Far East, but no longer so far out

The Japanese food market has exploded in the UK’s cities in recent years, but the category still seems to suffer from a lack of understanding among consumers. The true diversity of sushi appears to have been lost in translation, as it has become synonymous with raw fish rather than the wide range of cooked meat and vegetarian products it also includes.

New research from Mintel shows that nearly half of all British adults hate the idea of eating raw fish and this level of aversion is a fairly large hurdle for the sector to overcome. Sushi has a lot more to offer and customers simply need to be educated about it. This will help to increase awareness about sushi products, and presumably encourage consumers to try sushi.

Noodle bars, on the other hand, have had an easier entry to the UK. British consumers’ long-standing love affair with Chinese food is a factor in favour of noodle bars. Noodles are also sold widely in supermarkets, so consumers are familiar with them.

Consumers are more open to trying noodle bars as there are fewer misconceptions associated with these outlets and they tend to offer obvious benefits such as quick service and healthy menu choices. The most popular style of noodle bar remains the Japanese “ramen” outlet, which basically means “noodles in soup”. In Japan, ramen are the equivalent of the British late-night curry, providing hot meals for clubbers and night workers. But noodles are also an integral part of other Asian cuisines such as Chinese and Thai, both of which are also popular in the UK.

Mintel estimates that the sushi and noodle bar market is now worth about &£66m, with sushi accounting for 53 per cent of the total turnover. There are similar numbers of outlets trading in each sector, but the relatively higher cost of a sushi meal puts that sector’s value just above that of the noodle bar market.

The data shows that there are a significant number of potential consumers outside London or metropolitan areas, but that there is a lack of outlets near these people’s workplaces or homes. This is clearly a barrier to their trying Japanese food and shows that there is potential for expansion beyond the UK’s major cities. Additionally, if such outlets become an accepted part of the suburban landscape, their appeal to consumers is likely to widen.

The eating-out market has been characterised over the past few years by a growing demand for fast, fresh food served restaurant-style in a casual, mid-market environment. Sushi and noodle bars, with their communal tables and “turn up and eat” approach are the perfect fit to this demand. But again, there is a need for education about Japanese food – some consumers still believe that it is “unhealthy”, like Chinese take-aways can be. This suggests that marketers of such products – both in restaurants and in retail outlets – need to focus on the health benefits of Japanese food, particularly as UK consumers are becoming increasingly concerned about obesity.

The sushi and noodle bar sector is not only a direct alternative to conventional fast-food outlets, but a direct competitor to mid-market and other casual, fast-service restaurants. Being relative newcomers to the eating-out scene, sushi and noodle bars are not only faced with the challenge of competing with existing players in the market, but also with outdoing other newcomers in their sector, fighting to take a share of the market for something new and different. In addition, sitting as they do between fast-food and full-service restaurants, such outlets compete with both sub-segments. As they do not fit into an established genre in the UK, these restaurants need to capture customers from other cuisines.

The Japanese food market is still characterised by numerous independent businesses or small chains of about five outlets. The sushi market is still known for the Yo! Sushi chain and the noodle market is led by Wagamama.

Despite these companies being notably larger than any other operators in this particular niche, both Yo! Sushi and Wagamama are comparatively small compared to other mainstream chains. That said, there are clear indications that an expansion in outlet numbers can be expected from the leading brands over the next few years.

The growth of Yo! Sushi, and its move into supplying supermarket sushi, has undoubtedly encouraged its popularity, and as a result, major supermarket chains such as Tesco now stock sushi as part of their range. And there is a distinct connection between consumers’ supermarket shopping behaviour and their habits in restaurants.

Mintel found that consumers who buy sushi and noodles in the supermarket are also likely to eat them when out. This connection is likely to benefit the sector in the future, as the range and quality of ethnic cuisine within major supermarkets continues to grow. It will have a direct influence on diets and might even motivate consumers to try more exotic dishes.