1

Joint Industry Marketing Committee Joint Industry Marketing Committee MeetingMeetingJuly 31, 2010July 31, 2010

U.S. Meat Export Federation

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Tactic & BudgetDevelopment

(February – March)

Evaluation + Analyze Results

(December – January)

Strategy & SMP Development

(September – October)

PerformanceMeasure Review

(March – April)

Domestic & Intnl input &

MarketIntelligence

(24-7-365)

UES Submission(May) Strategies/SMPs

Presented to BOD(October – November)

Regional Planning & Strategy Refinement

(January – February)

USMEF Strategic Planning Cycle

Beef ARs Submitted(July)

3

USDA Funding Overview

• Unified Export Strategy (UES) is the means for requesting funds from Foreign Ag Service programs.

• 2010 USDA Market Access Program (MAP) funding for international beef programs was $6,862,948. – Announcement was made January 2010– Request was just over $9 million

• FY2011 funding proposal submitted June 18.– Requested $9.5 million for beef programs– Final decision in November or December

4

USDA Review

• USMEF received “Highly Effective” Rating from FAS– Highest of 4 rankings

“USMEF does an excellent job of adjusting to market conditions and making changes to marketing plans accordingly. Overall we are very pleased with USMEF’s market development operations.”

5

Priority #3: Develop & Expand International Markets

2009: A Year of Challenges– Global recession– Continuing access issues– Negative consumer perceptions

2010: A Year of Opportunity– Economy improving– Greater access– Targeted campaigns in key markets– Jan to May: Quantity up 11% (880 Million lbs)

Value up 19% ($1.449 Billion)

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Develop & Expand International Markets

Strategic Priorities:– Market Access (Improve and maintain access in markets)– Market Development (Increase the volume and number of

cuts purchased)Tactical Focus:

– Develop new sectors and “subsectors” – TQM Approach– Integrated Campaigns

• Enhance image of US products and industry• Educate buyers, consumers and influencers• Expand Range of cuts & products/Maximize carcass utilization

– Adapt programs to meet market/economic environment

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Denver

Mexico City

MoscowBrussels

Beirut TokyoShanghai

Taipei

Seoul

Singapore

Guangzhou

Monterrey

St. Petersburg

Hong Kong

Beijing

Caribbean

*Consultants

C/S America

One Key is USMEF’s International Network of Offices

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TQM Marketing Approach

• Analyze each sector & subsectors - Trade, HRI, Retail, Consumer

• Identify Size, Potential, Key Targets, etc

•Set Goals, Tactics, Evaluation

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Integrated Campaigns

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Integrated U.S. Beef Marketing Campaigns“We Care”, “To Trust”,

“We Love U.S. Beef”

- Cable TV (Korea)

- Newspaper & Magazines

- Billboards

- Advertorials

Retail

-Chain Stores

-Dept. Stores

-Butcher Shops

Foodservice

-Hotel/Steak

-Rib Houses

- BBQ/Yakiniku

Promotion Advertising

Public Relations - Blogger Marketing

- Web communications)

- Media Relations

Distribution Channel Development

- Information Service

- Seminars

- Trade Shows

- Commitment

- Product of Families & Communities

Implied Messages - Quality- Value- Consistency

- Freshness- Safety

- Availability

BRAND IMAGE CUSTOMER EXPERIENCE

Implied Messages - Safety & Wholesome- Producer integrity- Natural & Clean

- Scientific

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Integrated U.S. Beef Marketing Campaigns

• LOCALIZED: based on country specific concerns and cultural biases;

• SYNERGY: formulate core image and message points that cross sectors/channels and tactics;

• IMPACTFUL: should address consumer concerns on emotional & factual level;

• EQUITY: should restore/build “U.S.” brand equity.• FLEXIBILITY: messages differ slightly according to target

audience, and can evolve;• CRITICAL MASS: need minimal resources to be cost

effective.

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Focus on Underutilized Cuts• Japan “We Care” campaign

• chuck roll, short ribs, brisket, shoulder clod heart• Korea “To Trust” campaign

• chuck roll, outside skirt, bone-in short ribs• Mexico Sales Force Training and Ideal Meat Case

• shoulder clod heart, chuck roll, top blade• Taiwan Hotel Chef Training

• chuck roll, boneless & bone-in short ribs• ASEAN Culinary Training Center

• chuck roll, chuck flap, top blade, short ribs• Russia HRI Training

• top blade, sirloin• Caribbean Chef Competitions

• shoulder clod heart, back ribs, tri-tip, brisket• Central America Sales Force Training

• top blade, chuck roll• EU Seminars and Promotions

• chuck roll, shoulder clod heart• Middle East Desk-side Seminars and promotions

• chuck roll, sirloin• Hong Kong Seminars and Trade Shows

• boneless short ribs, chuck roll

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Example: Carcass Value Maximization

Short plate, chuck eye roll, chuck short ribs, bnls short ribs, tongues, outside skirts, hanging tenders to Japan

Rounds, chucks, clods and variety meats to Mexico

Livers, tongues, hearts, kidneys to Russia

Short ribs, chuck short ribs, back ribs, chuck roll, brisket, femur bones, intestines, to Korea

Short plate, short ribs to Greater China

Livers to Egypt

Source: USMEF

Ribeyes, strip loins, tenderloins to EU

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Export Price Premiums

$0

$1

$2

$3

$4

$5

$6

$7

$8

Chuck eye roll Chuck short rib Chuck flap tail Short ribs

JapanHong KongTaiwanU.S.

Prices in U.S.$/lb; based on USMEF international office estimates; snapshot of C&F prices for Choice ~April 2010. US prices are Choice USDA wholesale and USMEF est.

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Exports add value for U.S. producersTotal value per head in May 2010

– $160/head– Short ribs in Korea alone adding >$20/head

Choice cutout value up $133/head (vs. same week in 2009)The chuck primal has contributed the most to the increase…

– Chuck up $39– Ribs up $37– Round up $24– Loin up $21– Plate, brisket, flank up $13

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Larger Imports Supporting Growing Consumption

Country IMPORTS PER CAPITA CONSUMPTION

2008 2009 2010 2008 2009 2010

U.S. 1,151 1,192 1,207 41 40 39.1

Russia 1,137 895 905 17.06 15.2 15.2

Japan 659 697 702 9.2 9.5 9.6EU-27 466 495 500 17 16.9 16.8

Mexico 408 322 340 18.3 17.6 17.9

Korea 295 315 325 11.08 11.2 12.6

Vietnam 200 250 275 5.2 5.9 6.1

Canada 230 247 265 31.2 30.2 29.6

Egypt 166 180 190 6.3 6.4 6.4

Hong Kong 118 154 185 18.95 24 28.2

Source: USDA/FAS PS&D Spring 2010, carcass wt., thousand MT

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Develop & Expand International Markets

FY 2011 Budget Recommendation

– Program Cost $4,970,570– Implementation Cost $2,457,000

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Mexico19.34%

Middle East2.55%

China/HK4.49%

Russia3.57%

Europe3.83%

Taiwan6.13%

C/S America2.45%

DR0.43%

Caribbean1.43%

ASEAN1.80%

Korea26.96%

Japan27.02%

Develop & Expand International Markets

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Direction for 2011• Korea and Taiwan continue strong efforts to

address image concerns• Japan expanded access expected during 2011• New US “negotiating stance” in Asia offered

encouragement for China, but now??• Increased opportunities in smaller markets,

such as Middle East, Caribbean, and Central/South America

• Europe down slightly as supplies of eligible cattle remain low

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Thank you!

For additional information or questions:Greg Hanes

ghanes@usmef.org303-623-6328