Heinz W. Kuhlmann
Representative of NürnbergMesse in Japan
The demand for natural and organic products is growing worldwide, and BioFach is expanding globally with trade fairs and events in five countries. The most recent addition is BioFach China which was held for the first time this year in Shanghai. China has become a major supplier of organic raw materials and other products, but much remains to be done with regard to strict certification and controls.
The growth of organic agriculture and the demand for organic products in Japan are still moderate. Nevertheless, the Japanese market has a big potential, especially if natural non-food products are included. The current total volume of domestic and imported organic products (according to a recent survey conducted by Harvest Research and published in Nihon Keizai Shimbun) has reached about 300 billion Yen. This is an impressive figure, even though it is only about 1% of the total market for conventional food and beverages.
Until now the demand and market for organic products in Japan has been increasing at a slower pace than in Western and some Asian countries. A major obstacle are the comparatively high prices, and this will only change if and when major food companies and retailers go organic and offer a larger variety of organic products. There are already some indications that this will happen in the not too distant future. A major reason and motivation for both producers and consumers is the growing concern about safe food and reliable sources for raw materials.
So far, most large trading companies have shown little interest in organic products, leaving this business niche to smaller and specialized companies. On the other hand, major food companies and retailers are frequently dispatching managers and staff members to Australia, EU countries, the U.S.A. and elsewhere to gather information about traceability and organic products. Much money is spent on such investigations and resulting systems, partly subsidized by the government. Traceability is a major trend in the food industry to ensure consumers of food safety. However, since it is not able to make direct appeals to quality improvements, the level of recognition among consumers is still low. Even business people and consumers who understand the purpose of traceability often do not know that all organic products are not only traceable but also offer higher quality!
Like elsewhere, Japanese consumers are concerned about food safety, and the government values a high ratio of self-sufficiency. Now that the self-sufficiency ratio has fallen below 40%, the central and local governments are looking for ways to boost the ratio. Increasing the yield by using even more agrochemicals is certainly not an acceptable solution and would cause further hazard to food safety. A better way is to encourage consumers to buy more domestically grown and produced goods which are used in traditional healthy Japanese food. This in turn leads to natural and organic products. Revitalizing domestic agriculture is an urgent national priority. Promoting full-fledged organic agriculture which provides safe, healthy and quality foods that secure a stable income for producers and sustainable food production should be the responsibility of Japanese agriculture.Nevertheless, Japan will always depend on a large share of imported food and must avoid international critic and problems resulting from unreasonable restrictions in food imports.
BioFach Japan and its partner event Natural Expo present a large variety of natural and certified organic food. Most exhibits at Natural Expo are traditional Japanese products while at BFJ imported raw materials and processed food are still dominating.
A major reason for the current stagnation of the organic market in Japan is the general lack of awareness about organic products among Japanese consumers. Even six years after its introduction Organic JAS is not well and widely known. Furthermore, there are some problems with certifying bodies which have been addressed by the Ministry of Agriculture, Forestry and Fisheries (MAFF). The scope of products which can carry the Organic JAS label has been widened and now also includes organic livestock products and animal feed.
The revised JAS Law took effect from 1 March 2006. Coupled with the revision of the Organic JAS standard in 2005, the revisions introduce new changes to the organic JAS certification standards and production management. Major changes are as follows:1. Responsibility and authority of Registered Certifying bodies (RCs) 2. Registration of Foreign Certifying bodies (RFCs)
3. Obligation of certified parties
Several divisions and sections within MAFF and associated outside organizations are dealing with food safety, organic products and related subjects.
The government has approved a budget to conduct an extensive survey about the organic production and market in Japan (which will probably also include natural products).
The initiative of Marutei Tsurunen (a native of Finland with Japanese citizenship who was recently re-elected to the House of Councilors) is also bearing fruit. The parliamentary committee which he chairs has grown to over 100 members and is very active in the promotion and support of organic farming and products.Some organic products which can be certified in other countries are not yet covered by Organic JAS. Among them are, for example, fish and marine products and many so-called “organic wild collection”. Organic wine, sake and other alcoholic beverages cannot carry the label “Organic JAS” for tax reasons, even though the ingredients, such as rice or grapes, can be certified.
The EU has recently published guidelines for organic or eco wine as orientation for consumers.
At the Wine Pavilion at BFJ 2007 visitors can see and taste over 200 organic wines from several European countries. BioFach Nuremberg, held from 21-24 February 2008 will put organic wine in the limelight, and trade visitors can experience the world’s biggest organic wine exhibition.
Natural Non-Food Products
In Japan most consumers think about organic products — even if they can clearly distinguish between natural and organic — mainly in terms of food and beverages. However, there are many other natural products, such as cosmetics and body care products, remedies and supplements, detergents and cleaning agents, textiles, building materials, furniture, paper and toys, which all contribute to a natural and healthy lifestyle. Many of these products cannot be certified in the same way as food, but they must meet strict criteria to be admitted to BioFach and Vivaness.
Natural Cosmetics & Wellness ProductsThe demand for natural cosmetics is on the rise globally and Japan is not an exception.
In February 2007 Vivaness, a new trade fair for Natural Personal Care and Wellness took place for the first time as an independent event parallel to BioFach in Nuremberg. Well over 200 suppliers of high-quality natural body care, cosmetics and wellness products presented a wide range of products in a separate hall.
Natural body care and cosmetics fit perfectly in-to the prevailing lifestyle based on wellness, relaxation and beauty. Numerous food and environmental scandals play their part, so that more and more people become interested in ecologically produced products.
The admission criteria for BioFach also incorporate the guidelines issued by the Natural Cosmetics Working Group of the BDIH (Association of German Industrial and Trading Companies) in 1999. The “Certified Natural Cosmetics” quality seal introduced by BDIH in 2001 means that the consumer can rely on a high standard, regular control and safe ingredients. Around 60 companies currently use this label for more than 2500 certified products.
France, Italy, Australia, the USA and other countries have developed similar strict standards for natural care products.
Guidelines and Transparency for Consumers
During the collection and production of raw materials, nature is to be disturbed as little as possible. Particular care to protect endangered species is mandatory. Genetic manipulation and modification are not permitted. The transformation of raw materials into cosmetics is to be accomplished with care and with minimal chemical processes.Renewable and biodegradable materials are preferred because their ecological impact is substantially lower, especially when they come from controlled biological resources.
Natural ingredients are substances that have been used and studied for ages, so there is a minimal toxicity potential. Natural products most easily fulfill the requirement of accountability and socially responsible production.The choice of technical production methods is limited. Some modern technical methods are necessary, especially when the user’s expectations for purity and performance cannot be met by raw materials in their natural state. Environment-friendly production methods, renewable and biodegradable materials and minimal use of packaging are expected.
The following guidelines define the concept of natural cosmetics in a sensible and clear manner, with the consumer’s expectations of safe and ecologically sound products in mind.
1. Raw materials obtained from plants should be used from controlled biological cultivation and/or wild collections.
2. No animal testing may be performed or commissioned when end products are manufactured, developed or tested.
3. Raw materials obtained from minerals and inorganic salts are generally permitted, except substances listed under item 5.
4. Raw material with restricted use, such as fats, oils, waxes, lecithins, lanolin and others.
5. Rejection of organic-synthetic dyes and fragrances, silicones, paraffin and other petroleum products.
6. Preservation by means of certain nature-identical substances in addition to natural preservatives is permitted.
The actual raw material use is regulated by the positive list for development and production of certified natural cosmetics.
The criterion which determines which aromatic substances are permitted is ISO 9235
7. Radioactive radiation to disinfect organic raw materials or finished cosmetic products is forbidden.
8. Certified Natural Cosmetics are checked and approved by a neutral control body.
● Traceable production
Traceable production using clear processes.
● Disapproval of genetic engineering
Genetic engineering is actively rejected and biological cultivation is supported.
● Ecological compatibility
Only natural sources of raw materials, if possible with organic certification.
Environmentally-friendly manufacturing pro-cesses, optimal degradability and recyclable packaging.
● Social compatibility
Raw materials from fair trading and Third World projects.
Natural personal care is a dynamic niche market which has grown continuously for years in Europe, America, Australia and Asia. The demand for natural cosmetics is on the rise globally and Japan is not an exception. This can also be seen at BioFach Japan where this segment is growing every year. In the beginning BFJ had mainly natural cosmetics from Germany which is a leading country in this area. Germany is again strongly presented at BFJ 2007, but there are also more exhibitors from several other countries.
Strong Growth for Organic Cotton
Many consumers perceive cotton as a “natural fiber” and are not aware that huge amounts of chemical fertilizers are used on cotton fields which not only results in inferior products but also causes much damage to the environment. In recent years various studies and consumer movements, such as LOHAS, have revealed these facts and the demand for real natural and certified organic cotton has increased.
Furthermore, many small, medium and large companies have established a “green policy” and offer more natural, organic and environment-friendly products. A typical example is the Swedish company Hennes & Mauritz, Europe’s second largest textile retailer. H & M started using organic cotton in 2004 for baby and children garments from Turkey (currently the largest supplier of organic cotton). At that time they used only about 5 tons of organic cotton which was increased to 50 tons in 2005, surpassed 100 tons in 2006 and has reached 160 tons in August 2007.
The global production of organic cotton has increased by 62% and amounts now to about 50,000 metric tons. Most of it is used for baby and children wear, towels and bathrobes but increasingly also for other clothes.
In Japan there is also a strong demand for organic cotton, even though these products are considerably more expensive than those made of conventional cotton. Parents are concerned about allergies of their children which can be caused by cheap conventional cotton, chemical detergents and body care products. Foreign and Japanese companies are benefitting from this trend and can anticipate a growing business. This is also reflected by a growing number of exhibitors at all BioFach events, including BFJ 2007.
Spas and Wellness Hotels
Several European countries are famous for their traditional spas focusing on medical treatment which is often paid by the health insurance. Asian spas and their more relaxation and wellness orientated treatment methods have also become very popular among Western and Japanese people. Nowadays Asian spas with traditional treatments from India, Indonesia and Thailand can be found in many Japanese cities and resort hotels and in the future probably as an addition to traditional Japanese spas (onsen).
More and more wellness hotels and day spas offer treatment with natural personal care and so do justice to the need for integrated treatment concepts. The high quality of natural personal care matches the lifestyle of a growing worldwide target group, for which aspects like health and sustainability are also important. No wonder that the entire wellness and cosmetics industry is watching this growing market.
BioFach is also following this trend and at future events there will be more exhibitors of spas and wellness hotels presenting their facilities, products and services.
LOHAS buyers are willing and usually can afford to pay more for quality, and also for products from developing countries which are offered by FairTrade organizations. The international fair trade criteria cover basic ecological aspects for all products. Organic cultivation is specifically encouraged, even though not required, by an additional price mark-up. This gives producers an incentive for conversion, and the share of organic products in the TransFair range is growing continuously. FairTrade and BioFach have much in common, and there is a close cooperation. Some of these products, for example coffee, tea, chocolate, organic cotton and product from wild collection are also exhibited at BioFach.
Fairtrade labelling (usually simply Fairtrade or Fair Trade Certified in the US) is a certification system designed to allow consumers to identify goods which meet agreed standards. Overseen by a standard-setting body (FLO-CERT), the system involves independent auditing of producers and traders to ensure the agreed standards are mets.
For a product to carry either the International Fairtrade Certification Mark or the Fair Trade Certified Mark, it must come from FLO-CERT inspected and certified producer organizations.
FLO is the worldwide FairTrade standard setting and certification organization. It offers opportunities for more than one million producers, workers and their families in over 50 developing countries to benefit from labeled FairTrade.
Fair Trade Certified Mark
The Fair Trade Certified Mark is a certification mark used in Canada and the United States. It appears on products as an independent guarantee that disadvantaged producers in the developing world are getting a better deal. The Fair Trade Certified Mark is the North American equivalent of the International Fairtrade Certification Mark used in 17 countries in Europe, Asia, Australia and New Zealand.
The LOHAS (Lifestyles of Health and Sustainability) movement which started in the United States has now also spread to Europe and Japan. The LOHAS movement is loosely organized in numerous chapter and groups. Therefore, it is quite difficult to estimate the actual number of people associated with LOHAS and to obtain information about their goals and activities.
According to several surveys well over 30% of Japanese adults recognize the word and are probably LOHAS consumers. In Japan there are many LOHAS groups, clubs and publications.
LOHAS companies practice responsible capital and services using economic practices. LOHAS business owners and industries around the world meet at LOHAS conferences and events to observe trends and share ideas. LOHAS consumers are interested in and buy various products matching the concept of this movement.
LOHAS market sectors are: sustainable economy, healthy lifestyles, alternative healthcare, personal development and ecological lifestyles. In combination these sectors attract a large number of consumers and generate a big business volume.The LOHAS boom in Japan also increases the awareness and benefits of natural and organic products among consumers and provides good business opportunities. Organic and natural products make up a large portion of the LOHAS market. LOHAS people are mainstream consumers and often have substantial influence in their companies, groups and neighborhood.
Traditional Japanese values, such as profound respect for nature, traditions and craftmanship, coupled with their high-quality food and health-concious orientation, all match with LOHAS values and therefore present a promising breeding ground for further market growth.
Conclusions and OutlookJapanese people have a strong interest and long tradition in consuming natural, healthy and nowadays in particular “safe” food. Therefore, there is a potentially huge market for such products.
However, as pointed out in this article, the awareness for certified organic products is still rather low and the prices of most organic products are too high.
The Nihon Nogyo Shimbun (Agricultural Newspaper, circulation about 300,000) reported on September 7 that MAFF has decided to increase its budget for the support of organic agriculture from the current 50 million Yen to 500 million Yen in 2008. This is certainly good news for struggling organic farmers.In Japan most consumers think about organic products — even if they can clearly distinguish between natural and organic — mainly in terms of food and beverages. However, there are many other natural products, such as cosmetics and body care products, remedies and supplements.
The demand for these products is continuously growing and offers good business opportunities.
Natural cosmetics are definitely the leader in this segment, followed by body care and wellness products and organic cotton. Japanese and foreign manufacturers and distributors are well aware of this trend, and consequently the number of exhibitors presenting such products at BioFach Japan is larger than in previous years.
The above products cannot be certified like organic food and beverages, but they must meet strict admission criteria. The admission criteria for BioFach also incorporate the guidelines issued by the Natural Cosmetics Working Group of the BDIH (Association of German Industrial and Trading Companies) and products carry the “Certified Natural Cosmetics” quality seal introduced by BDIH in 2001.
In Japan there is also a strong demand for organic cotton, even though these products are considerably more expensive than those made of conventional cotton. Parents are concerned about allergies of their children which can be caused by cheap conventional cotton, chemical detergents and body care products. Foreign and Japanese companies are benefitting from this trend and can anticipate a growing business.
More and more wellness hotels and day spas offer treatment with natural personal care and so do justice to the need for integrated treatment concepts. BioFach is also following this trend and at future events there will be more exhibitors of spas and wellness hotels presenting their facilities, products and services.
The LOHAS (Lifestyles of Health and Sustainability) boom in Japan also increases the awareness and benefits of natural and organic products among consumers and provides good business opportunities. Organic and natural products make up a large portion of the LOHAS market. LOHAS people are mainstream consumers and often have substantial influence in their companies, groups and neighborhood. Traditional Japanese values, such as profound respect for nature, traditions and craftmanship, coupled with their high-quality food and health-conscious orientation, all match with LOHAS values and therefore present a promising breeding ground for further market growth.
LOHAS buyers are willing and usually can afford to pay more for quality, and also for products from developing countries which are offered by FairTrade organizations. The international fair trade criteria cover basic ecological aspects for all products. Organic cultivation is specifically encouraged, even though not required, by an additional price mark-up. This gives producers an incentive for conversion, and the share of organic products in the TransFair range is growing continuously. FairTrade and BioFach have much in common, and there is a close cooperation.