Market analysis - Japan
Japan, with a population of 126.3 million, is the world’s third largest economy and one of the largest importers of red meat in the world. Beef consumption is estimated to be approximately 9.4kg per person per year (MLA).
During 2016, Japan was Australia’s largest beef market in both value and volume terms, and WA’s third largest market by volume and second largest by value.
As seen in Figure 18 the value of WA beef exports to Japan underwent a stage of significant growth between 2012 and 2014 whereby it increased 118% from $13.7 million to $29.8 million. Over this time the volume of beef exported to Japan rose 94% from 5.9 million kg to 11.5 million kg. There has however been a decline between 2014 and 2016 of 44% in volume and 3% in value.
According to MLA the local Wagyu and Kokusan beef are favoured in Japan; however Australian beef has the highest awareness and frequency of consumption.
Australia accounts for 54% of beef imports in Japan, but faces increasing competition from the USA which has been growing its market share in recent years. Other major players are New Zealand, Mexico and Canada (MLA).
Due to recent trade negotiations Australia has a competitive advantage over other beef exporting nations. The Japan-Australia Economic Partnership Agreement (JAEPA) entered into force on the 15 January 2015. The JAEPA had wide ranging implications for many agricultural exports including beef. It resulted in an immediate tariff cut for frozen beef from 38.5% to 30.5% and will continue to be phased down to 19.5% over 18 years. For fresh beef it will be phased down to 23.5% over 15 years. It also exempted Australia from the “global snapback” tariff which is deployed when total beef imports increases rapidly, as well as increased safeguard trigger levels at which tariffs increase when reached (35 000 tonnes for chilled beef and 200 000 tonnes for frozen beef in 2017) (Department of Foreign Affairs and Trade).
MLA estimate that around 60% of Australian beef exported to Japan is used in the foodservice sector and 40% is sold through the retail sector. This sector is very sophisticated but also very fragmented and highly competitive.
Due to Japan’s ageing population and smaller household’s nakashoku, which are pre-cooked small meals for home consumption, is becoming popular. Chicken and pork are popular in nakashoku however beef is increasing in popularity.
Younger generations are developing a taste for steaks and leaner red meat leading to bistros and steak bars gaining popularity. Marbled yakiniku cuts also remain popular (Korean style table top barbeque using skirts, loins and offal) (MLA).
The most popular cuts exported are the Japanese full sets, which are a 12 cut set trimmed of fat. It equates to 43% of carcase weight with the remainder being fat and low value trim (Dunlop 1992).
Manufacturing beef is also very popular as seen below in Figure 19.
