Customized pork pleases Japan

AgExporter, Dec, 1998 by Debbie Pfaff

Japan is our biggest overseas pork market, taking 65 percent of all U.S. pork exports. Although economic problems have led consumers to become more cost-conscious, they're still demanding top quality in this dietary staple.

Pork is second only to fish as the most popular animal protein in Japan. It has a good-for-your-health image-consumers believe it to be more nutritious and lower in cholesterol than beef.

Japanese consumers also have clear ideas about certain cut specifications and meat quality characteristics that must be met.

They particularly like firmer, redder meat. To accommodate Japanese cooking styles, chilled meat is usually sold sliced, cubed or diced. If the pork isn't firm, the meat won't cut well. The firmness also curtails moisture loss during cooking.

Designer Pigs Go to Market

Since the kind of pork that Japanese consumers like best is in short supply in the United States, U.S. producers have begun working with Japanese importers to produce those desired characteristics. Coming under scrutiny: certain breeds, feed and slaughter techniques.

To guarantee the most marketable imported meat, some Japanese producers have shifted some pork production and processing to the United States and other countries (such as Canada). One major Japanese company bought a farm in Texas with plans to eventually produce over half a million pigs annually. The company plans a slaughter facility that will be producing by 2001.

U.S. Pork Gaining

Japanese domestic pork production, though up slightly in 1997, has been declining overall due to an aging farmer population, marginal profits and loss of farmland due to urbanization. However, the domestic pork industry still supplies nearly two-thirds of Japan's total consumption.

A big pig player has recently been locked out of the pen. Before its industry closed down due to an outbreak of foot-and-mouth disease in March 1997, Taiwan supplied 41 percent of the Japanese import market with a product virtually identical to Japanese pork.

Traditional suppliers like the United States, Canada and Denmark, along with new-to-market entrants Korea, Mexico and South America, are racing to fill the void.

The growth of U.S. market share in the fresh/chilled category from 46 percent in 1996 to 75 percent in the January-May 1998 time frame is at least in part attributable to Taiwan's absence.

Even with this large gain in market share, the United States still faces stiff competition, and it's not only coming from traditional Danish (frozen) and Canadian (frozen and fresh/chilled) suppliers. Korea's pork with its desirable characteristics - and the country's built-in proximity advantage and currency devaluation - is stepping up the competition for U.S. producers.

Micro-Brands Magnify Market

Private pork micro-brands, now numbering about 160, have sprung up in recent years. Japanese consumers tend to associate brand names with quality, always a big factor in Japanese consumer purchasing. Discerning supermarket chains, recognizing the panache of branded over generic lines, have secured private brands of their own.

The micro-brands may ride on the reputation of a region, or distinguish a specific farmer, type of hog or feed ration.

Promotional materials in Japanese stores drive the images home to consumers. Some may prominently feature a photograph of the farmer and the name of the farm. This personalization of the product, viewed as proof of the integrity of the producer, appears to elicit trust from consumers.

Kurobuta (Japanese black hog) pork sells very well because it is perceived as the premium brand of pork; the image is one of coddled hogs raised with great care.

The suppliers of the most successful U.S. pork products in Japan can thank their micro-brand status. However, the majority of Japanese consumers, unaware that U.S. or any other imported pork is sold in Japan, assume all pork at the store is domestic. So they don't ask about the safety and quality of U.S. pork.

This could change if Japanese consumers associated a high-quality pork with U.S.-specific brands.

Another quirk of the market: Japanese consumers tend to equate high cost with high quality. Identifying high-quality pork as a brand, rather than simply a commodity, will command premium pricing and lead to greater profits for U.S. companies.

Market servicing is an important factor for U.S. suppliers. While the Japanese market offers significant opportunities for the U.S. pork industry, it also demands a serious industry commitment to work with Japanese buyers in meeting desirable quality characteristics. Also, U.S. exporters need to study Japanese consumer trends to learn how to figure out a marketing strategy to most effectively market their product in Japan.

Japanese Consumers Eye Quality First

Several key dietary concepts, with quality always a given, are basic to Japanese cuisine. Freshness is the first - the Japanese prefer fresh and lightly cooked foods. Half of all housewives shop daily, partly to guarantee product freshness.

The Japanese palate also likes variety. Japanese meals include small amounts of a wide variety of foods. Appearance is essential: food must taste good and look good, too.