July 10, 2013

A Visit with High-End Retailers—and a Taste of Wagyu Beef

TOKYO, JAPAN (Tuesdauy, July 9)—We met with representatives of Ito Ham in the USMEF offices this afternoon.  With almost $4 billion in sales last year, Ito Ham is the second largest Wagyu beef company and the second largest ham and sausage provider in Japan.  Ito Ham is one of the largest
Members of the beef mission meet with officials
from Ito Ham in the USMEF offices in Tokyo.
importers and processors of US fresh beef.  They also sell everything from pizzas to burger patties.

U.S. beef suppliers are JBS (Texas and Pennsylvania), National Beef in Dodge City, Tyson in Lexington, Nebraska, and PM Beef in Minnesota.  They have a relationship with two plants in Australia, from which they source their Angus beef.  They own a feedlot and plant in New Zealand. 

As a company, 60% of their imported beef is from Australia, 30% U.S. and 10% New Zealand. 

Ito Ham expressed concern about shelf life and color with U.S. beef.  Aussie beef has a 75-day shelf life, while U.S. is just 60 days.  Ito Ham is asking why there is a difference.  The USMEF team and the producers pledged to work in partnership with Ito Ham determine what research as been done on this issue and arrive at solutions and answers that satisfy our important Japanese customers.

A chef at the Ito Ham store in the
Shinjuku area prepared Wagyu
beef for our team to sample.
Later in the afternoon, we visited Ito Ham's boutique beef store in the trendy Shinjuku district of Tokyo, where we were treated to a sample of melt-in-your-mouth Wagyu beef—including some with fois gras, butter and wine.  "Wow!" was the reaction of most of the team.   (One man's opinion:  The first bite is pretty special.  But the next one, not so much; as the richness and high fat content starts to get very heavy very quickly.)

Some meat in the counter was north of $180/lb.

The second store chain we met with was Tokyu, which caters to a higher end consumer.  With 90 outlets, Tokyu began selling U.S. beef in February 2012, and sales have been rising, especially beef tongue.

Tokyu also has convenience stores, shopping center, and a super-high-end store called Precce.  Precce is practically across the street from the Tokyu store we visited, but the prices and selection were vastly different.  Example:  Pressa was selling tomatoes for $2 each, peaches for $5 and watermelons for $58.   A cut of Wagyu beef of 2.5 kilos (about five pounds) was priced at $85.

The exchange rate is making it difficult for these stores to justify increasing their use of American beef. 

Over the past two days, we have seen a wide range of retail outlets for American beef—and all of the companies are pleased that American beef is now more available in their market.  It's important, however, that the product fit within their business model and is matched to their consumers' taste.

The fact that American producers are here meeting with them face to face, however, is greatly appreciated and is having a very positive effect.  We also have heard appreciation and kudos from all the companies regarding their relationship with USMEF and the support and service this organization provides.
Mark Jagels and Dale Spencer
inspect American beef available at
the Tokyu store.

The general takeaway is that these Japanese buyers and retailers are sharp—and they know what they want.  At the same time, we need to educate them.  Just as there has been almost a generation of Japanese consumers who have not been exposed to the value and benefits of American beef, there is almost a generation of buyers as well.  

Most, if not all, of the retailers and purveyors we met with were in their late 20s or early 30s—and were teenagers or young adults when American beef disappeared from the Japanese market ten years ago.  They need to be brought up to speed and quickly.  

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