The effectiveness of USMEF's programs

1. The effectiveness of USMEF's programs Nick Young Promar International Nov 4 - 2004

2. BACKGROUND • Promar – Ag & food marketing consultants • Specialize on developing strategies & marketing plans - focus on strategic issues • As part of this service we evaluate strategies and marketing plans. • See our role to provide LEARNING & FEEDBACK to our clients to help them assess progress.

3. EVALUATING USMEF MARKET DEVELOPMENT PROGRAMS • USMEF task challenging • Often difficult to see direct impact of market development activity on sales. Other factors influencing. • Generic market development is a painstaking & deliberate process • Develop awareness, knowledge, understanding, liking & preference – leads to being receptive to US meat & eventually a purchase. • Evaluations: • Examine purchasing behavior of key meat purchasers • And how USMEF staff have changed buyers awareness, attitude & purchasing behavior.

4. USMEF EVALUATIONS • USMEF program built around servicing key accounts - important players in the market. • Our task – assess if: • key players identified as targets, • specific marketing messages communicated &, most important • whether they have changed behavior. • Note: • We are a third party. We have no ax to grind. • Our role to be an objective check on program strategy & implementation. • This is a difficult & challenging job. We are not always welcomed, & among some clients our conclusions are also not always greeted with enthusiasm. • USMEF staff very supportive of our evaluation work • Never felt any pressure to take any particular view on their programs. • Moreover, they are open to our findings & recommendations.

5. THE EVALUATIONS • Beef - post BSE • Europe & Russia • Beef - Pre BSE • Caribbean, Taiwan & Mexico

6. TRADE POLICY • Critical market access issues to be fought in all markets. • Of primary importance but need to ensure trade policy fight is congruent with marketing position.

7. EUROPE - EU - State of the market • Overall EU market will continue to grow slowly • Beef • Market has been decimated by the hormone ban. • Continues to be a problem & hence US will not be able to make significant headway. • NHT beef will continue to be a niche • But growing need for imports • Pork • Hormone ban also a major problem. • Also, an oversupplied market where price is critical. • Hence, a relatively low key USMEF involvement

8. EU 16 (primarily UK & Benelux) • Beef: only access is through NHTB Scheme. • But availability has been a problem- though less critical now. • Most of the activity has fallen on supporting the two major importers. • These are critical. They do a great job for US. Very committed, although frustrated by prices & availability • The ABC concept is very limited without substantial supplies. • Pork: Again only access is through a NHT Scheme • Some have found niche market - but this market is very small • Little that USMEF can contribute in this market except ensuring that buyers know of US availability & the quality of product/service package.

9. EU 25 (new members Poland) • Beef: • A very small premium beef market. • As now part of EU it has to take NHTB Scheme beef. • Now so expensive the market has disappeared. • Beef tripe trade has been very important • Total disappearance of this market saved by FAS & USMEF negotiations with Polish government. • But need to raise awareness that US can continue to service this trade • Pork: • A very difficult market – price critical & now NHT Scheme • US pork did not have a good name among the trade! • USMEF worked hard to overcome problems

10. SHOULD MEF CONTINUE IN EU MARKET? • Low level investment in trade servicing is justified • Some risk attached to it, but on balance, needs to be continued. • We give a confident 'yes' to this. • Inconceivable that such an important market should be left without any service. • Import needs are projected to grow • Beef in particular.

11. WHAT ABOUT DIFFERENT SPECIES & PRODUCTS? • Beef: • Moderate priority • Continuing participation in ANUGA & SIAL - wide geographical interest in these shows. • Bricks & mortar ABC approach less effective than focusing on chefs. Chefs likely to have bigger multiplier effect on beef purchasing behavior (Chef's US meat accreditation) • NHTC program - maintain focus on opportunities for this product in EU. Maintain enthusiasm of 2 key beef importers. Continue pressure to make NHTCS less costly. • Recommend continuation as program is relatively inexpensive - importers bear a lot of the cost, & they create positive image. • Essential to maintain a toehold, although no major volume until there is a breakthrough on market access issues.

12. WHAT ABOUT DIFFERENT SPECIES & PRODUCTS? • Pork: • Low priority • Work in the US to promote niche opportunities • Very light trade servicing required • Variety meats • Low priority - except Poland • Poland - need to improve awareness US beef tripe is still available. • Encourage exporters to look for EU approval to supply beef tripe. • Continue with light trade servicing

13. EUROPE - FUTURE EU (2007 - BULGARIA & ROMANIA) • Gearing up for EU entry (in 2 year's time) - so will be caught in the EU cobweb. Currently EU trade preferences. • Very gloomy outlook • These are traditional pork markets. • Very tough price competition from Brazil (& EU) for pork. • Light trade servicing required around meat trade shows - no specific activities. • Very small premium beef trade as incomes are so low. • Both are relatively small markets (particularly BG) • Light trade servicing required - no specific activities. • Variety meats very small & a low priority. • Light trade servicing required around meat trade shows - no specific activities.

14. RUSSIA • A very important market overall. • Beef: • Not the same problem with growth promoter use. • Many high income consumers - ostentatious entertainment habits - price not a problem. • Beef livers - excellent position in the market • MEF done a good job in sustaining interest • Success of product linked to low incomes • Pork: • Good trade servicing job done to familiarize with US product.

15. RUSSIA: PRIORITIES • Leverage high • High quality beef • Augment ABC with chef accreditation scheme • Add chef missions • Develop interest in secondary cuts • Trade missions to focus on developing sales of premium cuts • Leverage modest • Beef liver at retail • Continue with evaluation of sales data to ensure effective. • Low leverage • Pork & beef in processing • Light trade servicing • Pork retail promotions • Need careful testing to identify value of this

16. PRE-BSE EVALUATIONS • Caribbean - pre BSE • Beef: A really good beef program • Real evidence of changed attitudes & changed purchasing behavior among a closely targeted group of buyers. • Well thought out strategy - well delivered. • Pork: • Constraints not so large • Several large companies have relatively easy access to the market without needing MEF help

17. PRE-BSE EVALUATIONS • Mexico - pre BSE • Generally a positive picture - however, we recommended less focus on the consumer & continuing emphasis on retail & food service. Retailers & food service are important drivers of consumer demand & seek US service • Better-off consumers trust the major retailers (& the US regulatory systems) • Taiwan - pre BSE • The program has worked well - beef is the major opportunity & it is essential to keep working there - even more important to be there in post BSE phase • Pork – very price sensitive – light trade servicing to maintain awareness & image.

18. CONCLUSIONS • A generally tight ship in the markets we have looked at. • Key strengths • Carefully defining constraints – target & message • Focus on the things that can be changed with modest funding • Key account program delivery • Open mind about the challenges • In general, continuous questioning of program effectiveness • Willingness to adjust program to meet • Changed market circumstances • Ineffective activities • Quality of the staff delivering the program • Integration of market access work