Japan's Orange Juice Shortage: Challenges and Opportunities

Japan faces an orange juice shortage, exacerbated by supply shortages in Brazil, rising demand, and a weakening yen. The orange juice crisis follows the potato shortage of 2022, when some fast food chains in Japan had to restrict French fry sales or replace their spuds with alternatives; the Butter Crisis of 2014, when major supermarkets rationed shoppers to one pack each; and the Pizza Potato Crisis of 2017, which led Japanese chipmakers, Calbee and Koikeya, to halt production.

In early Apr-24, Megmilk Snow Brand, the Japanese distributor of Dole juices, suspended sales of its Dole Orange 100% juice in 450-millilitre (ml)and one-litre cartons, leaving the less-than-half-pint 200-ml pack as the only remaining option. Then, on April 25, 2024, Morinaga Milk, Sunkist’s Japanese distributor, announced that it would be suspending sales of 200-ml cartons of Sunkist 100% Orange once its current ingredient supply runs out.

The leading cause of the Japanese orange juice shortage is supply concerns in Brazil. Japan imports about 90% of its orange juice, mostly from Brazil, which suffered significant rain damage and a citrus disease outbreak in 2023. At the same time that supply is taking a hit, demand is rising, leading to higher prices. Unfortunately, this coincides with the yen cratering in value versus foreign currencies. According to statistics released by the Japanese government’s Ministry of Finance in March, the in-yen import price for orange juice has jumped 69% from a year ago and doubled since 2019, making it difficult for Japanese companies to import it in the current business climate.

Figure 1: Import Price of Orange Juice in Japan

When faced with high import-associated costs for a popular product, the simple solution would seem to be increasing domestic production. However, Japan’s small size and mountainous geography mean that farmable land is limited, especially when other heavily subsidized crops, like rice, usually take precedence. Additionally, Japan’s citrus farming primarily focuses on mikan (mandarin oranges), a popular staple food but not well-suited for making juice, as mikan juice tends to be very syrupy compared to orange juice.

The announcement of sales suspensions by Japan’s orange juice distributors coincided with the revival of the Nokyo Kajitsu brand of 100% fruit juices by Japan Agricultural Cooperatives. This brand had been inactive for the past 14 years. However, both Nokyo Kajitsu varieties, which went on sale on Apr-24, use mikan juice, not orange juice. Therefore, Tridge anticipates that the Japanese orange juice shortage could persist for the remainder of the year.

Figure 2: Nokyo Kajitsu

This shortage presents a significant opportunity for orange juice suppliers from other countries, particularly the Netherlands and South Africa, to fill the gap in the Japanese market. Both countries are known for their high-quality citrus production and could leverage this advantage to meet the rising demand in Japan.

Driven by supply disruptions from Brazil and rising import costs, the orange juice shortage in Japan offers a significant opportunity for other suppliers, particularly from the Netherlands and South Africa. By focusing on strengthening trade relations, offering competitive pricing, effective marketing, adapting to consumer preferences, establishing long-term partnerships, and ensuring regulatory compliance, these countries can effectively fill the supply gap and establish a strong market presence in Japan. Moreover, this situation opens avenues for broader market reach in the European Union and other Asian markets, leveraging the growing demand for sustainable and health-oriented products. This strategic approach addresses the immediate supply shortage and builds a foundation for long-term growth and market expansion.