The History of U.S. Beef Exports to Japan
FAS Japan is writing a series of reports on the history of U.S. agricultural exports to Japan which have been published by a USDA Foreign Agricultural Service GAIN report.
30 April 2009
29 minute read
Introduction
Meat consumption in Japan does not have a long history, with Japanese historically relying on rice for calories and fish for protein. Japan only began importing U.S. red meat (beef and pork) in significant quantities in the late 1970s. Since that time, however, the U.S. share of the import market has increased and exports to Japan have “taken off like a rocket.” Imports of U.S. beef, for example, increased from 41 metric tons in 1968 to a high of 348,299 metric tons in 2000 while imports of U.S. pork rose from 7,589 metric tons in 1970 to a record 336,993 metric tons in 2008. To give this some perspective, imports of U.S. beef into Japan rose almost 850,000 percent in 33 years while imports of U.S. pork rose over 4,000 percent in 39 years. The unique private-public partnership between FAS and the U.S. meat industry as represented by the U.S. Meat Export Federation (USMEF), as well as a strong relationship between the U.S. meat industry and the Japanese food sector, has been essential for this amazing success story to unfold.
Japanese Imports of U.S. Beef (Metric Tons)
Source: Japanese Ministry of Finance
Japanese Imports of U.S. Pork (Metric Tons)
Source: Japanese Ministry of Finance
The Prohibition of Eating Meat in Japan
For over a thousand years prior to 1868 eating meat from four legged animals (and particularly beef) was officially prohibited in Japan. Buddhism was introduced into Japan in the 6th century and quickly spread throughout the country because of the influence of the imperial family and powerful clans. Buddhism frowned on meat eating because of its belief in reincarnation, where people could be reincarnated as animals. The second main religion in Japan is Shinto, which also frowned upon dealing with dead animals, believing that it pollutes the body. The Japanese believed that people who ate meat had to wait around one hundred days for their bodies to be purified again before they could pray at shrines or temples.
In April of 675, the Emperor Tenmu outlawed eating meat of four legged animals. For over a hundred years after the establishment of the law, the Emperor had to periodically reinforce this prohibition indicating that perhaps it was not well followed. By the 10th century, however, just about everyone had stopped eating meat.
Christianity was introduced to Japan in 1549 and many Christian missionaries brought with them Western cuisine that used beef and pork. The ban on meat was relaxed where these foreigners congregated, particularly in the southern island of Kyushu and the southern tip of Honshu, Japan’s main island. However, the prohibition on eating meat was reinstated and became particularly severe during the Tokugawa Shogunate, a feudal regime run by Shoguns from 1603 until 1868.
Japan isolated itself during this time from the rest of the world, banished Christianity, and reinvigorated Buddhist and Shinto culture. Through the following centuries, Japanese society formed prejudices against eating meat, associating it with “foreign barbarians.” They elevated farming and eating Japanese rice to a borderline religious experience. The influence of Buddhism and Shinto along with the need to protect draft animals for rice production also had a lot to do with this restriction. However, in mountainous areas where agricultural production was limited, wild fowl and game remained part of people’s diets.
Japan Changes Its Eating Habits
The School Lunch Program and Animal Protein
Just after the war, many Japanese were malnourished because of post-war food shortages. During the U.S. Occupation (1945-1952), the Supreme Commander of the Allied Powers (SCAP) worked to enhance the nutrition of the Japanese to improve their health and resistance to disease. New imported foods, such as wheat, corn, flour, butter, milk and meat, were introduced to Japan during this time. In December 1946, the U.S. and Japanese governments started a school lunch program. They wanted not only to provide food for malnourished children but also to teach them to acquire a taste for foods, such as powdered milk and meat, that they were unfamiliar with but would provide them with animal protein that their diets were deficient in. A total of 250,000 children in selected schools in Tokyo and Yokohama were fed a school lunch. It took school children some time to get used to these new foods. There was even an epidemic of a “mysterious disease” among children in the program. This “mysterious disease” turned out to be simply hives since children had become sensitized to animal protein from the school lunch program.
At the end of the U.S. Occupation in 1952, eight million children were participating in the school lunch program. SCAP officials, however, were concerned that once the Occupation was over, the Japanese would not be able to continue the program because the school lunch program would need large amounts of food imports. USDA not only helped the existing school lunch program meet the need for food imports but it was also able to help expand the program. In the mid-1950s, much of the food for the expanded program came from USDA’s P.L. 480 donations. Some of the large breakthroughs in sales of U.S. commodities in Japan came through the school lunch program with surplus food provided by P.L. 480. Moreover, through the school lunch program, Japanese became accustomed to eating animal protein that led to the tremendous success the U.S. meat industry would experience years later.
The Mechanization of Rice Production
Source: Kuniharu Kiyomiya
Although the Japanese government had attempted to advance the meat industry since the Meiji period, it was relatively small until well after World War II. From a small base Japanese consumption of beef grew quickly beginning in the early 1960s. Because of the economic boom that started with the Korean War, people could now afford the luxury of eating meat. Japan’s cattle were primarily used as draft animals until the 1950s and 1960s when field cultivation shifted to motor power. However, many of Japan’s small farmers retained this draft breed (Wagyu) as beef animals to be fattened for market and slaughtered. Wagyu is highly marbled meat and intensive grain feeding and a long fattening period allows for this high degree of marbling. Japan lacks pasture land and feed grain crops. Grain feeding from imported feed grains from the United States, therefore, has allowed cattle fattening to proceed beyond Japan’s own feed sources.
The Japanese Government’s Restrictive Meat Import Policies
Since World War II, Japan has developed one of the worlds most highly protected domestic agricultural sectors, with the beef and pork industries no exception. The import restrictions have made meat products very expensive for Japanese consumers and inhibited demand. From 1962 to 1991, for example, the average per capita consumption of beef was only 4.2 kilograms compared to 32.39 kilograms for fish.
From the war’s end until 1950, Japan food and agricultural imports were regulated by SCAP, with imports only allowed for food aid. From 1950 until 1954, the Government of Japan strictly regulated trade and meat imports were essentially banned. For a time after 1954, Japan was able to import beef without strict foreign exchange controls; however a 10 percent tariff was imposed by the Japanese government. In 1957, there was a surge of imports and the government became worried about speculation in beef imports. Thus, from 1958 until 1963 the government imposed a quota system based on value and the Fund Allocation (FA) system, which allocated scarce foreign exchange for imports. Importers tended to import low quality beef to maximize the quota.
In 1964, as a requirement of joining the International Monetary Fund (IMF), Japan stopped using the FA system as its principle means to restrict imports and protect domestic industries. Beef and pork imports became subject to an import quota (IQ) system. The in-quota import tariff for beef was raised to 25 percent and the quotas began to be based on volume instead of value. The in-quota import duty for pork was established at 20 percent. In addition, strict quarantine regulations were imposed to restrict trade.
Until 1968, Japan imported a negligible amount of pork as domestic production met demand. However, imports in 1968 jumped to 10,000 metric tons, with the United States supplying 85 percent. The increase coincided with a pork promotion campaign by the U.S. Feed Grains Council. Early in 1969, in an attempt to lower high prices, Japan expanded the import quota. In September 1969, after two successive quota increases, pork imports rose to a high of 50,000 metric tons. The United States was unable to fill the quota with U.S. pork because of high domestic meat prices, and Japan turned to other countries such as Taiwan, Canada, and New Zealand to fill the quota.
On October 20, 1971 because of negotiations in the Kennedy Trade Round, Japan’s pork trade was liberalized. Import quotas were removed and replace by a variable levy with a gate price that was established each year based on average prices the prior year. In 1995, because of the Uruguay Round Agreement, the gate price of the variable levy system was fixed and then gradually reduced until 2000 which is still the current level. If pork imports are valued at or above the gate price, then they pay only the simple tariff (4.3 percent in the case of fresh, chilled, or frozen meat). If their value is lower than the gate price, the importer must pay the difference between the import value and the gate price as a duty, in addition to the tariff applied at the gate price value. This system has been controversial and creates an incentive to exporters and importers to structure shipments with an average CIF value at or above the gate price. In 1995, the pork “safeguard” system was also introduced to protect the Japanese market from sudden surges of imports.
In 1961, the Price Stabilization Law for Livestock Products created the Livestock Industry Promotion Corporation (LIPC), which was responsible for the administering government policies on livestock. LIPC also had important trade functions, administering Japan’s variable levy on pork imports and acting as the principal importing agent for beef. LIPC specified the cuts to be imported without always making reference to where the market demand might exist.
Prior to liberalization of the beef market, LIPC tightly controlled imports through the beef quota. Thirty six firms were eligible to import beef under the quota system and foreign companies that wanted to export beef to Japan had to be on the Preferred Brand List. The majority of imported beef was purchased and sold through LIPC. In fact, by 1984 LIPC controlled about 80 percent of Japan’s beef imports. LIPC remained the key buyer until the simultaneous buy-sell system (SBS) was implemented and expanded in the coming years.
Japan was also not always a reliable market for the U.S. beef industry. For example, the government more than doubled the size of the quota in 1973 from 1972 to hold down beef prices and reduce inflation. However, wholesale feeder calf prices collapsed because of rising feed costs, and the Japanese government issued no new quotas from late 1973 until the second half of 1975. LIPC officials feared that Japanese producers’ returns would be severely impaired by high feed costs coupled with cheap imported beef. Imports did not recover until 1979. In 1975, after resuming the quota, the Japanese government announced a system of annual amounts to be imported from exporting countries such as the United States. Until 1978, the United States exported little beef to Japan, usually less than 10,000 metric tons per year. However, the Strauss-Ushiba Understanding of 1978 between the United States and Japan allowed for an increase in the quota for high quality (HQ) grain fed beef from 16,800 MT in 1978 to 30,800 MT in 1983.
USMEF
The Early Years (1977-85)
USMEF was established on February 20, 1976 and opened its first international office in Japan in November 1977. USMEF was created by a casual meeting in 1975 between David Hume, the Administrator of FAS, and Bill McMillan of the National Cattlemen’s Association (NCA). McMillan was to lead a U.S. trade delegation to Australia. During the conversation, Hume told McMillan he should add Japan as part of his itinerary on his team’s trip to Australia. On that recommendation, McMillan and his group visited Japan. He came back thrilled with the prospects in Japan, having become “absolutely convinced of the need to create an aggressive market development program for U.S. red meats.” In February 1976, just a few months after the conversation between Hume and McMillan, USMEF was established and became an FAS cooperator.
In 1977 the trade organization opened its first overseas office in Tokyo. As the USMEF press release stated at the time of the opening, “Tokyo was chosen for the group’s first foreign location because of the good transportation links with other Asian countries and because of opportunities for meat sales in Japan itself. The Japanese have a large and growing taste for U.S.-type fed beef, and were it not for government-imposed import quotas, U.S. beef interests believe they could substantially expand exports to Japan. There is also opportunity for pork producers.” With the tremendous success of U.S. red meat in the Japanese market over the next 30 years, perhaps they actually under estimated the opportunities in Japan for U.S. beef and pork.
USMEF began promoting American HQ beef in Japan. USMEF hosted an initial meat study team from Japan to the United States and participated in its first international trade show, Tokyo’s American Food Festival and the Osaka International Trade Fair. It was at the Osaka Fair that “a near riot” broke out as “beef hungry consumers found American grain fed beef about half the usual Japanese retail cost. In just 12 days, nearly 650,000 people visited the MEF booth and purchased 10 metric tons of U.S. beef.”
From the beginning, market access issues have always been linked with marketing efforts for USMEF in Japan. In the fall of 1978, for example, a USMEF trade delegation led by USMEF Chairman Baxter Freese visited Asia, including Japan. Freese reported on his return his concern about Japan’s trade restrictions and quotas on U.S. beef producers.
In 1979, LIPC opened up an office in Denver to strengthen its ties with USMEF. In 1980, Japan extended its “voluntary restraints” on pork imports, first imposed in November 1979, because of continued overproduction of pork in Japan. USMEF sent its first four-member pork study team to Japan in 1980 and hosted a U.S. study team from Japan’s Ham and Sausage Manufacturer’s Association. In 1980, the U.S. trade association began publishing Frontier, a quarterly Japanese language magazine designed for the meat trade, media and the government.
After some deliberation, in 1981 Japan lifted its restrictions on pork imports. U.S. pork exports to Japan jumped 160 per cent during the first four months after the restrictions were lifted. In 1982, Japan temporarily banned Danish pork because of the outbreak of foot and mouth in Denmark. USMEF responded by hosting a technical seminar in Tokyo and by publishing Pork from the USA- A Japanese Buyer’s Guide, a first of its kind Japanese language purchasing guide.
At the same time, USMEF was instrumental in negotiating concessions from the LIPC to make beef trade less restrictive. The U.S. trade association also set-up an American Meat Cooking School for the Tokyo Housewives’ Association and conducted U.S. meat seminars throughout Asia.
In 1983, USMEF stepped up its efforts to create visibility for U.S. beef by co-sponsoring a U.S./Wagyu beef tasting contest with the Victoria Station Restaurants, which was televised to more than 3.3 million viewers. The federation also initiated informal seminars for importers and meat handlers where member companies could demonstrate their range of products. In 1984, the United States and Japan concluded the Brock-Yamamura Agreement that increased HQ beef imports by 6,900 metric tons a years over a four year period. Immediately following the agreement, USMEF started to work on technical issues. The trade association negotiated a selfcertification provision to reduce USDA inspection fees. The provision allowed U.S. meat plant personnel to certify product specifications, a task previously performed by USDA inspectors. In 1984, the federation also released an expanded version in Japanese of the publication Variety Meats from the USA – A Buyers Guide.
USMEF developed the idea of a simultaneous buy-sell scheme (SBS) that allowed U.S. meat suppliers to negotiate directly with end-users on 10 per cent of Japan’s general beef quota. The complicated distribution system for beef had been an impediment for U.S. beef exports to Japan. A U.S. beef supplier would sell to an importer, who would then sell to a distributor, who might next sell to another distributor or to a processor, who would finally sell to the retailer in the foodservice industry. This process made it impossible for U.S. sellers to meet his or her buyers or cater to their purchasing needs. With a simultaneous buy-sell system (SBS) established in Japan, the buyer and seller would get together without a middleman.
The first SBS beef import tenders with Japan took place in 1985. Foreign suppliers and Japanese buyers simultaneously submitted quota bids. Quotas were then allocated in descending order to foreign suppliers with the lowest bids and the Japanese buyer with the highest bids. It was a major change in the system since LIPC did not specify the quality of the imported beef, but until 1988 the SBS system only applied to frozen beef so LIPC still provided protection to domestic producers.
To make sure the system worked properly, USMEF provided its members with information on the mechanics of the SBS system, market data and the names of Japanese end users. USMEF’s Technical Committee reviewed the system and offered suggestions on its improvement. Phil Seng, USMEF Tokyo Director at the time, and Mark Gustafson, Vice President of Technical Services, presented these suggestions directly to the Japanese during technical trade talks held in Tokyo.
USMEF undertook two major studies on the Japanese meat market that laid the groundwork for increased market development activities in the country. In December 1984, USMEF completed The Japanese Beef Market – A Study of Opportunities for MEF Member Firms. In November 1985, the trade association completed the companion publication The Japanese Market for Pork and Pork Products. These publications detailed production, consumption, imports and the distribution system for beef and pork and strategies to improve U.S. sales in Japan. USMEF also held technical seminars in Tokyo designed to educate the Japanese meat trade on U.S. meat terminology, quality control standards, and product specifications.
USMEF continued to build relationships with key Japanese trade groups. They developed retail promotions with the Stamina Food Stores in Japan helping to expand the market for variety meats. In addition, in April 1985, the Japan Restaurant Association (JRA) along with USMEF and the U.S. Embassy successfully conducted an eight day exhibition and sales of American HQ beef at the Tokyo International Exhibition. The Exhibition drew more than 400,000 visitors. Through exhibitions like this, JRA members dramatically increased their purchases of American HQ beef.
Years of Opportunity and Growth (1986-1999)
The 1985 Farm Bill authorized the Targeted Export Assistance (TEA) program, which made funding available to U.S. producer groups in promoting exports that were subject to unfair trade practices in overseas markets. About the same time that the TEA program was developed, the U.S. beef and pork industries adopted a checkoff program. These new funds allowed USMEF to aggressively promote U.S. red meat in Japan, and their work made a difference.
Japan was also becoming more receptive to imports. On July 30, 1985, Prime Minister Nakasone reversed a 30-year policy of economic led export growth by stating that future growth should be based on domestic demand. Because of the trade imbalance, he urged Japanese to buy imported goods.
Much of USMEF’s planning was based on the belief that domestic beef producers would not be able to keep up with growing consumption. In addition, there was tremendous opportunity for U.S. pork. The value of the processed pork market was $2.3 billion in 1985, but only 0.5 per cent of this amount came from imports. USMEF believed that it was very important to use the TEA program to help identify U.S. products in the market and create continued demand for U.S. red meat.
USMEF believed that the beef quota system was the major constraint to U.S. beef exports to Japan. One of the major impediments within the quota system was the Japanese government’s downplaying of country of origin of imported beef. Buyers had no way of knowing where the beef came from and consumers had no way of choosing American beef. USMEF believed it was imperative to use TEA funding to help build demand for U.S. beef in Japan, which could be used as leverage during the 1988 U.S.-Japan beef negotiations.
USMEF received its first allocation of TEA funds in 1987. In fact, the trade association allocated all of its TEA funds to Japan during the first few years of the program based on Japan’s potential for U.S. red meat. The federation targeted the Japanese trade and consumers, using a three pronged approach of trade and consumer advertising, sales promotions, and public relations. USMEF’s public relations campaign included “Delicious American Meat” and “Why?” campaigns. The “Delicious American Meat” advertisements on television and magazines conveyed a strong U.S. image of the delicious taste and the high quality of American meat. The “Why?” advertisements were concentrated in newspapers, carrying the themes of U.S. beef being tasty, healthy and popular. It also asked the question why beef was so expensive in Japan.
While not explicitly critical of the Japanese government or LIPC, through its public relations campaigns USMEF was able to draw attention to the restrictive quota system and its impact on beef prices. Criticism of the quota system and LIPC came from Japanese journalists whose interest was piqued by the campaigns. Moreover, because of the importance of the trade issue, USMEF was able to create extensive television, newspaper and magazine coverage of its many seminars and promotions.
The U.S. trade association was also sensitive to the fact that it needed to work with the Japanese trade to develop the market. To facilitate relations with the trade, USMEF developed chain store, department store, restaurant and hotel promotions, and attended international shows, and trade seminars.
In June, 1988, the U.S., Australian and Japanese governments signed the Japanese Beef Market Access Agreement (BMAA). The objective of the agreement was to ensure access for imported beef by replacing the quota with tariffs. The Agreement began a phase-out of the quota system from 1988-90 until tariffication went into effect on April 1, 1991. The agreement called for a 60,000 metric ton annual increase for the first three years, increasing to 394,000 metric tons in 1990. The 25 percent in-quota tariff was replaced by tariffs of 70 percent in 1991, 60 percent in 1992, and 50 percent in 1993 and afterward. The U.S. government was successful in negotiating for completely commercial trade, with no LIPC involvement, and no high-quality beef requirements.
USMEF marketing activities prior to the agreement had positive market access implications. According to a GAO report on U.S. market development activities, in 1987 and 1988 USMEF used TEA funds to persuade trade groups and Japanese consumers to be more receptive to U.S. meat by conducting television, magazine, and newspaper promotions. The Director of the ATO at the time credited USMEF activities with expediting the BMAA.
Under the quota, LIPC preferred to import frozen beef that was more suited to the operations of the organization than chilled beef. With frozen beef, LIPC could store it to help stabilize domestic prices. Because Japanese consumers like well marbled, chilled beef, and because frozen beef did not meet the high quality demanded by Japanese consumers, the LIPC was able to protect the domestic beef industry from foreign competition.
With the liberalization of the beef market, imports of chilled beef could compete more effectively with fresh Japanese-raised beef, and command a higher price. However, USMEF realized that to take advantage of this situation, the United States had to improve its quality assurance and hygiene standards. In preparation, USMEF funded studies in the mid 1980’s on chilled beef at Texas A&M University and chilled pork at Iowa State University. With the useful information from these studies, U.S. firms quickly developed and adopted methods of sending chilled beef and pork to Japan by ship, rather than by air, reducing the transport cost substantially. USMEF also conducted the first chilled pork demonstrations in Japan at Inageya around this time.
During the second year of the TEA program in 1988, USMEF introduced the branded products promotion program. Working under USMEF, individual packers were able to design activities that would generate direct contact between the U.S. and Japanese industries. In early 1988, USMEF opened up the first U.S. Meat Corner in the Mitsukoshi department store. By December there were 500 U.S. Meat Corners in Japan and the program spread to Hong Kong and Saudi Arabia.
USMEF went from concentrating their efforts in the major centers of Tokyo and Osaka to promoting U.S. beef and pork in the rest of the country. The federation identified key players in the market, educated these players on U.S. beef and pork, and then handled joint promotions with them. The trade association not only promoted U.S. red meat in the different areas of the country but also in the different segments of the food sector. For beef, USMEF identified hotels, supermarkets, and restaurants as the sectors with the most long-term potential. For pork, it was primarily supermarkets, ham and sausage manufacturers and alternative markets. USMEF worked with Japanese retailers to develop 15 different cuts of pork for the 1994 American Pork Campaign called “Shunto.”
In 1996, Japan suffered its worst food poisoning outbreak since World War II. While the source of the contamination was unknown, the federation responded with perhaps the most comprehensive food safety campaign USMEF had ever undertaken to reassure Japanese consumers and trade that U.S. meat was safe and wholesome. With education the main focus of the campaign, the federation held a series of seminars for retailers, distributors, food service institutions to highlight the steps taken in the United States to produce safe meat. This program was used as a prototype for other markets such as Korea.
Beginning in the early 1980s, USMEF persuaded U.S. packers to set up offices in Japan to be able to get ready for the eventual opening of the beef market. By the time the beef market was open in the early 1990s, all the major U.S. packers had offices in Japan.
With the guidance of USMEF, the U.S. meat industry has been able to sell containers of individual items to Japanese buyers. The competition tends to sell full sets (all the cuts from a beef carcass), not giving the Japanese customer the specific items they desire. The ability to supply product on a cut basis, rather than full-sets, is still a large advantage for the U.S. industry.
In early 1997, the United States was able to capture Taiwan’s share of the Japanese chilled pork import market after the Office International des Epizooties (OIE) confirmed that Taiwan had foot-and-mouth disease (FMD), a viral disease that affects cattle and swine. Japanese imports of U.S. pork grew from around 136,000 metric tons in 1996 to 160,000 metric tons in 1997, an increase of almost 18 per cent.
The Decade of Challenges (2000-2009)
The Anshin (anxiety free) Campaign
In September 2001, BSE (bovine spongiform encephalopathy or mad cow disease) was discovered in Japan with a resultant drop in beef consumption. USMEF went right to work on this issue with a research-based strategy to recapture Japanese demand for beef. The Anshin campaign was designed to shift the media focus from the dangers of BSE to the different preventative measures taken by the Japanese and the United States. To reinforce the success of the partnership between industry, government and science in ensuring that U.S. meat products are safe and wholesome, USMEF conducted a food safety seminar in Tokyo in September, 2001. It also hosted a media conference in October with more than 60 members of Japan's consumer media.
USMEF established a Food Safety Bureau (which later became the Consumer Bureau) to monitor the media, correct misinformation and conduct a proactive safety information campaign. The Food Safety Bureau took a multi discipline approach on meat products based on cooperation between the industry, the government and academia. Today, the Bureau is the primary vehicle to monitor media, correct misinformation and conduct its proactive safety information campaign. The Bureau works closely with traders and consumers.
USMEF also developed and placed consumer ads for a circulation of more than 26.7 million. The ads reiterated key safety messages and reassured Japanese consumers that U.S. beef is safe, tasty and nutritious.
The “Desire Beef” Campaign
In March 2002, USMEF launched the Desire Beef Campaign (Aisareru Beef). Research had shown that food safety was the primary concern for Japanese consumers, even before BSE, and that women were the primary decision makers for family meals. Another important finding was that Japanese women wanted someone they could relate to, particularly other women.
USMEF set out to find three women to represent different parts of the U.S. beef industry and to effectively communicate with Japanese women. The goal of the campaign was to deliver the messages of safety, taste and nutrition to Japanese mothers who have children living at home and who are the decision makers on meals. The full-scale campaign ran through the later half of 2002. It featured print ads in two major Japanese newspapers in March and April and targeted women’s magazines April through June. Commercial advertising was featured on selected television networks April through September.
In August 2002, Yu Hayami, a wife, mother and celebrity, became the spokesperson in Japan for the campaign to carry the message “woman-to-woman.” Part of the campaign included the publication of a 98-page color cookbook, “American Beef Cooking: Yu Hayami’s Party Recipes and Daily Menu,” which was available at more than 3,000 bookstores in Japan.
USMEF also worked with USDA’s Secretary of Agriculture Anne Veneman to hold a cooking event at Akasaka Elementary School and hosted Food Channel and Hiyoko Club editors and producers in the United States to provide information on the safety and nutrition of U.S. beef, especially how it relates to child development. The campaign continued until 2003.
“We Care” Campaign
In December 2003, Japan imposed a ban on U.S. beef imports because of the first U.S. case of BSE, which was found in Washington State. While the market was partially reopened two years later to beef from cattle 20 months of age or younger, the loss of the number one export beef market was a huge blow to the U.S. beef industry.
Once the beef market partially reopened, the U.S. trade found a different environment in 2006 to the one in 2003. There was low consumer enthusiasm, increased competition and skeptical importers. USMEF acted quickly and decisively to help rebuild confidence with consumers and the trade. In August, 2006, the federation launched the “We Care” campaign. This multi-faceted campaign stressed the “pull” component directed at consumers and the “push” element directed at the trade.
The USMEF “We Care” campaign was designed to address the concerns of Japanese consumers that were discovered through research undertaken by the trade organization. For example, USMEF knew from its research that Japanese consumers would look for ‘clues’ to safety, such as their government’s acceptance of U.S. beef for import. Purchase decisions, however, would rely more on their confidence in the retailers and restaurateurs selling U.S. beef, on the experiences of fellow consumers and their impressions of how sincere they believed U.S. producers were in providing only safe product to Japan. “We Care” therefore incorporates these elements together to tell the story of U.S. beef safety, quality, taste and price, all factors the USMEF research found would impact decisions. Most important, it highlighted how people in every aspect of U.S. beef production care about the products they produce for themselves and their customers in Japan.
Another challenge that faced U.S. beef was from increased competition, particularly from Australia. The country had increased their checkoff and completed a major retail promotion featuring a well known cooking instructor. But as USMEF stated “after 30 years of building this market, USMEF plans to be aggressive about taking it back.”
The strategy was supported through newspaper ads, a wecare.jp website, a consumer virtual tour, “We Care” local barbecues and media events. One of the first media events for the “We Care” campaign was a beef promotion event in late August, 2006, where consumers could choose between American, Japanese or Australian beef. The event took place at Shinjuku station, the busiest train station in Tokyo. The consumer theme of the promotion was “Beef Itself Is Safe.” The Metropolitan Meat Trade Association, which represents Tokyo butchers, sponsored the event. It featured 500 free samples of beef from Japan, Australia and the United States. U.S. beef was the first to “sell out” and the U.S. booth attracted the most visitors. USMEF also distributed 1,500 fans and balloons featuring the “We Care” campaign. USMEF also planned a reception on September 19 at the premier Hotel Okura for the Japanese trade to thank them for their loyalty to American beef, which featured a speech from the U.S. Ambassador to Japan.
Another issue USMEF needed to address was the fact that some importers were reluctant to buy U.S. beef because of perceived risk. The trade strategy was to convince retailers and foodservice buyers who were hesitant to purchase U.S. beef by demonstrating that the product is safe, there is consumer demand, and there are opportunities for profit. USMEF implemented this strategy through buyer team visits to the United States, a beef caravan that visited cities throughout Japan, a trade version of a virtual tour, a book that took a closer look at approved U.S. packers, retail and hotel promotions, point-of-sale materials, and a reception for leading buyers at one of Japan’s premier hotels with U.S. industry representatives.
USMEF attempted to rebuild as much of the Japanese market as possible and maximize the value of beef exports while utilizing a smaller number of beef cattle. Since the bulk of the pre-ban exports came from 4 or 5 cuts, USMEF developed 17 new, unique cuts that would appeal to Japanese consumers and help repair sales.
The “We Care” campaign has been successful in rebuilding demand for U.S. beef in Japan. In 2008, imports of U.S. beef increased almost 60 percent over 2007 levels to 54,109 metric tons, worth $382 million. Acceptance of U.S. beef among consumers, who generally prefer the taste of marbled U.S. beef, continues to increase. Negative sentiment toward the U.S. beef safety system decreased from 72.5 per cent in April 2006 to 36.6 per cent two years later, comparable to pre-BSE levels. In addition, over 11,000 locations in Japan including all major national and many large regional and local retail chains have reintroduced U.S. beef, with sales only limited by supply. The supply limitation will be addressed by USMEF’s foreign market development partner, the U.S. government.
Innovative Pork Promotions Lead to Success in the Japanese Market
Pork imports from the United States have steadily increased over the last 20 years, making Japan the number one export market for U.S. pork, trade worth well over one billion dollars a year. This success has been in no small part due to the activities of USMEF in Japan. The federation has created campaigns to increase awareness of the quality and value attributes of U.S. pork to build consistent demand that is not based on price. In early 2007, for instance, USMEF started a daily menu campaign with the release of the “Mainichi Oishi American Pork 30” (American Pork- 30 Delicious Recipes for Everyday). The cookbook was created by Makiko Fujino, a well-known cooking instructor in Japan and a highly regarded member of Japan’s parliament. Many of these recipes were also featured on the USMEF website. The recipes also appeared in newspaper ads with Fujino, retail menu cards and in other professional materials for summer events.
In November 1, 2008, USMEF-Japan launched the U.S. pork “Erabarete No. 1 — Selected No. 1 (by you)” theme, which highlights the fact that the United States is the leading supplier of imported pork in Japan. As Greg Hanes, USMEF Japan Director, said about the campaign, “Since consumers are getting the message that U.S. pork really is ‘everyday delicious,’ we wanted to take the campaign to the next level, play upon that success and thank Japanese consumers for selecting us.”
The campaign was launched with advertising on train lines throughout the Tokyo metropolitan area. With almost 20,000 posters and more than 10,000 door stickers spread over 24 different train lines, the campaign was expected to generate more than 600 million viewings in a city of 10 million that travels by train. The ads also introduced a new No. 1 logo that had a prominent place in national supermarket promotions in November and December.
Looking to the Future
According to USMEF, pork is the fastest growing protein consumed by Japanese consumers and consumption continues to expand, especially as seafood consumption declines. With a pork self sufficiency rate of just 51 per cent, Japan is forecast to remain the world’s largest importer over next 10 years – representing 25 per cent of global imports and 45 per cent more in volume than next largest importer. Once the restrictions are eased for U.S. beef, USMEF anticipates Japan will return to pre-BSE levels within 3 years, and annual exports would reach $1 billion before this time.
Today, Townsend Harris would be able to have a steak dinner anywhere in Japan or go to the local grocery store to purchase milk. Japan is now an essential market for U.S. meat exports. The private-public relationship between USDA and USMEF and the close working relationship between the U.S. and Japanese trade will continue to create tremendous opportunities for U.S. meat exports in Japan in the years to come.
Further Reading
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May 2009
