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Where's the beef? It's mooving! Frozen meat trade is on the upsurge.

Japan and Korea become big-time importers, with the United States as well as Australia reaping benefits. For North American market, one US supplier has what must be the first really new idea for frozen meats in years.

You know how it is at seafood trade shows every year: somebody is bound to show up from Japan to remind one and all that his country is a "fish-eating nation." Well, that is still the truth, but not the whole truth: Japan is now also a beef-eating nation.

With import restrictions eased, frozen beef exports to Japan are booming. Ditto frozen pork sales. Nearby Korea has also become a major market for frozen meat from abroad, as increasing prosperity inspires consumers to try something new and different. There are also significant markets in Hong Kong, and even mainland China.

Both the United States and Australia are taking advantage of the new markets. During 1992, US exports of bone-in beef cuts to Japan increased from 8.9 million pounds and $17 million to 18.2 million pounds and $29 million, for example, while ham and shoulder cuts of pork jumped from 11.5 million pounds and $17.3 million to 28.7 million pounds and $43.5 million. Overall Japanese beef imports last year, frozen and chilled, were up 16.2% to 413,345 tons -- 215,455 from Australia and 184,890 from the USA. During the first part of this year, Australia outperformed the US in frozen exports: for the period from January through April, its frozen beef exports to Japan were up 11% to 10,559 tons, whereas US exports were off 17% to 13,631.

After last year's boom, beef consumption in Japan seems to have been slowed by the recession: a report by the Australian Meat and Livestock Corp. put it at 116,835 tons for January through May of this year, up only one percent from the same period last year, while domestic Japanese production during that period slumped from 69,782 tons to 61,390. But while frozen imports for the period were off six percent from 27,219 to 25,565 tons, chilled imports showed a 31% increase, from 37,528 to 49,331 tons. Chilled beef seems to be developing the same sort of quality and snob appeal it has long enjoyed in the US.

Frozen beef -- and pork, lamb and red meats -- have long been regarded as little but commodities in the United States. Americans are used to buying their red meats fresh, and in the poultry category, Frank Perdue built a market largely on denigrating frozen chicken as inferior to his fresh product. Turkey is the only strong frozen meat category at retail, and frozen chicken has been relegated largely to the institutional market. Murry's Steaks, which distributes frozen red meats from a plant in Forestville, Maryland, through its own chain as well as other retail outlets, has been pretty much a fringe phenomenon. Frozen sandwich steaks and hamburgers, while they have been in the cabinets for a long time, have never made any major headway, outside of a few markets in the Northeast.

Now along comes Rymer Foods of Chicago, Ill., with an upscale frozen meat program called Menu Maker that features a line of eight pre-seasoned, ready-to-cook entrees. It has already gotten an enthusiastic response from such major US chains as Safeway, Kroger, Lucky and Albertson's. Menu Maker offers consumers a kind of convenience they can't get at the fresh meat counter on one hand, or from traditional bulk packs, on the other. Rymer's entrees come in resealable bags, with individually-wrapped portions, so that consumers can use just what they need for a meal and keep the rest frozen. Of course that kind of convenience doesn't come cheap -- Menu-Maker steaks are typically being retailed at $10.99 for a bag of two steaks, although some chains are pricing all eight entrees uniformly at $9.99 as "family packs."

The whole line consists of Chicago Steakhouse Seasoned T-Bone (two portions per bag), Peppercorn Seasoned Boneless Beef Sirloin Strip (four portions), Teriyaki Seasoned Boneless Beef Ribeye Steak (four portions), Old Fashioned Pot Roast with Vegetables (four to six portions), Butter Seasoned Boneless Skinless Chicken Breast (nine portions), Lemon Herb Seasoned Boneless Skinless Chicken Breast (ditto), Teriyaki Seasoned (ditto), and Southern Style Fried Chicken (ditto). All come in classy packaging, with the borders in silver surrounding outstanding full-color product shots. "We needed something really vibrant -- graphics that would be both high-impact and tasteful, that would reach up out of the case and catch the shopper's eye," observed Jay Shapiro, Rymer vice president.

But packaging itself is only a means to an end. "Right when meat managers are looking for ways to enliven and add value to the frozen meat section, we're providing a new concept in meat retailing," Shapiro said. Menu Maker was first introduced in the Midwest in early 1992, at chains like Dominick's in Chicago. But many other regions have since followed -- the line can be found at Shaw's in the Boston area, Marsh in Indiana, Shop 'n Save in Maine, Lowe's in North Carolina, Publix in Florida, etc. Kroger has rolled it out in the Louisville, Kentucky, area, Vons and Albertson's around Los Angeles and Kroger on both coasts -- Safeway's Eastern Division, serving the Washington, DC, area, devoted a full page ad to Menu Maker in a truckload sale at Lake Ridge, Virginia on March 1. "People were plunking down $50 to $75 for a product that was really an unknown to them," beamed William Wood, director of sales and marketing at Rymer, and some came back to buy cases of the frozen meats before the weekend was over.

Aussies Target Japan

That's certainly positive feedback, and perhaps the reason the Australians are doing so well in Japan is that they're looking for market feedback, too. A study released late last year by the Australian International Business Centre at the University of Queensland showed, for example, that Japanese buyers prefer specific cuts rather than full sets, especially during the summer. The study also seemed to shed light on why chilled beef is doing better than frozen in Japan these days: it is perceived as fresher, "an attribute greatly prized by the Japanese consumer." Domestic Japanese beef has an image of better quality than imported, but US beef is more highly-regarded than Australian -- apparently because it is more typically grain-fed (grass-fed beef has a cheap, low-quality image, and Japanese look for lots of marbling and a bright cherry-red color).

But the Australians aren't about to settle for second-class status. Since at least 1988, the Australian Meat and Livestock Corporation has been promoting its country's beef in Japan, and its most recent consumer study shows a 92% "aided awareness" and a 32% "unaided awareness" of its Aussie Beef brand among housewives aged 25-45 in the key metropolitan areas of Tokyo, Osaka, Fukuoka and Sapporo. The purchase intention rate, at 14%, was higher than for any other imported beef, the survey found, and Aussie Beef is increasingly perceived in terms of value, quality and safety. Aussie Beef is now sold at more than 6,000 retail outlets, from supermarkets to butcher shops. Some chains have created private label beef lines incorporating the Aussie Beef logo; one example is Jusco, which has 175 stores and does an annual business of |yens~72.2 billion.

Nobuyuki Suzuki, meat merchandising manager for Jusco, told a World Meat Congress session in Sydney this past April that the average Japanese family spent |yens~97,654 (A$ 1,085, or US$ 800 at the then-prevailing exchange rates) on meat last year, or about nine percent of their food budgets. That compared with |yens~143,455, about 13.3% of the food budget, for fish and seafood. Beef itself accounted for only about 37% of family meat expenditures, at |yens~36,100, with pork taking 24.6%, at |yens~24.068; and chicken 12.8%, at |yens~12,487. But it is beef that is gaining, Suzuki said, whereas pork and chicken are losing. Tariffs dropped from 70% to 60% last year, and were cut again to 50% this year -- and even such slow reductions have spurred major gains in sales.

US Exports Rise

Although Quick Frozen Foods International hasn't accessed any figures on exports by Australia to Korea, the gain in US frozen exports to that country is impressive. Exports of boneless processed beef, for example, jumped from 16 million pounds and $26 million in 1991 to 48.4 million pounds at $72 million last year. For bone-in unprocessed cuts, the increase was from 4.8 million pounds and $6.5 million to 10.7 million pounds and $17.5 million (Yet bone-in processed cuts declined from 9.9 million pounds and $17.2 million to 4.7 million pounds and $9.6 million.). Mexico remained an important market for US beef, with shipments of bone-in unprocessed cuts alone of 7.2 million pounds and $10 million, but volume last year was off from 1991. In the same category, China more than doubled its imports, from 587,000 pounds and $1.5 million to 1.8 million pounds at $3.6 million, overtaking Canada. Hong Kong boosted its imports of bone-in unprocessed cuts, too, from 1.6 million pounds and $2.7 million to 2.3 million pounds and $3.8 million. Overall US beef exports, frozen and chilled, were up 11.5% last year to 601,000 tons, according to the U.S. Department of Agriculture, which predicted a four percent increase this year, to 625,000 tons.

Barriers in Europe

If the Pacific Rim is opening up to imports of beef and other meats, Europe is circling the wagons -- which isn't too surprising, since cold stores there have been stuffed for years with the burden of surplus "intervention" stocks that subsided to 110,000 tons in 1989 only to skyrocket to 870,000 tons last year. The European Community, with Sweden joining in, has been excluding Australian beef on the grounds that it is tainted with HGPs (hormonal growth promotants). Australia insists it has been monitoring its exports, to make sure that only HGP-free beef goes to Europe -- but last December, the EC decided that wasn't good enough. Stricter measures were introduced by Australian authorities Feb. 15 to try to make the Europeans happy -- now cattle certified by vendors as HGP-free are being painted with pink brands to identify them. Will that satisfy the EC? Maybe, maybe not. But Poland complained recently that the EC had banned imports of its slaughtered livestock and meat out of "health" concerns that Janusz Bylinski, vice minister of the Polish Agricultural and Food Ministry, called "groundless." Poland has eliminated hoof-and-mouth disease, the ministry's veterinary department pointed out, and EC inspectors who visited Poland in March didn't raise any objections to breeding or sanitary conditions.

If the message coming from the EEC seems to echo Marshal Foch in World War I ("They shall not pass!"), the message is different in the United States, where Robert L. Hendrickson of the American Meat Institute called for the repeal of a 1964 meat import law to protect US beef producers. Delivering a paper to The Refrigeration Research Foundation at its April meeting in Tucson, Arizona, he reported that "a recent study by the International Trade Commission suggested that the impact of quota restrictions on beef caused as much as $132 million in economic disruption for US processors, who cannot fulfill their needs for inexpensive lean meat trimmings and must use more expensive raw materials to fill demand." Imports from Australia and New Zealand, Hendrickson noted, account for less than four percent of the beef sold in the United States (The biggest import category last year, according to the Department of Commerce, was boneless unprocessed beef: Australia shipped 23.4 million pounds, worth $22.9 million; New Zealand 8.1 million pounds, valued at $8.7 million.).
EEC Government Intervention Meat Stocks

1986 1987 1988 1989 1990 1991 1992

500 690 380 110 610 700 870

Meat production in the US will increase by three percent this year, Hendrickson predicted, but most of that gain will be for pork and poultry. Health concerns, which the Japanese are evidently ignoring, are still putting a damper on beef consumption. And it isn't always easy to provide "healthy" alternatives. Hendrickson cited research at the University of Illinois, Kansas State University and Auburn University indicating that low-fat ground beef patties don't keep as well as the traditional kind -- they are quicker to lose their red color, develop off colors, become rubbery in texture, and go rancid. Low-fat ground beef is being tested by the Agricultural Marketing Service and the Food and Nutrition Service for use in school lunch programs, and only low-fat formulations found to be equal or superior to standard ground beef will be accepted.

Meanwhile, the US beef industry faces other headaches -- a much-publicized outbreak of food poisoning traced to hamburgers served a Jack-in-the-Box fast food restaurants, for example, and a demand for more nutritional data on packages for meat -- fat and cholesterol levels, etc. The e. coli outbreak prompted the new Secretary of Agriculture Mike Espy to call for sweeping changes in the meat and poultry inspections by the Food Safety and Inspection Service.

New Zealand Venison

New Zealand, which competes with Australia in both the beef and lamb markets, is now trying to do something completely different with a brand-name export program for venison. Cervena (from the Latin for deer, plus Grade A) was launched this year by the Ministry of Agriculture, and registered as a trademark in 40 countries. Venison exports had already more than doubled last year, from 12,000 to 28,000 tons, valued at US $95 million, but New Zealand wants to increase dollar volume to $170 million in four or five years. It is promoting venison as a "guilt-free red meat," presumably because it has less fat and cholesterol. In America, U.S. Bison Co. is using the same strategy to market buffalo meat: in a flyer called The Buffalo-Cholesterol Connection, it points out that fat content in typical cuts of buffalo meat is a fraction of that for equivalent cuts of beef -- 5.4 grams in a 100-gram serving of loin, vs. 20.2 in the same serving of beef sirloin, for example.

But nobody has yet driven a steak through the heart of the beef industry, and a number of countries are trying to build up their production. Sichuan province in Southwest China is making a bid to become the equivalent of Texas in the American Southwest -- nothing less than "the biggest meat producer in the country in less than a decade." Sichuan's output now totals five million pounds a year, largely pork, accounting for 30% of the province's overall agricultural output, but authorities want to raise that to 50% by encouraging new breeds of livestock and poultry, providing technical and marketing services, etc. In Israel, meanwhile, even though steak is beyond the pocketbooks of many consumers, Spector Yonah & Sons has opened a new plant in Lod to supply those who can afford it -- veal steaks at $7 for a five-pack are among the items packed.

Among other international developments, Canada is threatening to restrict imports of beef from New Zealand, which reached 10,000 tons for the December-February period, vs. 4,150 a year earlier. Naturally, New Zealand has protested -- it had sought Canadian sales more aggressively only because the US had imposed a $100 million-a-year quota on its beef. Beef exports are increasingly important to New Zealand, because bad weather did in lamb and sheep production last year, although it did drive up lamb prices to compensate. Australia, meanwhile, is worried that the European Community will insist on renegotiation of an agreement that currently bars subsidized European beef from the East Asian markets Australia considers its own. Australia and New Zealand themselves, meanwhile, compete for the sheep and lamb market in the Middle East -- Australia exported 50,000 tons there last year, New Zealand 96,000. But most of Australia's volume is in mutton to Arab lands, whereas most of New Zealand's is in lamb to Iran.

Food Industry Acquisitions Rise in USA, Says Report

Some 468 food business-related mergers and acquisitions took place in the United States during 1992, reflecting a 28% increase over 1991. So calculates the Food Institute in a 112-page report it recently released.

Among the findings: On the international front, the number of food industry-related acquisitions of U.S. assets by foreign firms dropped slightly to 28, compared to 29 the year before. At the same time, acquisitions of overseas assets by U.S.-based firms totaled 50, compared to 57 in 1991. U.S.-headquartered companies made more acquisitions in Canada (14) than in any other nation, but there were three deals each in Chile, Hungary, Mexico and Spain.

Merger and acquisition activity in a number of overall industry categories was well above the year before. They included: agricultural cooperatives, bakeries, diversified food processors, meat packers, packaging suppliers, poultry processors, restaurant and foodservice firms, snack food companies, soft drink bottlers, wholesalers and food brokers.
COPYRIGHT 1993 E.W. Williams Publications, Inc.
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Title Annotation:Meat Market Trends
Publication:Quick Frozen Foods International
Date:Oct 1, 1993
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