Diversification and Differentiation—Key Priorities for U.S. Pork Producers
Since 1986, the U.S. checkoff program has promoted and provided research for the pork industry without referencing specific producers or brands. Congress created the Pork Checkoff in response to the Pork Promotion, Research, and Consumer Information Act of 1985, which pork producers had requested to help strengthen pork’s position in the marketplace. According to a 2020 Pork Checkoff-funded study, China and other Asian countries will recover from the African swine fever (ASF) outbreaks by 2025, resulting in increased competition in the pork industry. The report identified diversification of U.S. pork exports as a top priority, to continue market share growth, and increase U.S. pork values. A new Pork Checkoff-funded study explores how the United States can differentiate their pork products in six key markets.
United States pork differentiation study
The Pork Checkoff-funded study, prepared by the global research firm Gira, explores three critical areas where U.S. pork can excel over competitors in six key markets, including Japan, Canada, Mexico, South Korea, China, and Hong Kong. The three areas include:
- Sustainability — International clientele value sustainability, and want to know more about the U.S. pork’s commitment to sustainability. This involves demonstrating the pork producers’ dedication to animal welfare and environmental protection. Exhibiting the industry’s commitment to continuous improvement and education about production and processing standards will help differentiate U.S. pork from competitors.
- Quality, consistency, and service — U.S. pork producers have a reputation as low-cost, high-volume suppliers, and can further differentiate themselves by consistently offering a high quality product that satisfies customer service expectations.
- Communication — Understanding cultural differences and expectations in business, and clear communication, will help ensure U.S. pork is a valued supplier. International customers want current information about their order status, as well as U.S. production and packaging standards.
United States pork export growth strategy
In addition to differentiating U.S. pork from competitors, Pork Checkoff wants to educate customers, retailers, and distributors in existing markets about diverse market cuts they don’t typically buy. They also conduct emerging market assessments to deliver insights to the industry. The latest research shows particular opportunities for U.S. pork in Vietnam, Philippines, and China, but several other key markets also have potential.
- Vietnam — Vietnam’s total pork consumption tripled from 2000 to 2018, as the economy grew and living standards improved. This trend is expected to continue for the next 10 years, as their middle class continues to rise. ASF impacted Vietnam’s pork industry extremely hard, and they will need years to recover, resulting in the country becoming a large-scale pork importer.
- Philippines — Meat consumption in the Philippines has been growing for the last decade, with pork consumption increasing 2.7 percent per year. Pork, which is considered an everyday staple for Filipinos, was the number one meat consumed in 2018. Before ASF devastated backyard pig enterprises, domestic pork production could not keep pace with demand growth, resulting in increased import volumes. Their import needs are expected to increase as they recover from ASF.
- China — China has the world’s largest domestic pork market, feeding 1.3 billion people, and is now the major influence on pork’s price and availability worldwide. China represents about 20 percent of international pork trade, and this is expected to increase in the upcoming years, especially considering how ASF impacted the country.
- Japan — Ground seasoned pork imports from the United States increased by 28 percent from January to August 2020, and the National Pork Board has instigated a Japan Chilled Pork Taskforce to recapture 20 percent of the Japanese market’s chilled pork share. Pork demand is expected to increase, as Japanese families consume more household meals after COVID-19’s impact.
- Mexico — The Pork Checkoff and the U.S. Meat Export Federation (USMEF) are conducting technical training for Mexico’s retail, hotel, and food service industries, to demonstrate the pork loin cut’s versatility and marketability. By explaining how the various loin cuts should be processed, seasoned, packaged, and marketed in Mexico, pork import and diversification in the Mexican market should increase.
- South Korea — The National Pork Board (NPB) and USMEF helped fund a two-month campaign in 2020 to increase South Korea’s overall interest and usage of U.S. pork, specifically pulled pork. USMEF collaborated with Subway-Korea to promote the K-BBQ sandwich, a pulled pork sandwich featuring a special Korean-style barbecue sauce developed by the chain. Subway officials projected a more than 300 percent increase over typical pulled pork usage for this period.
- Colombia — The NPB and Iowa Corn Promotion Board funded a promotional campaign conducted by USMEF to give away mobile cooler bags for customers in Cartagena, Colombia. Customers who ordered a minimum quantity of U.S. pork products received the coolers filled with their orders. This promotion resulted in a significant increase in sales compared with the previous month.
- Canada — As Canadian exports to China and other Asian markets increase, Canada will need to meet its domestic demand through imports. The United States’ geographic proximity presents an opportunity to grow pork exports to Canada.
- Australia — Most processed products in the Australian market are made with imported pork, providing an opportunity for the United States to grow pork exports to Australia.
- United Kingdom — If a free trade agreement is established between the United States and the United Kingdom, U.S. companies and producers who are willing to invest in making their products eligible for export may have a great opportunity in the U.K. market.
Taking steps to diversify and differentiate U.S. pork in international markets will ensure pork exports are successful in the upcoming years, and will build confidence in U.S. pork.
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