The loss of the United States’ No. 1 export market for beef was a huge blow after BSE was discovered in this country in December 2003. While the Japan market partially reopened two years later with the acceptance of beef from cattle 20 months of age and younger, the limited number of age-verified cattle reduced U.S. beef exports to Japan in 2007 to less than 9 percent of the peak volume and roughly 13 percent of the peak value reached earlier in the decade.
The challenges facing the U.S. Meat Export Federation (USMEF) are how to rebuild as much of the Japan export volume as possible and maximize the value of beef exports while utilizing a much smaller fraction of the cattle herd. Understanding that the bulk of U.S. beef exports to Japan before December 2003 consisted of 12 cuts of meat, USMEF devised an innovative strategy and research program to develop 17 unique new beef cuts that would appeal to Japanese consumers and help increase volume sales.
With financial support from the USDA; Nebraska Beef Council, Nebraska Corn Board and Nebraska Department of Agriculture; research support from the University of Nebraska-Lincoln and assistance from Colorado State University, USMEF embarked on a program a few years ago that is yielding substantial results in Japan and offers promise in other export markets as well.
Beef exports hit post-2003 highs
With the new beef cuts program in full operation in 2008, beef export statistics are painting a positive picture: export volumes of U.S. beef to Japan in April 2008 jumped 93 percent over totals from the prior year while volumes in May 2008 were 72 percent higher than 2007 totals. May’s volume of 7,683 metric tons (16.9 million pounds) was the highest since December 2003. For the first five months of 2008, beef exports to Japan were up 58 percent to 24,193 metric tons (53.3 million pounds) and 53 percent in value to $125.2 million.
While some of the increased volume can be attributed to increasing numbers of Japan-eligible, age-verified cattle, that has been offset by the delisting of several key U.S. beef plants that had accounted for a significant amount of exports to Japan. These age-verified cattle come at a premium price, and the key for U.S. beef processors is to recover the cost of these cattle by selling more cuts and a higher percentage of the carcass.
“When only a fraction of all beef cattle are eligible for use in export products to a key market like Japan, we need to utilize as much of the beef as possible for products that will appeal to a customer base that is very precise and demanding,” said Philip Seng, president and CEO of USMEF.
“We knew that if we could develop new beef cuts that would be a good fit with Japanese cuisine, we could get much more value from parts of the animal than we were seeing previously,” Seng said. “Under the guidance of Takemichi Yamashoji, our senior marketing director in Japan, we created 17 unique new beef cuts specifically designed to serve the needs of our trading partners in Japan.”
USMEF introduced the new cuts concept in Japan after the market reopened to U.S. beef, and embarked on an extensive, multi-step educational campaign to introduce the new cuts to Japanese retailers and foodservice outlets. Elements of the program included:
- A “Beef Caravan” visited five cities (Tokyo, Osaka, Nagoya, Sapporo and Fukuoka) and met with more than 600 key buyers and executives in the fall of 2006.
- The Yakiniku Association, composed of 467 member companies with nearly 1,400 outlets, participated in a seminar in spring 2007 to learn about merchandising the new cuts (including top blade muscle and chucks) for use at Yakiniku (barbecue) restaurants. The session included cutting demonstrations and tasting of eight of the targeted cuts.
- Trade shows: The FoodEx trade show – the largest trade show in Japan that draws an estimated 120,000 food industry buyers – and Meat Industry Showcase were used by USMEF to introduce the 17 new cuts in 2007 and 2008.
- Company-specific demonstrations in 2007 and 2008: USMEF conducted company-specific shows, including one with the CGC Group, which includes approximately 200 companies with more than 3,000 outlets. Another program was developed for Marudai Co. Ltd., the fourth-largest meat processor and importer in Japan, and Marudai customers. Marudai has been a loyal supplier of U.S. beef and was the company to first import U.S. beef when the market reopened in December 2005. Marudai also is one of the most influential traders for many retailers and foodservice companies.
The 17 new cuts, including top blade muscle for steak and yakiniku (grilled meat); rib cap plate for thin-sliced beef gyudon (beef bowl); and brisket for thin-sliced beef alternative cuts of short plate, have been warmly received by national and regional supermarket chains as well as one of largest “bento” chains and frozen food companies.
USMEF’s Business Development Team program has played an integral role in business growth by bringing Japanese beef buyers to the United States to meet with prospective suppliers so they can begin developing relationships and confidence in the ability of suppliers to meet the needs of the Japanese buyers. This year, USMEF is organizing visits for 25 Japanese companies.
Additional USMEF tactics
Beyond the extensive training and educational sessions with retailers and distributors, USMEF has devised communications elements for consumers as well. USMEF developed an elegant cookbook with a variety of recipes that use a number of the new cuts, along with helpful cooking hints. USMEF also has conducted in-store tasting demonstrations and cooking schools, and obtained chef testimonials. U.S. beef promotions in high-end hotel restaurants have been an additional key element of the campaign.
Overall, the campaign has had a major impact on the number of retail outlets that carry U.S. beef. When U.S. beef shipments to Japan resumed on a continuous basis in July 2006, approximately 8,000 retail outlets were carrying U.S. beef. Since the alternate cuts campaign kicked into high gear at the start of 2008, that number has soared to more than 10,500.
Similarly, the number of companies carrying U.S. beef has jumped from about 260 at the end of 2007 to nearly 300 currently.
“This collaborative program, developed with the support of the USDA and our industry partners in Nebraska, is helping the U.S. beef industry get a bigger return on its investment in Japan,” said Seng. “As we increase our penetration in the market, both the volume and value of U.S. beef exports to this key trading partner will continue to grow.”