Japan's confectionery market continues to post steady retail growth, but production volumes have been declining for consecutive years. Rising prices and cost pressures are reducing purchasing volumes, signaling a structural shift toward a "high price, low volume" market.

TOKYO, JAPAN (MERXWIRE) - Japan's confectionery products-including sweets, biscuits, and souvenir snacks-remain highly popular among both domestic and international consumers. However, behind the apparent market strength, structural weakness is emerging. According to the "2025 Confectionery Production and Market Outlook Report" released by the All Nippo Kashi Association, both market value and retail sales are expected to extend their growth for a fifth consecutive year in 2025. In contrast, total production volume has declined for a second consecutive year, indicating weakening physical demand.

The report shows that Japan's corporate goods price index rose 3.2% year-on-year to 126.7 (2020 average = 100), marking the fifth straight year of increase. The consumer price index excluding fresh food also rose 3.1% to 111.2, reaching a recent high.

Driven by rising raw material, logistics, and labor costs, confectionery prices increased by an average of 8.9%. Chocolate prices surged sharply by 35.7%, driven largely by record-high cocoa prices, making it the most significantly affected category.

Despite higher retail prices boosting overall market value, household purchasing power has not kept pace. Japan's real wages fell 1.3% in 2025, marking the 12th consecutive month of decline and the fourth straight annual decrease.

Household expenditure data also shows a clear divergence. While nominal spending on confectionery continued to rise from 2021 to 2025, real spending has been in decline since March 2023, indicating that consumers are spending more money but purchasing fewer products.

A Tokyo-based office worker, 35-year-old Ms. Misaki Sato, said price increases are becoming increasingly noticeable. "I used to buy two or three bags of snacks without thinking much about the price, but now chocolate and chips are often much more expensive. I usually choose larger packs or wait for discounts at convenience stores," she said.

The association notes that rising living costs are driving stronger consumer saving behavior, leading to growing polarization in consumption. On one hand, consumers prefer larger, cost-efficient packages; on the other, they are still willing to spend on premium products with health, functional, or limited-edition value.

Across product categories, similar patterns are observed. Categories such as chocolate, gum, Japanese sweets, Western-style sweets, and snack foods recorded lower production volumes in 2025 compared to the previous year. However, due to price adjustments, their total market value and retail sales still increased.

Chocolate remains the most heavily impacted category, as companies respond to sustained cocoa price increases by developing products with reduced cocoa content or partial substitution with plant-based oils.

Beyond domestic demand weakness, supply chain instability is also emerging as a concern. According to reports, Calbee, Inc. has informed suppliers that due to instability in packaging ink and related materials caused by geopolitical tensions in the Middle East, some potato chip products may switch to a simplified black-and-white packaging design to reduce supply risk and costs.

Meanwhile, export demand and tourism continue to support the industry. Japan's confectionery exports rose 6.0% year-on-year to 50.5 billion yen in 2025, a record high. Inbound tourist arrivals also reached approximately 42.68 million, another historical peak.

As inbound tourism grows and average spending per purchase increases, foreign tourists' confectionery consumption in Japan is estimated to reach approximately 470 billion yen in 2025, another record high.

A Taiwanese tourist visiting Japan for the second time this year said that while prices are higher than before, Japanese snacks remain attractive. "With the weaker yen, I still buy a lot of limited-edition biscuits and chocolates. There are so many varieties, and the packaging is very refined-perfect for gifts," she said.

The Consumer Aesthetics and Cultural Tourism Society Japan stated that the industry must go beyond price competition and strengthen cultural and experiential value. It emphasized that foreign tourists purchase Japanese confectionery not only for taste but also for packaging design, seasonal exclusivity, and regional cultural identity. The association recommends integrating confectionery products with local tourism, traditional culture, and food education-such as regional limited products, craft-making experiences, and wagashi cultural workshops-to enhance added value and reduce reliance on price competition.

However, industry observers remain cautious. If raw material, energy, and logistics costs remain elevated into 2026, further price increases are likely. Combined with stagnant real wages, consumer frugality may deepen, raising concerns that Japan's confectionery market will continue to see "rising retail value but shrinking real demand."

Media Contacts:
Consumer Aesthetics and Cultural Tourism Society Japan

PR Agency:
MERXWIRE INC.
Ada Huang
[email protected]

SOURCE: Consumer Aesthetics and Cultural Tourism Society Japan