Market share of soft drinks in Japan 2021, by category

Ready-to-drink (RTD) tea dominated the domestic soft drinks market in Japan in 2021, with a share of 30 percent. In contrast, lactic acid drinks, referring to yogurt drinks and drinks containing lactic acid bacilli, held only a two percent share of the domestic sales volume. The Japanese non-alcoholic beverages market presents a broad portfolio of liquid refreshment beverages, which are purchasable not only via general store and non-store channels but also at over two million vending machines installed in Japan.

Tea to go in Japan

Tea is a popular beverage drank in Japan, with the brewed beverage being considered a healthy alternative to mineral water and carbonates in the non-alcoholic beverage market. While the hot drink used to be prepared with dried tea leaves and freshly boiled water in the past, the market has shifted to a timesaving and convenience-centered strategy to make the beverage available at any time. Bottled RTD teas include a variety of standard teas like green or black tea as well as infusions of roasted barley, herbal teas, and grain mixes. With new, limited releases and renewals of existing products entering the Japanese market regularly, the segment is steadily impeding the growth of rivaling soft drink segments.

Variety in manufacturing

The Japanese non-alcoholic beverage industry is characterized by a variety of manufacturers with different strategies to approach the consumer market. While large holding companies originating from the alcoholic beverages segment are competing with a multifaceted product portfolio to cover numerous segments of the soft drinks market, other manufacturers are building their portfolios around one segment. Ito En, Ltd. has successfully established itself as a leader for RTD green tea products with a 34 percent market share, whereas Yakult Honsha is leading the probiotic milk drinks segment. As startups are entering the market with innovative refreshers addressing current trends and a social media-focused marketing strategy, established manufacturers are varying their assortment with seasonal flavors to win over new consumers.