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Recapturing Lost Japan Market

Published: Aug 23, 2006

Slow But Sure For U.S. Beef
With the Japan market open again to U.S. beef, expectations are high that product will flow quickly into what was once a lucrative market for this country’s beef marketers. But the landscape has changed in Japan since U.S. beef was regularly available in 2003. U.S. beef faces significant – but surmountable – challenges as it re-enters the Japanese market.

“We understand that this will be a long and difficult road,” says U.S. Meat Export Federation (USMEF) President and CEO Philip Seng. “But we are up for the task. For more than 25 years, USMEF has worked with the Japanese trade and communicated with Japanese consumers – even while we were out of the market.”

Evidence that many Japanese would welcome the opportunity to purchase U.S. beef was clear on Aug. 9, when three Costco stores in the Tokyo area sold out of available product. About five metric tons of U.S. beef was sold in the stores, with consumers lining up to taste beef samples and many purchasing multiple packages.

This example was despite a complex Japanese infrastructure for importing and distribution, a volatile political atmosphere in Japan, increased competition from Australia, skeptical and nationalistic Japanese media and a supply of product that is growing in slow steps in this country.

Consumer Sentiment
The safety of U.S. beef has been confirmed by the Japanese government – not to mention through billions of servings each year in this country, with no human cases of disease related to BSE found. However, because of heightened concern, aggravated by Japanese media and political opposition forces, Japanese consumers seem skeptical. Domestic, Australian and other imported products are now considered safe, while the reputation of U.S. beef has suffered.

Australia has had three years to establish a now 80 percent share of the Japanese beef import market. That country was the top exporter of beef to Japan last year, exporting 440,304 metric tons, worth $2.1 billion (U.S.).

In addition, Australia has recently completed a major retail promotion campaign featuring a well-known cooking instructor and a consumer outreach featuring giveaway prizes. Thanks to expanded promotion funding through an increase in its domestic levy (checkoff), Australia plans additional promotions to convey their beef is safe and is high in quality.

Compounding the challenge is some importers are reluctant to buy U.S. beef because of a perceived risk the market could close again. Others are still paying storage costs for product that was in the pipeline from January, when trade was suspended due to banned material found in one shipment. High costs related to 100-percent inspection of boxes and a “wait-and-see” attitude among buyers unsure of how Japanese consumers will react to U.S. beef are also resulting in a slow startup.

We Care Campaign
To help overcome these challenges, USMEF has developed a campaign called “We Care”. This multi-faceted campaign has two main elements: a “push” effort directed at the trade and a “pull” element directed at consumers.

The trade strategy aims to convince retailers and foodservice buyers who are hesitant to purchase U.S. beef by demonstrating the product is safe, there is little chance for problems, there is consumer demand and there is opportunity for profit. This strategy will be supported through buyer teams, a “beef caravan” that visits several Japanese cities, a trade version of a virtual tour, a book that takes a closer look at approved U.S. packers, retail and hotel/restaurant promotions, point-of-sale materials and a reception at one of Japan’s premier hotels with U.S. industry representatives.

On the consumer side, the objective is to create positive attitudes and positive peer pressure encouraging consumers to purchase U.S. beef. The strategy will be supported through newspaper ads, a Web site, a consumer virtual tour, “We Care” local barbecues and media events.

“We will be demonstrating to our Japanese customers that we care about our production, our processing and our safety systems. Most importantly, we’ll demonstrate we care about them. We are confident that they will respond favorably,” Seng concluded.

The U.S. Meat Export Federation 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, lamb, corn, sorghum and soybean checkoff programs.


The following photos are available with this release:

Photo 1 – USMEF Japan Director Greg Hanes describes the "We Care" campaign to interested media Aug. 9 at a Costco store in Tokyo while Japanese consumers tasted U.S. beef samples and purchased approximately 5 metric tons of the first shipment of U.S. beef since trade resumption.

Photo 2 – USMEF launched its "We Care" campaign with this newspaper advertisement that ran in Japanese major newspapers Aug. 4. The "We Care" campaign includes many activities to regain the trust and loyalty of Japanese trade and consumers.