USMEF Strategic Market Profile

Taiwan

Market Trends and Growth Potential

• USMEF expects beef imports to modestly increase as the Taiwan economy improves.
• Food safety has become a very important consideration for Taiwanese consumers. Many retailers and foodservice operators, in an effort to ease consumer concerns about the safety of U.S. beef have cooperated with USMEF to educate consumers about the U.S. beef safety system in place.

• Australia and New Zealand are the leading suppliers of beef to Taiwan, However, Canada is considered the biggest competitor for U.S. market share following Taiwan’s lifting of the ban on Canadian beef imports in June 2007. The Canadian Beef Export Federation (CBEF) is planning aggressive promotion strategies as the Canadian government has invested considerable funds in the organization’s Taiwan budget in order to capture some of U.S. beef’s market share.
• From September to October 2007, one of Taiwan’s largest beef importers imported 15 mt of Canadian chilled beef. However, sales at the retail level have been slower than expected due to pricing issues and lingering BSE concerns.
• Taiwan is seeking to expand trade ties with Panama for a variety of products, including beef, by implementing a free trade agreement that was signed between the two countries in 2004.

Market Penetration

• Approximately 70% of all beef is consumed outside the home through Taiwan’s foodservice sector.    The remaining 30% is consumed in the home and purchased through retail channels such as supermarkets and hypermarkets. Hypermarkets are the fastest growing segment of the Taiwan retail sector and account for the majority of U.S. chilled beef sales. USMEF is focusing its retail strategy and resources on these accounts as well as selected up-market supermarkets, and placing less emphasis on retailers that are more loyal to Australian beef.
• Secondary cities of Taiwan (Taichung, Kaohsiung, etc.), where consumers have strong purchasing power, offer tremendous potential to expand the market further through consumer-oriented promotions.
• USMEF’s HRI sector strategy focuses on building good relationships and maintaining buyer loyalty among key foodservice accounts, capitalizing on cooperative agreements with hotels and high-end restaurants that are willing to pay for advertising costs as part of U.S. beef joint promotions.
• USMEF efforts to expand U.S. beef’s share of the retail meat case include creating U.S. beef cooking demo videos for retail stores and expanding web marketing through USMEF’s Chinese website to reach all beef users including importers, wholesalers, foodservice operators and consumers.
• Taiwan’s media has powerful influence and will continue to report on USMEF activities and U.S. beef-related food trends to consumers.

Product/Industry Image

• U.S. beef has a reputation for maintaining consistent quality, and specifications are considered appropriate for the Taiwan market – the best among all imported beef.
• Buyers list the U.S. beef grading system as an important selling point.
• U.S. packers are devoting more resources to their high-end brands, gaining better exposure for U.S. beef in retail stores.
• Taiwan consumers are gradually becoming more aware of the benefits of good nutrition; as part of a healthy diet, they recognize beef as one of the best sources for zinc and iron.
• Growing animal welfare issues and health concerns are attracting consumer attention and might have greater influence on meat consumption in the future.

Operating/Marketing Environment and Trade/Distribution Issues

• Due to increased beef prices and shrinking profit margins, retailers and foodservice operators are reluctant to make significant investments of their own to promote U.S. beef.
• As Korea and Japan lift their U.S. beef bans, the prices of popular items including boneless short rib, chuck short rib, short plate have increased.
• In August 2007, Taiwan’s government relaxed its entry policy for Chinese “medical tourists” visiting Taiwan for medical treatment. This is expected to lead to increased tourism and demand for beef.

Access Conditions

• Highly popular U.S. beef cuts such as variety meats and bone-in short ribs, previously a mainstay in the Taiwan market, are still out of the market due to the BSE ban.
• Improving access for U.S. beef in other higher profit Asian markets may cause a decrease in supply available to Taiwan.
• 2008 legislative and presidential elections are expected to fully occupy policy makers’ time, leaving little time to engage in negotiations on full access for U.S. beef in Taiwan.

Import and market share data is based on import data of Taiwan (from GTA), and U.S. export data is from the U.S. Department of Commerce, Trade Census Bureau.

Long-term Strategy:

• Continue aggressive retail activities featuring U.S. beef to capitalize on the imaging potential available at the retail showcase. Although U.S. beef is available in major retail chains, consumer exposure to the product is still somewhat as limited.
• Help drive overall beef consumption by highlighting quality, nutrition and health messages about beef. Utilize public relations and advertising to create a “feel good” U.S. beef image. Increase beef nutrition messaging and U.S. beef safety education directed toward consumers.
• Increase the market penetration of U.S. beef in the retail and food service sectors by introducing new U.S. beef cuts to match specific Chinese food preparation techniques. Educate Asian gourmet style restaurants about the advantages of using low-cost/alternative U.S. beef cuts.
• Assist in U.S. beef brand building in an effort to take advantage of different market niches. 
• Continue to work with key influencers in the media, academia and the Taiwan Government to ensure a proper and full comprehension of U.S. beef safety.

USMEF Export Forecasts: