative Healthcare

● Health and wellness
● Acupuncture, homeopathy
● Holistic disease prevention

● Complementary medicine

Ecological Lifestyles

● Ecological home and office products
● Organic / recycled fiber products
● Environmentally friendly appliances

● Eco-tourism and travel

Healthy Lifestyles

● Natural, organics; nutritional products
● Food and beverage
● Dietary supplements

● Natural personal care products

Personal Development

● Mind, body and spirit products: CDs, books, tapes, seminars, Yoga, fitness, weight loss

● Spiritual