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Toshikazu FukuiZENOAQ
October 20, 2016
Animal Health in Japan
Content:1. Animals in Japan
2. Animal Health Industry in Japan
3. Key Elements of Success in the Japanese Market
1. Animals in Japan
Cattle Market: DairyNumber of breeding farms and breeding cows:
2009 2010 2011 2012 2013 2014 2015number of breeding farms (x 1000) 23.1 21.9 21.0 20.1 19.4 18.6 17.7
more than 50 cows(x 1000) 7.8 7.3 7.1 7.0 6.9 6.8 6.4
number of breeding cows (x 1000) 1,500 1,484 1,467 1,449 1,423 1,395 1,371
more than 50 cows
(x 1000) 986 983 987 980 944 948 940
number of delivered cow (x 1000) 985 964 933 943 923 893 870
number of delivered cows / farmnationwide 42.6 44.0 44.4 46.9 47.6 48.0 49.1
Hokkaido 62.5 63.6 63.6 68.1 68.1 68.2 68.8
2009 2010 2011 2012 2013 2014 20151,300
1,350
1,400
1,450
1,500
1,550
0.0
5.0
10.0
15.0
20.0
25.0
number of breeding cow (x 1000)number of breeding farm (x 1000)
Number of breeding farms
Number of breeding cows
Cattle Market: Dairy
2009 2010 2011 2012 2013 2014 2015milk production 7,881 7,631 7,534 7,607 7,447 7,331 7,407
regionHokkaido 3,932 3,897 3,894 3,931 3,849 3,820 3,900
other prefectures 3,949 3,734 3,640 3,677 3,598 3,511 3,507
purposemilk 4,219 4,110 4,083 4,011 3,965 3,910 3,953
milk product 3,587 3,451 3,387 3,538 3,426 3,361 3,399
Raw milk production: (Unit: 1000 ton, %)
Raw milk price / kg:
Cattle Market: Dairy
Average of profitability: (Unit: 1000 yen)
2009 2010 2011 2012 2013 2014
gross income / farm 8,983 8,249 8,397 9,151 9,005 11,531
income /milking cow 193.6 175.9 170.7 183.0 178.7 224.3
Number of breeding farms and breeding cattle
2009 2010 2011 2012 2013 2014 2015number of farms (x 1000) 77.3 74.4 69.6 65.2 61.3 57.5 54.4number of cattle (x 1000) 2,923 2,892 2,763 2,723 2,642 2,567 2,489
number of cattle / farm 37.8 38.9 39.7 41.8 43.1 44.6 45.8
2009 2010 2011 2012 2013 2014 20152,200
2,300
2,400
2,500
2,600
2,700
2,800
2,900
3,000
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
number of cattle (x 1000)number of farm (x 1000)
Cattle Market: Beef Cattle
Number of farmsNumber of cattle
Carcass wholesale price: (Unit: Yen / kg)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
200
400
600
800
1000
1200
1400
1600
1800
2000
1,434 1,393 1,2531,175 1115
1270 1181 11711293
15331750
1,247 1,2361,152 1,025 996 1015
737966
1128 1155
1568
highest price / kglowest price / kg
2009 2010 2011 2012 2013 2014
Breeding farms
gross income / farm 404 592 589 746 1,540 2,366
average number of breeding cows /month (head) 11.3 11.9 12.1 12.3 12.6 12.9
income for a breeding cow (x 1000 Yen) 35.8 49.7 48.7 60.6 122.2 183.4
Fatteningfarms
Young castrated cows
gross income / farm -2,256 1,468 -725 147 1,809 4,174
number of cows shipped (head) 33.0 35.3 36.1 38.1 40.1 41.8
income for a fattening cow (x 1000 Yen) -68.4 41.6 20.1 3.9 45.1 99.9
Male dairy cattlegross income / farm -2,082 -3,410 -9,539 -9,054 -7,120 -5,681
number of bulls shipped (head) 101 110.9 126.9 112.2 131.6 138.4
income for a fattening cow (x 1000 Yen) -20.6 -30.8 -75.2 -80.7 -54.1 -41
Profitability of breeding cow farms:
Cattle Market: Beef Cattle
FMD Outbreak in 2010
Swine Market(Unit: 1000 ton)
2009 2010 2011 2012 2013 2014 2015
consumption 1,635 1,660 1,688 1,674 1,673 1,673 1,721
domestic production volume 923 895 894 907 917 875 888
Import volume 692 768 803 760 744 816 826
Export volume (tons) 2,112 519 663 854 1,378 1,453 1,456
Supply and demand:
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
100
200
300
400
500
600
700
532571 580 602
511 538 547 526 545
665650
405408
457
389 388425
373396 444
529465
highest price / kglowest price / kg
Carcass wholesale price: (Unit: Yen / kg)
Swine MarketNumber of farms and pigs:
2009 2011 2012 2013 2014
number of farms (x 1000) 6.9 6.0 5.8 5.6 5.3
more than 2000 fattening pigs (x 1000) 1.0 1.0 1.0 1.0 1.0
number of pigs (x 1000) 9,899 9,768 9,735 9,685 9,537
number of sows (x 1000) 937 902 900 900 885
more than 2000 fattening pigs (x 1000) 6,219 6,492 6,394 6,583 6,528
average number of pigs / farm 1,436.7 1,625.3 1,667.0 1,738.8 1,809.7
average number of sows / farm 158.0 176.5 183.7 194.7 206.4
2009 2011 2012 2013 20149,300
9,400
9,500
9,600
9,700
9,800
9,900
10,000
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
number of pig (x 1000)number of farm (x 1000)
Number of farmsNumber of pigs
Swine Market
Average of profitability: (Unit: Yen / kg)
2009 2010 2011 2012 2013 2014
gross income / farm 3,294 6,345 3,152 1,424 4,785 13,640
number of pigs shipped 1,293.4 1,291.4 1,352.8 1,419.6 1,514.8 1,511.5
average profit per fattening pig (x 1000 Yen) 2.5 4.9 2.3 1.0 3.2 9.0
Poultry Market: Broiler (Unit: 1000 ton)
2009 2010 2011 2012 2013 2014 2015
consumption 2,017 2,087 2,099 2,204 2,195 2,226 2,298
production volume 1,413 1,417 1,378 1,457 1,459 1,494 1,517
Import volume 553 674 763 736 717 759 809
Export volume (tons) 8,699 10,679 4,206 7,048 8,940 10,823 9,031
Supply and demand:
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
100
200
300
400
500
600
700
800
619
667746 749
677707 700
642
710681 690
517 494563 571 564
541
595
519 534 569620
248 234
312369
231279 279
235
284 338 353
217 192 209251
197 200 179 171222
272 263
Leg:highest price / kgLeg:lowest price / kgBreast:highest price / kgBreast:lowest price / kg
wholesale price: (Unit: Yen / kg)
Poultry Market: Broiler (Unit: 1000 ton, %)Supply and demand:
2006 2007 2008 2009 2013 2014number of farms 2,652 2,590 2,583 2,456 2,420 2,380
number of chickens (x 1000) 102,277 103,687 105,287 102,987 131,624 135,747number of shipping farms 3,120 3,065 2,991 2,925 2,440 2,410
more than 500,000 chickens / farm 170 185 194 203 225 230number of chickens shipped 606,898 621,820 622,834 629,766 649,778 652,441
more than 500,000 chickens (x 1000) 195,529 211,470 217,617 225,436 270,778 270,971
average number of chickens / farm (x 1000) 38.6 40.0 40.8 41.9 54.4 57.0
average number of chickens shipped / farm (x 1000) 194.5 202.9 208.2 215.3 266.3 270.7
2006 2007 2008 2009 2013 20140
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2,200
2,250
2,300
2,350
2,400
2,450
2,500
2,550
2,600
2,650
2,700
number of chicken (x 1000)number of farm
Number of chicken Number of farm
Poultry Market: Layer (Unit: 1000 ton)Supply and demand:
2009 2010 2011 2012 2013 2014 2015consumption 2,017 2,087 2,099 2,204 2,195 2,226 2,298
production volume 1,413 1,417 1,378 1,457 1,459 1,494 1,517
import volume 553 674 763 736 717 759 809
export volume (tons) 8,699 10,679 4,206 7,048 8,940 10,823 9,031
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
50
100
150
200
250
181 178
168
190
170
191 181
176
205
209
221
average price / kg
Wholesale price of eggs:
Poultry Market: Layer (Unit: 1000 tons)Supply and demand:
2006 2007 2008 2009 2011 2012 2013 2014
number of farms (x 1000) 3,600 3,460 3,300 3,110 2,930 2,650 2,560 2,440
more than 100,000 hens / farm 352 365 356 350 336 328 324 347
number of hens (x 1000) 136,894 142,765 142,523 139,910 137,352 133,085 133,506 134,569
more than 100,000 hens / farm 82,260 88,453 91,543 91,001 90,083 91,556 93,476 99,395
average number of hens / farm (x 1000) 38.0 41.3 43.2 45.0 46.9 50.2 52.2 55.2
2006 2007 2008 2009 2011 2012 2013 2014128,000
130,000
132,000
134,000
136,000
138,000
140,000
142,000
144,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
number of hen (x 1000)number of farm (x 1000)
Number of hen Number of farm
Companion Animals
2011 2012 2013 2014 2015
(Unit: thousands)Numbers of Dogs and Cats in Japan
1 Toy Poodle
2 Chihuahua
3 Mixed Shiba
4 Shiba
5 Miniature Dachshund
6 Pomeranian
7 Yorkshire Terrier
8 Miniature Schnauzer
9 Shih Tzu
10 Maltese
1 Munchkin
2 Scottish Fold
3 Ragdoll
4 Mainecoon
5 Russian Blue
6 Exotic Shorthair
7 American Shorthair
8 Norwegian Forestcat
9 Somali
10 Bengal
Dog
2016 Top 10 Popular Breeds in Japan
Cat
Companion Animals
Vets in Japan
To be certified as a veterinarian in Japan, one needs to;
Graduate from a veterinary school of medicine (6 years). **16 veterinary colleges in Japan
Pass the national examination to obtain a veterinary license. **Approx. 1,000 candidates pass the exam every year
total 34,548
average age 47.0
maletotal 24,305
average age 49.8
femaletotal 10,243
average age 40.2
Number of veterinarians (as of December 2014)
Number of Animal Clinics in Japan
Hokka
ido
Kagos
hima
Iwate
Fukus
hima
Miyaza
ki
Tochig
iChib
a
Kumam
oto
Ibarak
i
Miyagi
0
100
200
300
400
500
600 517
244
170 156 152 138 135 128 126 120
Tokyo
Kanag
awa
Osaka
Saitam
aAich
iChib
a
Hokka
idoHyo
go
Fukuo
ka
Shizuo
ka0
200
400
600
800
1,000
1,200
1,400
1,600
1,800 1,621
1,028
784 695 644 637
519 515 401 358
Number of production animal clinics Number of companion animal clinics
Total number of animal clinics in Japan15,463
production animal companion animal3,977 11,486
*as of December 2015
Changes in the Number of Companion Animal
Clinics in Japan
0
2,000
4,000
6,000
8,000
10,000
12,000
9,245 9,482 9,729 9,836 10,027 10,135 10,350 10,551 10,741 11,032 11,259
2004 2005 2006 20082007 20112009 2010 20132012 2014
2. Animal Health Industry in Japan
Animal Health Companies in Japan(Unit: Million JPY)Sales turnover
(Unit: Million JPY)Market size
Animal Health Market in Japan
Japan is currently ranked as the 3rd largest animal health market.
2011 2012 2013 2014 20150
20,000
40,000
60,000
80,000
100,000
120,000
PharmaceuticalsPet Food
2011 2012 2013 2014 2015
Pharmaceuticals 105,424103,866105,942109,611105,158
Pet Food 34,440 34,806 37,157 41,709 40,515
Total 139,864138,672143,099151,320145,673
Japanese Animal Health market(excluding Pet Food)
(Unit: Million JPY)
36.6%
20.0%
24.1%
11.1%
2.7%4.3%0.8%0.4%PetBovineSwinePoultryAquacultureEnvironmentalEquineAquarium Fish
Result of 2015
Pet
Bovine
Swine
Poultry
Aquacultu
re
Envir
onmental
Equine
Aquarium Fi
sh0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
20112012201320142015
2011 2012 2013 2014 2015Pets 33,392 33,724 39,683 35,988 41,718
Bovine 22,359 21,521 22,182 21,718 22,779Swine 26,088 26,981 26,548 26,303 27,496Poultry 13,086 12,583 12,182 11,825 12,591
Aquaculture 3,418 3,423 3,173 3,097 3,127Environmental 5,676 4,318 4,490 4,898 4,891
Equine 915 852 934 835 881Aquarium Fish 491 464 445 456 454
Total 105,425 103,866 109,636 105,119 113,936
Number of Animal Drugs Approved in Japan
0
20
40
60
80
100
120
140
116
6673
30
2013 2014 2015 2016**
** April to September 2016
Cattle Market(Unit: Million JPY)
2013 2014 2015
Antibiotics/Antibacterial 5,762 5,636 5,914
Vaccine 3,817 3,970 4,173
Parasiticides 1,161 1,108 1,228
Hormone Drug 2,027 2,002 2,069
Feed Additives 3,619 3,389 3,485
Rumen Medication 695 667 689
Teat Dip/Disinfectant 1,953 1,938 2,055
Anti-inflammatory analgestic 881 908 986
Antidote/Ketosis 747 730 791
Diagnostic drug 538 417 367
Bacteriostatic 561 555 593
Others 422 398 430
Total 22,182 21,718 22,779
26.0%
18.3%
5.4%9.1%
15.3%
3.0%
9.0%
4.3%
3.5%
1.6%
2.6% 1.9%
2015
Antibiotics/AntibacterialVaccineParasiticidesHormone DrugFeed AdditivesRumen MedicationTeat Dip/DisinfectantAnti-inflammatory analgesticAntidote/KetosisDiagnostic drugBacteriostaticOthers
Cattle Marketmain customers;1. farmers2. vets3. cooperatives
【 concerns 】aging of farmersshortage of farm successorsincrease in production costsrisk of introducing infectious diseases by farm scale expansion
【 Needs 】efficacious preventive medicine or treatments for;1. mastitis2. hoof disease3. reproductive disorders4. pneumonia/diarrheafeeding management technology
【 opportunities 】farms tend to be large scale and consolidatedmechanization/automationembryo transfercomplex management of dairy cattle and beef cattledemandhigh lactation cow
Swine Market
2013 2014 2015
Vaccines 13,992 13,706 14,495Antibacterials/
Antibiotics 9,753 9,932 10,198
Parasiticides 1,316 1,224 1,322
Hormonal Drugs 782 752 732
Feed additives 316 312 331
Others 389 378 419
Total 26,548 26,303 27,496
(Unit: Million JPY)
37.1%
52.7%
4.8%
2.7% 1.2% 1.5%
2015
Antibacterial/AntibioticsVaccineParasiticidesHormon DrugsFeed AdditivesOthers
Swine Market【 characteristics 】vaccines and antibiotics dominate the marketproducts are sold to farmers directly
【 concerns 】aging of farmersshortage of farm successorsincrease in production costsrisk of introducing infectious diseases by farm scale expansion
【 needs 】vaccines for infectious diseasefeeding management technology to improve feed efficiencyfunctional materials (substitution for antibiotics)
【 opportunities 】farms tend to be large scale and consolidatedhigh production efficiencylarge litter size
Poultry Market
2013 2014 2015
Vaccines10,332 10,028 10,671
Antibacterials/Antibiotics 1,449 1,418 1,538
Parasiticides 232 222 231Feed additives 170 157 151
Total 12,182 11,825 12,591
(Unit: Million JPY)
12.2%1.8%
84.7%
1.2%
2015
Antibacterial/AntibioticsParasiticidesVaccinesEnrichment
Poultry Market【 characteristics 】vaccines dominate most of the marketproducts are sold to farmers directly
【 concerns 】aging of farmersshortage of farm successorsincrease in production costsrisk of introducing infectious diseases by farm scale expansion
【 needs 】vaccines for infectious diseasefeeding management technologyfunctional materials (substitution for antibiotics)
【 opportunities 】farms tend to be large scale and consolidatedhigh production efficiencyhigh commercialization rateshortening of age at shipment
Companion Animal Market(Unit: Million JPY) 2013 2014 2015
Flea medicines for dog （ single agent) 7,239 5,745 6,644
Heartworm preventive （ single agent） 4,721 3,836 3,925
Circulatory system drugs 3,051 3,268 3,770Antibacterial/Antibiotic agents 3,588 3,415 3,736
Canine vaccines (Excluding Rabies) 3,484 3,100 3,140
Flea/Heartworm combined medicine for dogs 1,154 1,166 2,895
Flea/Heartworm combined medicine for cats 2,057 1,729 2,076
Skin cleansing drugs / Disinfectants 1,939 1,722 1,744
Rabies Vaccines 1,622 1,386 1,732Feline vaccines 1,795 1,658 1,721
Antibacterial agents (topical medicines) 1,070 1,139 1,506
Nervous system agents 1,117 1,143 1,366Diagnostic products 1,416 1,136 1,354
Dermatological Drugs （ non-antibacterial） 1,187 1,097 1,180
Optic / Oral 1,191 1,144 1,150Others 3,052 3,304 3,778
total 39,683 35,988 41,718
15.9%
9.4%
6.9%
5.0%
0.4%7.5
%4.2%4.1%
9.0%
3.6%
2.8%
4.2%
1.6%
2.8%
9.0%
2.4%
3.3%
3.2%
1.7% 1.4% 1.0% 0.0% 0.5%
2015 Flea medicine for dog （ single)Heartworm pre-ventive （ single ）Flea/Heartworm combined medicine for dogFlea/Heartworm combined medicine for catIntestinal an-thelminticCanine Vaccines (Excludes Rabies)Rabies VaccineFeline vaccineAntibacterial/Antibiotic agentAntibacterial agent (external medicine)Dermatological Drug （ non-antibacterial ）Skin cleansing drug / DisinfectantAnti-viral drugEye / OralCirculatory organs drugs
【 characteristics 】most clinics are run by private practitionerspreventive medicines make up most of the marketincreasing needs for treatments due to aging of pets
【 concerns 】decreasing number of pets, increasing number of clinicsdemand for innovative and specialized veterinary medicines
【 needs 】Intractable diseasesallergic diseasesenhanced aged pet careregenerative medicineadvanced medical care
【 opportunities 】aging of pets and ownersdemand on medical specialists / certified vets expansion of advanced medical and secondary care facilitiesincrease in pet health check visits
Companion Animal Market
3. Key Elements of Success in the Japanese Market
Survey Responses from Foreign Suppliers
We asked several foreign animal health product suppliers about their impressions or thoughts on the Japanese market.
suppliers who;
don’t have subsidiary in Japan.
have launched their products and have been successful in the Japanese market.
Q-1) In general, what is the benefit or value of entering the Japanese market?
“The Japanese market is a sophisticated market, values quality and its prepared to pay for it. Some markets want quality but will then try to buy at low quality prices.”
“Japan as one of the top ten pet markets in the world is of course a vital and very strategic market to take part of. If you succeed the Japanese market is very stable and profitable.”
“It is a very closed and difficult market to enter. Therefore, if your product launches successfully, it is a privilege to say it is on sale in Japan.”
Survey Responses from Foreign Suppliers
Q-2) What would be the key for success in the Japanese market?
“Not only for the language and cultural inside knowledge but other matters like Japanese distribution chains which are complex, multilayered and often closed to foreigners. In fact, local partnerships may be the most important element.”
“Quality, not only in content and function, but also in packaging. Japanese culture gives a lot more weight to packaging/presentation than other markets. We see this not only in business but right throughout Japanese culture. A Japanese gift is not given without two or three layers of wrapping, I haven't seen this to the same extent elsewhere. “
“To work with a company with a good distribution system with focus on premium products with high standard and quality. The delivery from us must of course be of the highest standards with reference to quality, punctuality and price worthiness.”
“To give seminars and pay visits to pass on valuable information to the customers. Having face-to-face meetings is important.”
Survey Responses from Foreign Suppliers
Q-3) What are the major difficulties that foreign companies may face when entering the Japanese market?
“Language barrier inhibits communication level between supplier and local distributor.”
“People in Japanese industry are very traditional and it seems that they are reluctant and not open to accept new ideas from the outside.”
“Japanese people are much more interested in intricate details, whether it be registration documents, product features, or the flavours in their foods. “
“Japan has a bit more registration formalities and other obstacles to concur but in no way impossible. It is hard work from both sides and necessary to be prepared with all documentation and have patience. “
Survey Responses from Foreign Suppliers
Q-3) What are the major difficulties that foreign companies may face when entering the Japanese market?
“ Japanese business is conducted through relationships, usually longstanding, and take much time to develop. This is a two edged sword, and can in effect be a barrier to entry, but once established leads to a long and fruitful business relationship.”
“Japanese societal rules and etiquette is complex, more formal and widely followed by its population, relative to most cultures……it can cause foreigners to invest time and effort in the wrong people who will not be making the business decision.”
Survey Responses from Foreign Suppliers
Key factors:
1. Communication:
Establish a close relationship with local partners to be able to exchange straightforward opinions.
Making someone worry / causing trouble to someone is a bad thing in Japanese culture.
People tend to hesitate giving frank opinions or feelings.
Frequent follow ups, face-to-face meetings.
Listen to what locals (local authorities) say.
Don’t worry too much about how to bow or exchange business cards.
Key factors:
2. Quality of product:
End users are interested in the outcomes of using your products.
what is the benefit? Prevention of diseases…Improvement of profitability… marketing tools should be based on credible data.
People have no doubt about receiving quality products.
Strong demand on stable quality control and supply.
People tend to judge the quality of the product by it’s appearance.
Presentation of product (packaging / labeling) is almost as important as its efficacy.
Key factors:
3. Comply with local regulations:
Authority / Industry is now highly aware of compliance.
A series of violations of the Pharmaceutical Affairs Law have caused serious problems recently.
4. Regulatory work:
Choose a local partner who has experience and the appropriate number of staff.
Be cooperative with local partner regarding Dossier preparation.
No short cuts. Building special relationships with officials does not help.
“You may often hear that doing business in Japan is very difficult, but in our experience, to start a cooperation is not difficult and it is a positive experience.”
“Finding a good partner in Japan is of utmost importance. Once everything is cleared and an agreement is signed, everything works smoothly.”
As a result, working with reliable partner is the most critical!
