TOKYO -- Japanese beef producers are finding a ray of hope in exports to the U.S., after being hit hard by the coronavirus crisis. The pandemic has caused a plunge in consumption in the absence of tourists from abroad and plunged restaurants into the doldrums.
In a spotlessly clean meat-processing plant a short drive from container terminals at the Port of Long Beach in California, workers weigh blocks of wagyu Japanese beef and place them on slicing machines. The machines begin to rhythmically move from side to side and cut the meat into thin slices. The workers then quickly stack the slices on trays.
The plant is run by P&Z Fine Foods in Paramount, California, which was founded in 2017 jointly by a subsidiary of the the National Federation of Agricultural Cooperative Associations (JA Zen-Noh) and a local food seller Poseidon Group. P&Z processes and sells agricultural and livestock products imported from Japan.
Beef exports from Japan in total dropped 2.7% in 2020 from the previous year, despite a rise in volume, because of an increase in demand for more inexpensive cuts in some countries. But exports to the U.S. not only expanded in volume but also logged a 36% gain in value. The U.S. thus became the third largest export market for Japanese beef in 2020, up a notch from the previous year.
JA Zen-Noh serves as a key route for beef exports to the U.S. Wagyu breeds are not the only beef cattle raised in Japan, as there are others, including wagyu hybrids.
Almost all the beef sold by JA Zen-Noh through P&Z is wagyu. Sales grew 17% in volume in fiscal 2020 from the previous year.
The sales gain was due in part to an increase in stay-at-home consumption. The closure of many restaurants and other developments triggered by the COVID-19 crisis have prompted Americans to eat at home more often. Widely known as a luxury product, wagyu has attracted U.S. consumers wishing to eat tasty meals at home.
Online shopping contributed to the growth of wagyu sales in the U.S. E-commerce accounted for 50% to 60% of JA Zen-Noh's wagyu sales there, including those to wholesalers, hotels and supermarkets, in 2020, up sharply from around 10% in 2019. The steep increase in online sales more than offset drops in sales to restaurants and other customers.
Full-scale sales of thinly sliced wagyu also contributed to the sales growth. While Americans mainly consume beef in the form of thick steaks, JA Zen-Noh has installed machines capable of cutting beef into slices as thin as 1.5 to 3 millimeters in R&Z's factory.
Asian residents in the U.S. are one of JA Zen-Noh's target markets for the sliced wagyu. Given their custom of eating sliced meat in hot pot dishes, JA Zen-Noh expects to find demand for thinly sliced wagyu.
As the widespread popularity of washoku Japanese cuisine has made sukiyaki and shabu-shabu household words in the U.S., JA Zen-Noh also concluded that the increased recognition of the dishes should help boost sales of sliced wagyu.
In fact, sales of thinly sliced wagyu tripled in volume in 2020 from the previous year.
Though thrown into confusion on various fronts by the spread of COVID-19, the food business in Japan can see a ray of light in strong wagyu exports to the U.S. The rising sales of thinly sliced wagyu in the U.S., where beef for steaks is traditionally in demand, offer a clue as to how to develop markets for them.
Japan's new export strategy for agricultural products has just gotten underway. But there is room for a sharp increase in exports through combined government and private sector efforts.