The pandemic hindered market development for Ontario’s beef industry over the last few years but there were successes.
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One of them was Chuck’s Roadhouse, a high-volume steakhouse with 60 restaurants that featured Ontario’s Corn Fed Beef (OCFB) this summer, John Baker told Beef Industry Convention attendees last month.
Why it matters: Sales volumes of Ontario beef increased last year and marketing efforts played a role.
“They reach into the rural areas (and) there’s strong growth potential there. They’re a company that’s expanding, growing,” said Baker, director of brand management and business development for OCFB and Ontario Cattle Feeders Association.
“And it’s a good opportunity for us to develop that local supply chain and give them something to talk about on their menus.”
Creating dialogue about the local flavour of Ontario beef raised on family farms extends awareness and supports brands that are marketed at national trade shows.
“When restaurant operators go to a food show, they’re in an open mind; they’re in a buying mood,” Baker said. “So, it’s a real good opportunity to be able to connect with a captive audience type of approach … (and) we’re talking about unique Ontario brands that cannot be substituted.”
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A consumer-friendly QR code links to four videos on a website that promotes Ontario family farms, beef livestock care, nutritionally balanced feed and sustainable beef production practices.
The next step is to get the QR code on packaging and onto shelves, which is part of ongoing discussions with Loblaws, said Baker.
In export markets, Japan remains the highest priority and provides the most robust growth potential, said Baker.
“Outside of Canada, (Japan is) the only market where we actually have stronger, better market access versus the U.S.,” said Baker. “We have a tariff rate advantage over the U.S. … and it’s a real strong, fastest growing market in southeast Asia.”
Ontario beef exports rose in the first quarter of 2022 compared to 2021. Japan and Vietnam remained stable markets with a seven and three per cent increase in volume and a 24 per cent and 23 per cent increase in dollar values, respectively.
Pre-pandemic in-store sampling in Japan was a massive driver in increasing consumer and retail confidence, as were trade shows. Baker said OCFB used product giveaways and creative solutions during the pandemic to keep Japanese consumers engaged, but it was a struggle.
This year in-person marketing has returned, with a strong showing at five tradeshows in Japan and one each in Taiwan and Vietnam.
Incoming trade missions are also expected to increase brand confidence and uptake in export markets.
“The single most impactful thing we can do is bring them to your farm and show them what you do on a daily basis,” said Baker.
“When meat shows up in their shipping container in the port of Japan or Tokyo, they know what happened to that product and how those cattle were raised. It makes them part of the story, and they can now take to their consumers.”
Baker said collectively, in 2020 and 2021, the increase in meat exports to Japan was roughly equal to 131,000 head of cattle. The projected increase in demand for 2022 is equivalent to an additional 75,000 head.
“That works out to be about 1,500 cattle per week that are either increased demand for, or value for, because of our efforts in Japan,” he said. “That’s the power of the market, and again, that cannot be substituted by any other product.”
In 2022, Ontario’s beef sector regained access to the Saudi Arabia market.
“The Middle East market is extremely strong. They value high-quality beef,” Baker said. “We have strong competition in those markets, but we are unique.”
Exports to the Saudi Arabia saw a 282 per cent increase in kilograms shipped and a projected increase of $47.3 million in sales, up from $8.5 million in 2021.
The overall increase in sales to Japan and Saudi Arabia was a $64 million boost, with a checkoff export investment of $250,000.
The United Arab Emirates and Taiwan saw a 44 per cent and 86 per cent increase in the dollar value of beef shipped in the first quarter. At the same time, U.S. export volumes declined 10 per cent but dollar values increased by three per cent.
The Gulf Cooperative Council countries of Kuwait, Saudi Arabia, United Arab Emirates, Qatar, Bahrain and Oman saw significant population and wealth growth, said Baker.
More significantly, the Middle East has moved toward a tourism-based economy.
“With that comes growth in the distribution and food service sectors, and that rising affluence increased demand for high-quality meat,” he said. “We’ve also started developing new relationships in Kuwait, Bahrain and Qatar.”
By working with packer partners, Baker said strong distribution partnerships have developed in Saudi Arabia and the UAE. Given the seven-star hotels in those regions, it opens high-end market opportunities where OCFB products can realize growth.
“Over 40 per cent of beef carcass value is generated through export markets. That’s over $1,400 a head right now,” Baker said.
If Japan sets the value of a skirt steak at $10, a provincial processing plant unable to export to Japan still benefits because the export price sets the local value of the same steak, he explained.
“If we take $1 from the checkoff dollars and put it towards Ontario beef market development in those markets, we return $256 for every dollar,” Baker said. “That’s for beef sourced from Ontario cattle that cannot be substituted … (and it has) to be Ontario Corn Fed Beef cattle because that’s the only way we can verify those cattle, in fact, came from Ontario.”