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Business Trends

Japanese meat processors ride global wagyu boom

Itoham and Starzen boost exports of high-end beef as home market shrinks

Wagyu exports to Taiwan skyrocketed last year after a ban was lifted that September.

TOKYO -- Japanese meat purveyors Itoham Foods and Starzen are preparing to export up to twice as much wagyu beef to counter the impact of a stagnant market at home while satisfying the global appetite for the high-end product.

Itoham will increase its number of meat-processing centers from four to six. The plants will conform to U.S. sanitary standards, which are stricter than those for Japan and other Asian markets. The company plans to develop demand by producing cuts of wagyu that lend easily to thin slices of meat.

The Itoham Yonekyu Holdings subsidiary currently ships around 470 tons of wagyu to Taiwan and western markets, a figure it plans to elevate by 50% in 2019.

Meanwhile, Starzen has formed an operational tie-up with Adirect Singapore, a multinational meat distributor. In an effort to cater to Singaporean tastes, the Japanese company will modify how wagyu is processed based on local demand and cooking data collected by Adirect. The partners intend to visit clients and develop sales channels.

Starzen sees exports to Singapore doubling in fiscal 2018 from a year earlier under this collaboration. "We aim to forge more business alliances of the same type and further expand exports," said Motoyasu Hasebe, president of the group's exporting arm, Starzen International.

Using Singapore as a springboard, Starzen aims to double overall exports by 2020, compared with 2017.

Similarly, Japan's NH Foods -- which has subsidiaries and offices in 11 markets including Hong Kong, Taiwan and the U.S. -- will bolster wagyu exports by intensifying sales efforts to local meat processors and consumers.

This rise in activity by wagyu dealers comes amid a shrinking Japanese market. There are some 43,000 cattle breeders currently in business, down 40% over the past decade, according to the Ministry of Agriculture, Forestry and Fisheries. The livestock industry does not attract many newcomers, due to the manpower required with no days off. Without new blood, cattle breeders are aging.

The wagyu cattle count has also shrunk by more than 10% over the past five years. The dropoff in the cattle population has made calves more valuable. One calf fetched an average of 780,000 yen ($7,204) last year, up 50-60% from five years ago, putting prices in record territory.

The higher prices are spreading through the distribution chain. One kilogram of A4 wagyu, a premium cut, sold between 2,300 yen and 2,400 yen on average at wholesale in Tokyo at the end of January -- a 40% surge from five years earlier.

Meanwhile, Japanese shoppers have not seen much of an increase in disposable incomes. "For domestic consumers, wagyu has become an inaccessibly premium product," said an Itoham official. Supermarkets and other retailers are inclined to decrease shelf space for the high-end meat.

Outside of Japan, the wagyu market looks rosier. There has been burgeoning demand from the affluent in Asian countries enjoying high economic growth. And in the West, the premium beef continues to attract steak lovers. Last year, Japanese wagyu exports jumped 40% to an all-time high of 2,706 tons. Tokyo seeks to boost wagyu exports to 25 billion yen by 2019, equivalent to around 4,000 tons.

Contributing to the increased exports is Taiwan's decision last September to lift a 16-year import ban on Japanese beef. Wagyu exports to the market shot up so much that they overtook former leading importer Hong Kong in November and December last year.

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