Panko or Breadcrumbs are an integral part of Japanese cuisine, however the industry faces stiff headwinds

Not many people know that the Japanese breadcrumb category is worth around $350m.

Breadcrumbs are an every day part of life and used to make batter for fried foods like Tonkasu and fish, they also coat many types of vegetable dishes. Panko as it’s called here, is a combination of the word ‘Pan’ (‘Le pain’, French) and ‘Ko’ meaning powder.

Panko makers are not the biggest food companies. It’s not a high tech category; not a category where branding is important. Many companies are regional; a significant percentage of their sales are to the industrial rather than retail channel.

No surprise perhaps in this era of commodity price inflation, breadcrumb makers are crying wolf.

Wheat, the major component has seen several price hikes this year, as has cooking oil.

Covid has seen a dramatic reduction in Foodservice footfall and whilst households do use Panko at home, it’s in nothing like the same volume.

Unlike in the West where companies build plants with scale and cost efficiencies, many Japanese factories are small. They’re designed to be flexible. Breadcrumb is a just-in-time ingredient sold to upstream producers who seek freshly produced fare. Asahi Trust Foods, a leading player in the Breadcrumb industry has 3 plants in Japan, the smallest has a capacity of just 3000 tons.

Will we see restructuring or industry consolidation? I’m not sure but according to one news report there’s discussion going on in the Industry Association.

Interested to see inside a Japanese Panko factory? Check out this video! It also has amazing insights into how small Japanese businesses are run.

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