Japan Beef Post BSE

1
Japan Beef - Post BSE

• November 2001

2
USMEF Beef Spending10.5 million global budget
3
Japans Faltering Economy

• Negative GDP Growth
• Increasing Public Debt
• Low Investment/Capital Expenditures
• Rising Unemployment
• Deflationary Prices
• Weak Consumption
• Falling Trade Surplus/Export
• Incomplete Structural Reform

4
BSE in JapanChronology of Mismanagement

• January 2001 MBM imports from EU banned
• Spring 2001 Japan dismissed EU ranking of
• Japans BSE risk
• Sept. 11 MAFF announces Suspected BSE cow
• slaughtered Aug. 6, 01
• Sept. 12 MAFF admits outbreak could relate to
• lax policies toward BSE
• Sept. 16 MAFF says suspect cow processed
• into MBM, not destroyed
• Sept. 18 MAFF tracks MBM distribution and
• cattle from infected herd

5
BSE in JapanChronology of Mismanagement

• Sept. 18 MAFF bans MBM in Cattle Feed
• Sept. 20 MAFF announces mass BSE testing to
• start in 1 month
• Sept. 22 MAFF and Health Ministry bicker over
• Risk level
• Sept. 23 BSE confirmed through UK tests
• Sept. 26 Temporary MBM import ban
• announced
• Sept. 27 PM publicly criticizes MAFF over
• mishandling BSE

6
BSE in JapanChronology of Mismanagement

• Oct. 2 All MBM imports, production and sale
• banned from 10/4
• Oct. 5 Health Ministry asks for recall of
  consumer
• products with risk Material MAFF
• announces plan to make cement with MBM
• Oct. 12 Suspect 2nd Case Processed 10/9 before
• negative test outcome
• Oct. 18 suspected vCJD case reported
• Oct. 19 BSE testing starts of all cattle No
• announcement of suspected cases
• Japanese beef safest in world
• Oct. 24 Publics belief on GOJ BSE statements
• falls to 8

7
Japan BSE ImpactBeef
8
Japan Beef Imports BSE Impact
Without BSE
With BSE
9
Japan US Beef Import Forecast
Without BSE
With BSE
MEF Estimate
10
Japan Food SafetyIssues

• May 1996 E-Coli O-157 Outbreak (8 people died and
• 10,322 people affected )
• Feb 1999 Spinach produced in Saitama reported to
• contain high density of dioxin
• June 2000 Snow Brand milk causes mass-food
• poisoning (staphylococcus, 14,000 people
• affected)
• July 2000 Foreign materials found in food
  products
• (many cases reported after SB contamination)
• May 2001 O-157 found in from beef products of
  Takizawa Ham
• Sep 2001 First BSE outbreak in Japan

11
Japans Beef IndustryBefore After
After
Before

• No MBM regulation
• No BSE inspection
• No registry system

• Complete Ban on
• MBM usage and import
• BSE inspection
• on all 4,500,000 cattle
• Mandatory traceback

BSE
12
BSE Impact
Foodservice
Yakiniku BBQ
Retail
USMEF research
13
Nationwide Retail ChainA Retailer
Pork
Imported Beef
Domestic Beef
USMEF research
14
Nationwide Yakiniku BBQ Restaurant Company
Imported Beef
Domestic Beef
USMEF research
15
Japan Slaughter Number Market Price
Slaughter
Wagyu Price
16
BSE in JapanUSMEF Action

• Sep 10 First suspected BSE case in Japan
  reported
• Sep 11 Statement on US preventive measures
  against BSE
• and BSE QA released
• Sep 21 Food Safety Seminar
• Oct 5 Press Conference inviting around 60
  media
• emphasized US as BSE-free, Safety of US beef
• USDA/APHIS Statement the US as BSE-free
  country
• Oct 13-14 Safety Newspaper Advertisement Asahi,
  Mainichi,
• Yomiuri, Sankei, Nikkei, Tokyo and Daily
  Yomiuri
• Oct 18 US Beef Anshin Campaign started

17
USDA/APHIS Statement
18
USMEF Advertisement
19
MLA Advertisement
20
McDonalds Advertisement
21
US Beef Anshin Campaign
Campaign Guide
Anshin Anxiety-Free Statement
22
POP Materials (Sticker)
HRI
Retail
23
POP Materials
Shelf Talkers
Table Tent
24
Campaign Participation

• Company Outlets
• Retail 161 14,161
• HRI 43 2,318
• Nakashoku 2 393
• Total 206 16,872

As of Oct. 30
25
Yoshinoya Ad
26
CVS Lawson Obento
27
CVS Lawson Gyudon Beef Bowl
28
HRI Table Tent HRI Sticker Don
29
Japan US Beef Import Forecast
Without BSE
With BSE
MEF Estimate
30
Post BSE JapanElements of a Phase II Campaign

• Beef Focused
• Japanese 3rd Country Stakeholders
• Positive Focus e.g. Nutrition, Taste,
  Convenience
• Direct-to-Consumer Mass Media (TV Newspaper)
• Timing Integrated with Ongoing USMEF Safety and
  Promotion Campaign
• US 8 million

31
Phase IICampaign Options

• All Beef
• Imported Beef Only
• U.S. Beef Only

32
Japan Beef Supply Demand
Source MAFF
Carcass Weight Equivalent
33
Strategic Questions

• What is the potential to increase total beef
  demand?
• Is a multinational generic beef effort an
  effective way to push consumer buttons?
• What emerging food trends will be demand drivers
  for U.S. beef?
• What is the medium to disseminate food safety
  messages?

34
Japan BeefObjectives

• Raise consumer confidence in the safety of U.S.
  beef and the U.S. beef production system, and
  strengthen consumer perceptions and receptivity
  to U.S. beef with respect to product quality,
  nutrition and taste.
• Achieve continuous purchasing and handling of
  U.S. beef with traditional importers and food
  distribution companies, as well as expand the
  range of cuts they purchase.

35
Japan BeefObjectives

• Raise consumer confidence in the safety of U.S.
  beef and the U.S. beef production system, and
  strengthen consumer perceptions and receptivity
  to U.S. beef with respect to product quality,
  nutrition and taste.
• Achieve continuous purchasing and handling of
  U.S. beef with traditional importers and food
  distribution companies, as well as expand the
  range of cuts they purchase.
• Increase purchasing of U.S. beef in the HRI
  sector.

36
Japan BeefObjectives

• Raise consumer confidence in the safety of U.S.
  beef and the U.S. beef production system, and
  strengthen consumer perceptions and receptivity
  to U.S. beef with respect to product quality,
  nutrition and taste.
• Achieve continuous purchasing and handling of
  U.S. beef with traditional importers and food
  distribution companies, as well as expand the
  range of cuts they purchase.
• Increase purchasing of U.S. beef in the HRI
  sector.
• Expand U.S. beef distribution to more regional
  supermarkets and cooperatives outside of the
  major metropolitan areas.

37
Japan BeefStrategies

• Raise the health and nutrition advantages of
  consuming beef in general, highlighting the
  safety of U.S. beef.
• Assure the beef trade and consumers in Japan of
  the safety of U.S. beef.
• Develop and implement customized activities
  addressing specific customer requirements and
  needs.
• Accentuate the extensive range and versatility of
  U.S. beef products available and the variety of
  applications for U.S. beef in fast growing food
  sectors (i.e., HMR, CVS fast food). Facilitate
  the development of customized meal/menu solutions
  utilizing U.S. beef.

38
Japan BeefStrategies Continued

• Work with leading restaurants and hotels to
  increase the presence and variety of U.S. beef
  menu items they serve and to promote the quality,
  safety and value of U.S. beef.
• Demonstrate the profitability through
  merchandising solutions of featuring chilled
  U.S. beef at retail.
• Position U.S. beef as a wholesome, fresh and
  balanced food.

39
Japan Evaluation of U.S. Beef Retail Promotions

• Surveyed 254 consumers outside 8 different stores
  that were promoting U.S. beef
• 52 said they do not decide to buy beef until
  after entering the store Promotions offer great
  opportunity to influence purchasing behavior
• 17.3 noticed the U.S. beef promotion, but 45
  actually purchased U.S. beef

40
Japan Evaluation of U.S. Beef Retail Promotions

• How shoppers learned about U.S. Beef
  promotions
• 59 from in-store flyer
• 25 from stores own promotional materials
• 11 from newspaper advertisements
• 7 from taste demonstrators
• 78 noticed the stores own promotional items as
  opposed to 12 who noticed USMEFs POS materials

41
Japan Retail PromotionsRecommendations

• Produce joint POS materials with individual
  retailers
• Hire taste demonstrators who are more skilled in
  nutrition and/or cooking
• Create U.S. beef and pork campaigns tailored to
  the needs of individual retailers