The fresh meat assortment of a typical Japanese supermarket consists of approximately:
Beef = 40%
Pork = 30%
Chicken = 20%
Ham = 10%
Japanese meat buyers for retail food operations face several risks when sourcing abroad:
Quality risk (safety, grading, specifications).
Taste risk (sensitivity/match to Japanese palate).
Supply risk (volume flexibility, shortages).
Consistency risk in all of the above. (Stability = Antei)
Japanese buyers want products they can present to their customers as being consistently:
Safe (Anzen - no harm from using product)
Worry-Free (Anshin - assured quality)
Sanitary (Eisei - clean production processes)
Therefore, when a buyer is looking for a new supplier, they tend to look at:
The financial strength of the supplier: balance sheet fundamentals, strengths and position within the industry, and the company's history in the industry.
Suppliers are often found and judged through industry feedback.
The supplier's products: freshness (quality), product type & grade levels, ability to meet buyer specifications, and volume capacities.
The supplier's production center or factory: the buyer wants to meet the factory manager (not necessarily the company president) and wants to hear about the manager's approach to production, the manager's experience, the manager's ability to respond quickly to changes, and the manager's personal manner.
Safety in production facilities and processes: is the packer close to HACCP?
Examination of the feedlot: feed rations, animal development & control systems.
Transportation logistics: what are the cost & time realities of getting the product from the producer to the retailer's fresh meat processing / distribution centre?
Price: dependent on product grading, overall quality, volumes, and the producer's ability to meet the buyer's demands.
Perspective on the Importance of Factory Managers
Discussions with a meat buyer gave the following impressions regarding analysis of potential new suppliers:
If the impression of the factory (i.e. slaughterhouse & packer) manager's abilities is weak, then production points beyond are also assumed to be weak. If perceptions of the manager's abilities are strong, then the buyer's confidence is boosted.
The buyer wants to match what the manager says about the company's product and production processes with what the buyer actually sees upon personal inspection. The buyer will want to ask questions about perceived gaps between what the manager says and what is physically observed. The buyer is trying to gauge what the manager says in line with the manager's actions.
This 'feeling-out' process takes time. If the supply arrangement works well at first, trust is built up and the buyer has confidence in increasing order levels. The buyer wants to focus on working together with the producer honestly so that both sides can understand the other's needs and ways.
An emphasis is placed on the teaching of buyer mindset that is required, since the buyer is assumed to better understand the end-consumer's needs.
Supply Systems for Fresh Meats (Supermarkets)
Pork and chicken supplies are generally sourced through 1-year contracts which have pre-determined basic weekly volumes and prices. This is due to the fact that weekly pork and chicken sales volumes do not vary considerably.
Weekly beef volumes, however, change considerably and are largely dependent on retailer promotions and specials. The retailer decides these promotions on a monthly basis. As a result, retail buyers negotiate on a monthly basis with suppliers both in terms of price and volume. Domestic market prices are developed from benchmark prices tracked through the national Shibaura market.
Chicken 'broiler' supply was almost 95% domestic supply, with the remainder coming from China and Thailand.
Fresh pork supplies consisted of approximately 80% domestic pork (black pork, white pork), with the remaining 20% coming from the United States.
The only imported fresh pork I observed in Japanese supermarkets was U.S. pork.
However, use of pork imports as intermediary material for further processing rose to 80% in some pork processors. The users of imported pork for further processing stated that Denmark pork is a leader in terms of price, quality and meeting specifications. Other sources included the United States, Mexico, Taiwan (resumed) and Canada. It was also stated that for some further processed "delica" products (such as bacon, sausages, rose ham), the darker colour of Canadian pork breeds makes it an inappropriate source (for belly and loin cuts).
Fresh beef supplies were roughly 58% imported and 42% domestic.
The only imported fresh beef items I observed in Japanese supermarkets came from either the United States or Australia. When I queried as to reasons why Canadian beef was not present, I was told that there are simply too many products of similar quality (i.e. Canada Prime) and only a few products can take up precious shelf space. These competitive products included domestic Wagyu, domestic Holstein, US Top Choice and Aussie Beef, leaving Canadian beef without a distinctive position in the market.
Domestic Wagyu/Holstein cross (F1) was being sourced from custom feedlots.
Fish: Norwegian salmon is being advertised on national television (CM) and is a 'hot item' compared to Canadian salmon (i.e. raising consumer awareness).
This information is maintained by: Gail Atkinson
Last Revised/Reviewed June 29, 1999
