Ramen boom in Japan: culinary happiness or bankruptcy crisis?

Ramen boom in Japan: culinary happiness or bankruptcy crisis?

Ramen gastronomy in Japan reached an all-time high in the 2024 fiscal year. According to information from Sumikai The market volume of the sector is around 7,900 billion yen, which corresponds to around 45.8 billion euros. This represents a notable increase of 56 percent compared to fiscal year 2014. The boom in the ramen industry is primarily fueled by the return of international tourists as well as increased popularity among locals.

The top 50 companies in the ramen segment operate an estimated 6,200 stores, which is a new high. Particularly standout is the “Iekei Ramen” chain, which originated in Yokohama and combines rich pork bone-based broths with soy sauce. To accommodate the large crowds, some restaurants have introduced entry tickets.

Cost and price pressure

However, despite the growth, the ramen industry is facing significant economic pressure. Increases in the production costs for ingredients and energy are particularly affecting small, individually managed ramen shops. According to one index, the ramen raw material index for 2024 is around 129 points, with cost pressures forcing operators to increase their prices. Especially in central Tokyo, ramen often costs over 1,000 yen, while many shops traditionally priced between 600 and 800 yen.

A survey by Restaurant News Tokyo has also documented an increase in ramen shop bankruptcies. In the period from January to July 2024, 49 bankruptcies were registered, almost doubling compared to 53 cases in the previous year. The forecasts suggest that the number of bankruptcies could potentially reach over 100 cases annually, which would be a record high since 2020.

Price increase and ingredient costs

The main reasons for these developments are the increasing costs of important ingredients. Pork and shortening prices rose nearly 20 percent year-over-year, further increasing the economic burden on ramen restaurants. In addition, rising energy costs, as ramen shops often have to heat their broth for 24 hours, place a significant burden on operating expenses.

The ramen ingredient price index was 113.5 in June 2024, which represents a further decrease compared to the 2022 average. Concerns about preserving ramen culture are growing, and it is becoming increasingly necessary to take measures to maintain quality and find a “fair price” for consumers.

Overall, the picture of the ramen industry in Japan is complex: While the boom is fueled by tourist interest and the expansion of successful chains, many smaller providers are under pressure, which could lead to an increasing number of bankruptcies.