July 12, 2013

Catering to a Roomful of Customers

Some 640 meat buyers enjoy samples of U.S. beef and pork during the USMEF
seminar and tasting session

TOKYO, JAPAN (Thursday, July 11, 2013)—This afternoon/evening, USMEF hosted some 640 key Japanese meat buyers at a U.S. Meat Seminar & Tasting Session held at Hotel Okasa. 

USMEF President & CEO Phil Seng welcomed the group, as did David Miller from the U.S. Embassy.  Both pointed out the change to the availability of 30-month US beef and thanked those in the room for their support of U.S. beef and pork. 

Dr. Ron Plain, University of Missouri, brought the group up to date on the state of key ag production figures: 

CORN OUTLOOK:  Forecast for this year:  14 billion bushels—a record by one billion.  If it happens, it would ould lead to lower corn price, lower feed costs, lower meat production costs.   USDA forecasts a $2 drop in corn prices, the biggest year-to-year drop in history.

BEEF OUTLOOK:  Beef production grew rapidly in 50s and 60s.  Peaked in 1975, but not a lot of growth since then.  The number of cattle in the U.S. continues to decline...we know have the smallest cattle herd in U.S. since 1952.  So how are we producing more beef with fewer cattle?  Producers are getting better at what they do.  Improved Calf health.  Less death less.  Slaughter weights up.  It all helps increase the amount of meat from a smaller cattle herd.

Over the past two years, there has been a relatively high percentage of slaughter of herd (mother cows).  If that percentage drops, more mothers, more calves.

If we get better weather (i.e. rain), we'll have better pasture.  This should lead to a sharp drop in slaughter of mother cows.  While there will be a short term drop in supply, there should eventually be more cows which leads to more calves which leads to more beef on the market—and that should put downward pressure on price.
Meat buyers and purveyors listen intently to
presentations on marketing, promotion, quality
and availability of U.S. beef and pork.

PORK OUTLOOK:  Pork has been the most stable meat in the U.S.  Essentially a 1.5% annual growth since 1930.  More dependent on exports.  Hog farmers are getting better at what they do, more pigs per sow per year.  More than doubled production per sow since 1930. 

Better production in beef and pork makes price increases less than cost of living increases—making both products a good value.

MAJOR UNCERTAINTIES:  Cost of feed and weather.  Economic growth.  Growth in breeding herds if feed supplies increase.  Exchange rates.  But the yen is getting weaker, which should make U.S. products more attractive to Japan.

REIKO OGATO of Dentsu, Inc. , Japan's largest advertising agency, spoke about branding.  The volume of information available to consumers has exploded.  What was the information contained on one sheet of paper in 1996 will become 100,000 pages (the height of a six-story building) by 2025.  

It used to be that information to consumers was driven by manufacturers.  But with social media, the consumer has become a significant driver as they search for information and then share what they have learned through experience.  That cycle repeats over and over—and the manufacturer has less influence as a result.  "The consumer cannot be controlled by the message sender," she said.
Taz from the USMEF Japan office presents
information on the "juku" campaign to promote
the increased availability of U.S. beef.
 (The blogger event yesterday fits in well with this consumer-driven marketplace.  Some of the bloggers have 20,000 readers—every day!)

This "differentiation" message was echoed by Susumu "Sam" Harada from USMEF, as he spoke about the opportunity to set American beef and pork apart in the marketplace.

USMEF's Takemichi "Yama" Yamashoji and  presented information on American beef and pork, pointing out the aggressive consumer information and chef training programs that USMEF is implementing.   Home runs such as the Dean & Deluca decision to use American beef and the promotion of "chunk" beef and pork for family dining were presented—as well as a number of cooperative promotional opportunities which those in the room could take advantage of.  The underlying message was that USMEF is here to help these buyers succeed in reaching their customer and in reaching consumers.

A couple of interesting notes:
  • Outdoor barbecuing (grilling) is on the rise in Japan, to some degree because camping out is becoming more popular.
  • July 22 is a date on which most Japanese prepare grilled eel for dinner, as it is believed that eel helps increase one's stamina in the hot summer weather.  But eel prices are high, so USMEF is promoting the use of soy sauce-sauteed American pork as a substitute—that can also provide the energy and stamina Japanese people need to withstand the oppressive weather this time of year.

Mark Jagels of Davenport, Nebraska Corn Board director
and Chair-Elect of USMEF, addresses the crowd of 640
meat purchasers prior to the beef and pork tasting session.
Following the seminar, the 640 attendees were treated to a tremendous spread of American pork and beef prepared in a variety of ways.   USMEF Chair-Elect Mark Jagels welcomed the group and thanked them for their support of American beef and pork—and assured them that American producers would continue to provide safe, wholesome and delicious products.

Our team remarked on the incredible impact USMEF activities had in just over 24 hours—from reaching 40 influential food bloggers the previous day to educating 640 key meat buyers (at every market level) at a trade and tasting seminar.  A pretty impressive couple of events, to be sure.

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