The development of the food-processing industries in Japan can be expressed in terms of changes from traditional food production for self-sufficiency during the pre-modern period to the production of modern differentiated products by the introduction of modern technologies that have been imported, adapted, and developed in their own ways. Thus, today there is a coexistence of both traditional and modern types of producers supplying their own products in the market. This line of development is due to the constraints on the conditions of raw materials suppliers, as well as changes in consumption patterns of consumers.
Japanese food-processing firms are generally small in terms of number of employees and value of output per unit. Among the developed countries, Japan has the largest number of food-processing firms of which 95.1% consist of small-scale ones. These small firms are located in many prefectures, and have served local consumers and households. On the other hand, there are small numbers of exceptionally large establishments, such as flour mills, sugar and fish-processing plants. They receive stable supplies of raw materials in large amounts, and the procurement problem is relatively minor. Although recently the number of small-scale firms has tended to decrease, the characteristics of structural dichotomy in the industry still prevail strongly. As a result, the industry is confronted with many problems, such as high cost of production and relative disadvantage in trade with large retailers, in addition to raw materials supply problems, environmental concern related to the disposal and recycling of packages, and an increasing competition from other countries as Japanese currency has appreciated. The concept of food system is the most suitable for capturing the overall features of food industries. In this report we will discuss the development and constraints of the Japanese food industries in terms of food system.