Phase I of U.S. Beef Retail Campaign Succeeds Despite Stormy Economic Weather...
Phase I of U.S. Beef Retail Campaign Succeeds Despite Stormy Economic Weather
Despite strong economic headwinds, USMEF is seeing positive and encouraging results from its initial beef retail campaign strategy in South Korea. The first phase, designed to reestablish normal distribution of U.S. beef in the top national retail chains, involved a series of high profile sales promotions designed to attract customers to stores, encourage them to try U.S. beef and spur sales.
At the end of February, after the lunar New Year peak food sales season, which fell during the last weekend in January, U.S. beef was available in 830 outlets of 12 supermarket chains. USMEF estimates that U.S. beef also is being sold in approximately 10,000 traditional butcher shops, including several chain operations.
"Considering that not one single chain outlet was willing to carry U.S. beef just 16 weeks ago, we are very satisfied with the substantial progress that has occurred so far,” said Jihae Yang, USMEF-Korea director. “That said, we still face a number of significant challenges in rebuilding confidence in U.S. beef and reestablishing our presence in the Korean market."
Korea's three major retailers, E-Mart, Samsung Homeplus and Lotte Mart, made independent but nearly simultaneous decisions to restart U.S. beef sales in the last few days of November last year. The three chains operate approximately 300 mostly large discount stores, in Seoul and Pusan. Although these “big box” chains account for a minority of U.S. beef sales in Korea, their high visibility makes them influential in setting the overall direction of the market. Following the decision by the big-three retailers, other medium sized chains, including GS Retail, Lotte Supermarket, Homeplus Express, Mega Mart, Top Mart, SM Mart and CM Distribution, quickly decided to restart sales of U.S. beef.
Sales of U.S. beef at stores where USMEF promotions were conducted ran at double the pace of those of nonparticipating outlets during the promotional periods. USMEF estimates that U.S. beef sales from the initial relaunch through the end of last month totaled 7.7 million pounds, with a retail value of $29 million. USMEF's promotions with the big chains, have been formulated around sales incentives for consumers.
"The incentive promotions were successful and played a critical role in enticing wary consumers back to trying U.S. beef and supporting retailer confidence that stocking U.S. beef would be profitable," said Yang.
Commenting on the recently concluded promotions by Samsung Homeplus, its beef manager said, "the U.S. beef promotion has been very timely and welcomed by consumers, as the economic situation has deteriorated and spending reined in."
U.S. beef continues to face major challenges. First and foremost, Korea is among the hardest hit of all nations by the global recession. The Korean currency this week floated about 43 percent below the level of last August, when the first new U.S. beef shipments arrived. Consumer expenditures have also contracted by double digits. According to recent spending data compiled by retailers, consumer expenditures fell 8 percent from the same period of last year.
Finally, consumers continue to harbor anxiety over U.S. beef, which is now manifesting itself more clearly in the foodservice sector, where restaurant operators must label the country-of-origin of beef and other foodstuffs. According to Yang, "Foodservice is an enormous challenge, as it accounts for half of total U.S. beef sales. The prominent featuring of U.S. beef at retail, however, has helped allay foodservice operators’ fears that consumers would shun their restaurants if they offered U.S. beef."
The next phase in USMEF's retail strategy, which will run through midsummer, is designed to increase sales, shelf space, and U.S. beef’s market share. USMEF will focus on expanding the range of cuts and cut merchandising by retailers, and increasing sales of U.S. chilled beef, which offers the best platform to showcase the high quality of U.S. beef. Cuts featured during the promotions will be extended beyond those figuring prominently in phase one, which included bone-in short ribs, chuck eye roll and chuck flap tail.
USMEF is also looking forward to the resumption of U.S. beef sales by department stores, which are seen by Korean consumers as selling only the highest quality products. U.S. beef realized a small but significant breakthrough last week when a new department store in the Shinsegae chain, the nation's largest, started selling U.S. beef.
According to Kevin Ha, general manager of Cargill Meat Solution's sales office in Seoul, "the USMEF promotions to date have been very useful to help rebuild consumer confidence in U.S. beef. We also appreciate how skilled the promoters have been in answering consumer questions about U.S. beef safety and quality."
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The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.
Phase I of U.S. Beef Retail Campaign Succeeds Despite Stormy Economic Weather
Despite strong economic headwinds, USMEF is seeing positive and encouraging results from its initial beef retail campaign strategy in South Korea. The first phase, designed to reestablish normal distribution of U.S. beef in the top national retail chains, involved a series of high profile sales promotions designed to attract customers to stores, encourage them to try U.S. beef and spur sales.
At the end of February, after the lunar New Year peak food sales season, which fell during the last weekend in January, U.S. beef was available in 830 outlets of 12 supermarket chains. USMEF estimates that U.S. beef also is being sold in approximately 10,000 traditional butcher shops, including several chain operations.
"Considering that not one single chain outlet was willing to carry U.S. beef just 16 weeks ago, we are very satisfied with the substantial progress that has occurred so far,” said Jihae Yang, USMEF-Korea director. “That said, we still face a number of significant challenges in rebuilding confidence in U.S. beef and reestablishing our presence in the Korean market."
Korea's three major retailers, E-Mart, Samsung Homeplus and Lotte Mart, made independent but nearly simultaneous decisions to restart U.S. beef sales in the last few days of November last year. The three chains operate approximately 300 mostly large discount stores, in Seoul and Pusan. Although these “big box” chains account for a minority of U.S. beef sales in Korea, their high visibility makes them influential in setting the overall direction of the market. Following the decision by the big-three retailers, other medium sized chains, including GS Retail, Lotte Supermarket, Homeplus Express, Mega Mart, Top Mart, SM Mart and CM Distribution, quickly decided to restart sales of U.S. beef.
Sales of U.S. beef at stores where USMEF promotions were conducted ran at double the pace of those of nonparticipating outlets during the promotional periods. USMEF estimates that U.S. beef sales from the initial relaunch through the end of last month totaled 7.7 million pounds, with a retail value of $29 million. USMEF's promotions with the big chains, have been formulated around sales incentives for consumers.
"The incentive promotions were successful and played a critical role in enticing wary consumers back to trying U.S. beef and supporting retailer confidence that stocking U.S. beef would be profitable," said Yang.
Commenting on the recently concluded promotions by Samsung Homeplus, its beef manager said, "the U.S. beef promotion has been very timely and welcomed by consumers, as the economic situation has deteriorated and spending reined in."
U.S. beef continues to face major challenges. First and foremost, Korea is among the hardest hit of all nations by the global recession. The Korean currency this week floated about 43 percent below the level of last August, when the first new U.S. beef shipments arrived. Consumer expenditures have also contracted by double digits. According to recent spending data compiled by retailers, consumer expenditures fell 8 percent from the same period of last year.
Finally, consumers continue to harbor anxiety over U.S. beef, which is now manifesting itself more clearly in the foodservice sector, where restaurant operators must label the country-of-origin of beef and other foodstuffs. According to Yang, "Foodservice is an enormous challenge, as it accounts for half of total U.S. beef sales. The prominent featuring of U.S. beef at retail, however, has helped allay foodservice operators’ fears that consumers would shun their restaurants if they offered U.S. beef."
The next phase in USMEF's retail strategy, which will run through midsummer, is designed to increase sales, shelf space, and U.S. beef’s market share. USMEF will focus on expanding the range of cuts and cut merchandising by retailers, and increasing sales of U.S. chilled beef, which offers the best platform to showcase the high quality of U.S. beef. Cuts featured during the promotions will be extended beyond those figuring prominently in phase one, which included bone-in short ribs, chuck eye roll and chuck flap tail.
USMEF is also looking forward to the resumption of U.S. beef sales by department stores, which are seen by Korean consumers as selling only the highest quality products. U.S. beef realized a small but significant breakthrough last week when a new department store in the Shinsegae chain, the nation's largest, started selling U.S. beef.
According to Kevin Ha, general manager of Cargill Meat Solution's sales office in Seoul, "the USMEF promotions to date have been very useful to help rebuild consumer confidence in U.S. beef. We also appreciate how skilled the promoters have been in answering consumer questions about U.S. beef safety and quality."
# # #
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.