published: February 17th 2017
by: Kindra Gordon
With 7.4 billion people on the planet and 96% of those peopling living outside of the United States, an enormous opportunity exists to sell an abundance of American beef around the world.
Dan Halstrom, U.S. Meat Export Federation Senior Vice President of Global Marketing, notes that it has been a long, steady regaining of market share that the U.S. used to have since the 2003 BSE incident. But he adds, “The good news is it’s been a steady upward trend.” He notes that American beef exports fell some in 2015, but are back on an upward trend in 2016.
Working diligently to help create marketing opportunities is the US Meat Export Federation (USMEF), which has 18 offices with staff working around the world. “Our mission is to increase value for US beef, and we do that through partnerships with other countries. Our global network is key to understanding cultures and expanding markets,” Hals-trom explains.
Over the past 40 years, the value of US beef exports has grown significantly. The value of U.S. beef exports grew from $3 billion in 2009 to over $7 billion in 2014 – almost to the level they were at in 2002. Today, for every beef animal slaughtered, about $280/head is attributed to value from exports.
“We’re selling the right cut to the right market to maximize value…and some markets are very important,” Halstrom says. He explains that many parts of the carcass that do not have domestic demand are valuable in other places around the world.
Presently, Mexico is the largest volume buyer of US beef, with Japan second in volume. However, Japan represents the top market for U.S. beef based on value. Additionally, Korea, the Middle East, Hong Kong and Canada are also key markets.
High quality image
To develop these markets, Halstrom notes, “Like any business, developing relationships is key.” This includes relationships with food distributors, importers, retailers and foreign governments.
He explains, “In many cases our US beef is generally higher priced than competing beef from other countries, but that’s not necessarily a bad thing. Our educational efforts aim to sell the value of U.S. beef – the high-quality, grain-fed tastiness compared to other beef that does not offer nearly as good of a taste experience.”
And, he says marketing, relationship development and image building must be continual. He says, “There is a lot of value added through exports, but we (America) are not the only ones who have figured that out. Our competitors around the world are very well aware of this, including Australia, Brazil and Canada. So it’s a fierce situation out there defending our share and trying to expand our share.”
What is USMEF’s marketing strategy in these export markets? Halstrom notes that it differs by country depending on cultural and societal trends, as well as government relations.
As examples, a current campaign in Japan promotes “Think Beef, Think American,” which is designed to promote the image of high quality American beef. He says food service, retail and convenience stores – which are 50,000 strong across the country with 60 to 80 feet of refrigerated space in each of them – represent many options for American beef.
However, Halstrom explains that a challenge in Japan is the fact that American beef has an 11% higher import duty than Australia. In spite of that, he notes that the trend line shows that marketing efforts have helped increase American beef exports to Japan over the past decade, but with Japan importing about 50% of their beef – and the majority still coming from Australia, he says, “We still have a lot of opportunities to displace Australia.”
In Korea, American beef is also gaining share quickly, which is exciting, says Halstrom. One promotion strategy with retailer eMart includes using Ricky Kim, a famous actor in the country, as a celebrity in ads for American beef.
Also in Asia, Halstrom notes that the e-commerce sector is growing dramatically. He reports that consumers like the convenience and high quality products they can order at noon and have delivered to their door by 5 p.m. without having to deal with city traffic. Pork is already available via ecommerce, and he says, once beef has access into China, he anticipates it will grow very quickly.
From a demand marketing aspect, Halstrom notes that China is a key for the future. American beef does not currently have direct access, but Halstrom says they are in a planning mode for when access does come. USMEF anticipates initial access may only be for hormone—free beef, but whatever is granted, Halstrom says, “We’ll be ready. We are planning a high-end roll out when it does happen.”
Another region of the world where beef demand is growing is Central and South America. USMEF has had success there hosting a Latin American Showcase, which brings beef buyers and sellers together to network as well as attend seminars on beef production. Halstrom says the event, which has been held annually for six years, has been “one of the most successful things we’ve done.”
Of the future, Halstrom is excited for continued growth of beef export opportunities. He notes that access to South Africa was approved in spring 2016, which marks a milestone for future expansion into Africa as their economy and cold storage infrastructure improve over the next decade. Access to Brazil for the first time since 2003 was announced on August 1, 2016. They have a population of 200 million-plus and a growing middle class.