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Market Research for the Promotion of
Argentine Beef in China
Industry Update July 11th , 2018
2
China’s Beef Industry – a snap shot Fragmented, under supplied but improving
Overview China’s beef industry is fragmented. 11 million producers produce 53 millions heads of cattle and an industry output of 7.2M Tonnes of
beef in 2016 with a value of USD 73million. (Source: GIRA) Typical production systems are grass feeding (majority) and feed lotting (emerging), where animals are fed for 7 months to 500kg and
95% of China’s beef farmers are small (<10 head).
Down stream segment is consolidating, investments in processing plants shows an upward trend and there is a trend to deal with end users directly, primarily through e-commerce
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China’s Market Access Map 16 Countries enjoy access and more will follow
16 countries are allowed to export beef products to China:
Argentina, Australia, New Zealand, Chile, Costa Rica, Uruguay, United States, Canada, Brazil, Ireland, Mexico, Hungary, Belarus, Mongolia, UK and South Africa
Source：AQSIQ
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Frozen beef import volumes 2017
Origin Import volume (Tonne)
Import value
（Million USD) Average price (USD/Tonne)
Share (%)
Brazil 197,565 872 4,414 29
Uruguay 195,874 641 3,273 21
Australia 109,840 593 5,399 20
New Zealand 79,107 382 4,829 13
Argentina 86,334 370 4,286 12
Canada 8,977 79 8,800 2.64
U.S. 1,937 20 10,325 0.67
Costa Rica 3,754 14.9 3,969 0.50
Chile 4,113 14.6 3,550 0.49
South Africa 967 4.3 4,447 0.14
Mexico 33 0.2 6,061 0.01
Ukraine 27 0.13 4,815 0.004
Hungary 2 0.009 4,500 0.0003
Total 688,530 2,991
Note: market share is based on import value
Source：China customs data
Brazil 29%
Uruguay 22%
Australia 20%
New Zealand 13%
Argentina 12%
Others 4%
Frozen beef imports by origin
Imports of frozen beef in 2017 were 688,530 tonnes valued at 2.9 Billion USD The leading five importers Brazil (29%), Uruguay (22%), Australia (20%), New Zealand (13%) and Argentina (12%), totaling 95% of
imports
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Average beef price export to China
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
20.000
USD/Tonne
Average beef price export to China
Chilled FrozenCountry Chilled
(USD/Tonne) Frozen
(USD/Tonne)
U.S. 19,030 10,325
Canada 8,800
Mexico 6,061
Australia 11,166 5,399
New Zealand 6,596 4,829
Ukraine 4,815
Hungary 4,500
South Africa 4,447
Brazil 4,414
Argentina 4,286
Costa Rica 3,969
Chile 3,550
Uruguay 3,273
U.S. beef shows the highest price for both chilled and frozen beef among all the contrives New Zealand has the the lowest price for chilled beef, approximately 3 times lower than U.S. chilled beef Uruguay has the lowest price for frozen beef, approximately 3 times lower than U.S. frozen beef
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Chilled beef import by origin 2017
Origin Import volume (Tonne)
Import value
（Million USD) Average price (USD/Tonne)
Share (%)
Australia 5,911 66 11,166 90%
U.S. 268 5.1 19,030 7%
New Zealand 379 2.5 6,596 3%
Total 6,558 73.6
Note: market share is based on import value
Source：China customs data
Australia 90%
U.S. 7%
New Zealand
3%
Chilled beef imports by origin
Chilled beef imports were 6,558 tonnes valued at USD 73.6 Million The three leading importers are Australia (90%), USA (7%) and New Zealand (3%) Chilled beef creates a “halo” of premium image around countries with chilled access
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Chinese beef consumption Steady consistent consumption growth
Source: AAC interviews and analysis, and MLA reports 2018
Current consumption level is around 6.5kg per capita beef in 2017 (MLA) expanding to 8.1kg per in 2027 (GIRA) Beef consumption is forecast to grow to 7kg per head by 2022 creating a demand of 10 m tonnes and increase of 1M tonnes on 2017 The Chinese Government is increasing pressure on food safety and traceability, this will have some effect on the grey channel but it will
remain as an important source of imported beef.
0123456789
2012 2013 2014 2015 2016 2017 2022f 2027f
Beef per capita consumption
Kg
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Consumption trends First Tier cities dominate consumption
Source: AAC interviews and online survey, MLA reports
• First Tier cities such as Beijing, Shanghai and Guangzhou are the largest cities that consume beef. 50% of First cities respondents consume beef once to twice a week compared to a 38% level in other cities
• Offline modern retail plays an important role in the beef market. 42% of survey respondents purchase beef from offline modern retailers
• E-commerce is an increasingly important platform in China, particularly for imported beef. Although it is still a market segment accounting for a small market share it is expected to grow at a faster rate than traditional retail (at around 15.9% compared to 9.5% in offline modern retails) (Source: MLA)
11%
19%
28%
42%
0% 10% 20% 30% 40% 50%
Online
Specialist
Traditional market
Modern retails
Where beef consumers purchase beef
38%
50%
0% 20% 40% 60%
Other cities
Tier 1 cities
Comparison of beef consumption frequency between First Tier cities and other cities in China
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Reasons to purchase beef The reason why you purchase beef
Source: face to face interview and online survey
Health and taste are the most popular reason why consumers purchase beef
47 45
38 35
24
0
5
10
15
20
25
30
35
40
45
50
Health Taste Diversity Beef make you more strong Easy to cook at home
%
Reason of purchase beef
% o
f imp
ortan
t reason
The least important reason
The most important reason
Not very important reason
Important reason
Generally important reason
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Beef purchase location Preferred beef purchase location and purchase frequency ?
42%(222 out of 531) respondents prefer to purchase beef in modern retail/ supermarket Face to face was in supermarkets, traditional markets still dominate for beef purchases locations. Online is an emerging channel for beef especially for fresh/chilled beef, due to the cold chain logistic limitations
Source: face to face interview and online survey
Modern retail/supermarke
t 42%
Traditional market
28%
Specialist butcher 19%
On line 11%
Beef purchase location
42
40
36
31 30
19
26 27
0
5
10
15
20
25
30
35
40
45
Modernretail/supermarket
On line Specialist butcher Traditional market
%
Beef purchase location
Once a month Twicea month 3 timesa month 4 times a month Others
% o
f bee
f pu
rchase
frequ
ency at lo
cation
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Criteria to purchase beef What is the most important purchase criteria when purchase beef
Source: face to face interview and online survey
Quality is the most important criteria, followed by price. First Tier cities focused on quality whereas Tier 2 cities have a closer quality : price ratio
71
44
34
27
0
10
20
30
40
50
60
70
80
Quality Price Traceability Country of origin
%
Beef purchase criteria
% o
f the
mo
st imp
ortan
t criterion
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Country of origin Is the country of origin important when purchasing beef?
Know 60%
Do not know 40%
Awareness of country origin
Source: face to face interview and online survey
60% respondents know the country origin of the beef products they purchase 75% respondents believe country origin is very important
Important 75%
Unimportant 25%
Important of country origin
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Awareness of Argentina Consumers awareness and association with Argentina?
Know 86%
Do not know 14%
Awareness of Argentina
Purchase Argentina wine
23%
Purchase Argentina beef
12%
Others 65%
Association with Argentina
86% of respondents have heard of Argentina 23% of respondents have had the experience of consuming Argentine wine Many respondents know Argentina because of the football Team (60%)
Source: face to face interview and online survey
17
Experience with Argentine beef Have consumers tried Argentina beed and are consumers interested in trying Argentine beef?
Have not tried 82%
Have tried 18%
Experience with eating Argentina beef
Interest 64%
Are not interested
(36%)
Interest in Argentina beef
Source: face to face interview and online survey
18% of respondents have tried Argentine beef There is a good interest to try Argentine beef as 64% of respondents would like to try Some of the respondents mentioned that they may have tried Argentina at restaurants without their knowledge, since some of the restaurants only said it is imported beef.
