USMEF Strategic Market Profile

Taiwan

Market Trends and Growth Potential

• Strong growth potential exists for U.S. pork variety meats. Prices for certain U.S. PVM are competitive with domestic supplies and those of other exporting countries. Although Taiwan is self-sufficient in overall pork production, certain variety meats are in high demand and are undersupplied.
• Taiwan’s pork industry is still reeling from scandals surrounding the sale of pig meat from sick, dead and/or diseased carcasses as well as FMD crises; the HACCP system adopted by the U.S. pork industry is considered the gold standard in food production and can be promoted to consumers to alleviate safety concerns.
• Ractopamine in U.S. pork has recently become a hot issue in Taiwan and sensationalist media coverage has negatively influenced consumer confidence and slowed U.S. pork exports to Taiwan.
• The U.S. pork industry can capitalize on the growing popularity of the “natural product” movement and interest among consumers in niche items like natural/organic.

• Taiwan’s pork market, both raw and processed, is dominated by local production which accounts for more than 95% market share.
• The Taiwan government is no longer encouraging expansion of its local pork industry in reaction to environmental concerns, plus pork production costs in Taiwan have increased in recent years.
• Prices of pork products from Canada, Denmark and the Netherlands are lower than U.S. pork and Denmark is a particularly strong competitor since Danish specifications are similar to Taiwan’s.
• Canadian trimmings seem to be more competitive in both quality and specification and Canadian packers are willing to provide varied and better specifications than their U.S. counterparts.
• Once Korean pork is eliminated from the FMD list it will be a potential threat to U.S. pork in Taiwan.

Market Penetration

• U.S. chilled pork sales are showing continued growth at the retail level, and there is increased growth potential as Taiwan’s younger generations are shopping more in supermarkets and hypermarkets instead of wet markets due to better hygiene and more flexible shopping hours.
• Premium U.S. pork, like Kurobuta, is gaining in popularity among high-end HRI establishments.
• Trendy low-cost yakiniku shops and shabu-shabu restaurants are growing in number and are popular among Taiwan’s youth. U.S. pork false lean is a popular item sold to these establishments.
• Growth in deli counters at convenience stores like 7-11 and deli sections in department stores are creating new opportunities for U.S. processed pork products.
• USMEF continues to expand the market for U.S. pork in all sectors through a strategy focusing on increasing awareness and product knowledge of the wide range of U.S. pork items available.   USMEF also disseminates information about the quality and safety of U.S. pork to all sectors through USMEF’s Chinese Web site.
• Public relations activities and advertising are used to illustrate and communicate the message that U.S. pork is safe to a wide audience, including consumers, and to dispel negative PR about U.S. pork, which continues to spread as a result of recent ractopamine coverage in the press.
• USMEF has cultivated good relationships with key influencers in academia and the Taiwan government to ensure there is proper and full comprehension of U.S. pork safety.

Product/Industry Image

• Consumers still feel that imported products cannot be as fresh as domestic products because of long shipping times; the willingness of the average Taiwan consumer to pay more for imported pork (especially frozen) is not well established.
• Consumers in Taiwan are becoming increasingly aware of health issues related to the consumption of red meats and may consider pork to be high in saturated fat, cholesterol and harmful to human health. Many consumers have turned to other protein sources such as poultry and fish.
• The U.S. government is negatively perceived as applying political pressure on the government of Taiwan, particularly in light of the ractopamine issue, dampening USMEF’s efforts to promote a positive image for the U.S. industry.

Operating/Marketing Environment and Trade/Distribution Issues

• 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 pork.
• Owing to growing product selection and increasing disposable incomes, Taiwan consumers are paying attention to the safety and health aspects of the foods they purchase. The growth of up-market retailing such as Jason’s, Costco, City Super present opportunities to feature high quality U.S. chilled pork and processed meats.

Access Conditions

• U.S. pork access continues to be fragile; further negative ractopamine developments and sensationalist media coverage constitute a real threat to U.S. pork’s access to the Taiwan market.
• Taiwan has eliminated its tariff rate quotas on certain pork items, including bellies and variety meats. Further reductions in import barriers could further enhance U.S. pork competitiveness. U.S. pork access is expected to be an issue in the US-Taiwan FTA discussions.

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:

• Develop a crisis management public relations strategy in Taiwan for U.S. pork, where USMEF would work closely with key government contacts and legislators, etc. to deliver key U.S. pork industry messages.
• Continue to build awareness of U.S. pork availability, competitiveness and attributes – including eating quality, reliability of supply, and safety – among the Taiwan trade, including importers, foodservice operators and retailers.
• Exploit opportunities for U.S. pork niche items such as natural pork, and lines of unique processed and branded items by building distribution channels and identifying end-users for these products.
• Develop and implement customized activities to meet the needs of specific trade sector companies that address particular market constraints.
• Emphasize the profitability, availability and attributes of U.S. pork to Taiwan’s foodservice, processing and retail trade.
• Develop specific existing and potential target accounts for niche value-added pork items such as natural pork, and for branded processed meat lines.

USMEF Export Forecasts: