BC Beef Market Development Research Project for Asian Markets in Greater Vancouver

Prepared by Dr. Warveni JapThompson Rivers University

School of Business and EconomicsKamloops, British Columbia, Canada

Saturday, April 20, 2013

Table of Content

• The Summary of the Research Findings

• Canada Demographic Trends

• Canada population trends

• Chinese population trends

• Chinese Diet & Food Consumption

• Chinese Consumer Behavior in Canada

• Chinese Consumer Behavior on Beef Demand

• Research Findings

• Conclusion

• Recommendations

• Q & A

The Summary of the Research Findings

# of Research Trips /Contacts to Greater Vancouver in 2012 --- 1/2

• 2 visits in October 2012 to approach the necessary Chinese connectors and preliminary surveys & contacts with Chinese meat distributors 6 different contacts

• October 5-7, 2012

• October 19-21, 2012

• total 6 days

# of Research Trips \Contacts to Greater Vancouver in 2012 --- 2/2

• 1 visit on December 5-23, 2013 (19 days)

– For preliminary approaching & networking with the Chinese middle-upper end restaurants’ Head Chefs, Purchasing Managers, and Restaurant Owners to build better relationship (or “guanxi”)

– For understanding further about their business needs & wants on beef products 13 contacts

– For conducting surveys & interviews with them

Overview Findings from the Trips in December 2012 --- 1/4

• Unaware the existence of BC Beef – they assumed all Canadian beef are from Alberta

• Would strongly support BC beef – to foster BC local economy – to offer better & healthier beef to their Chinese

consumers

• Those relatively large scale Chinese restaurants prefer to have daily delivery except Sundays

Overview Findings from the Trips in December 2012 --- 2/4

– To maintain the freshness & high quality beef

– Limited storage space in their restaurants due to high daily sales turnover with high inventory turnover

• For better communication, they highly appreciate if the sales rep can speak fluent either Chinese Mandarin or Chinese Cantonese, preferably Chinese Cantonese.

Overview Findings from the Trips in December 2012 --- 3/4

• Do not mind to pay higher price with much higher quality beef

• Provide consistent and sustainable high-quality beef if the Chinese markets accept it very well

• The introduction of BC beef gives them new business opportunities from new menu development

Overview Findings from the Trips in December 2012 --- 4/4

• Samples are needed & necessary for internal experiments and initial trials with their close & loyal customers for seeking their feedbacks

• Seemed very enthusiastically willing to try BC beef samples ASAP

• Superior & mutual trust customer services with Chinese restaurants are crucial for establishing lucrative, long-term, and sound relationship

Demographics

Canadian Population Trends

Canada PopulationNote: Population estimates as of July 1.

Source: Statistics Canada, CANSIM table 051-0005.

1996 2006 2011p

number

Canada 29,610,218 32,576,074 34,482,779

Newfoundland and Labrador

559,698 510,313 510,578

Prince Edward Island 135,737 137,920 145,855

Nova Scotia 931,327 938,010 945,437

New Brunswick 752,268 745,674 755,455

Quebec 7,246,897 7,631,552 7,979,663

Ontario 11,082,903 12,665,346 13,372,996

Manitoba 1,134,196 1,184,031 1,250,574

Saskatchewan 1,018,945 992,122 1,057,884

Alberta 2,775,133 3,421,253 3,779,353

British Columbia 3,874,317 4,243,580 4,573,321

Yukon 31,387 32,276 34,666

Northwest Territories 41,741 43,198 43,675

Nunavut 25,669 30,799 33,322

p preliminary

Canada Population GrowthSource: Statistics Canada, CANSIM table 051-0004.

Immigrants who landed from 2001 to 2006, by region of origin

Source: Statistics Canada, 2006 Census of Population.

Population projection, by visible minority group

2006 20311

thousands % thousands %

Total population 32,522 100.0 42,078 100.0

All visible minorities 5,285 16.3 12,855 30.6

Chinese 1,269 3.9 2,714 6.4

South Asian 1,320 4.1 3,640 8.7

Black 815 2.5 1,809 4.3

Filipino 427 1.3 1,020 2.4

Latin American 317 1.0 733 1.7

Southeast Asian 250 0.8 449 1.1

Arab 276 0.8 930 2.2

West Asian 164 0.5 523 1.2

Korean 148 0.5 407 1.0

Japanese 85 0.3 142 0.3

Other visible minorities

213 0.7 489 1.2

Rest of the population 27,237 83.7 29,222 69.4

Source: Statistics Canada, Catalogue no. 91-551-X.

Demographics

Chinese Population Trends in Canada

Chinese Immigrants/Population in Canada --- 2010

Description Population Size Remarks

Canada 34,000,000 approximately

Chinese Populationin Canada

1,269,000 4% of total Canada popul.30% of BC popul.

BC Population 4,473,321 13% of Canada popul.

BC Immigrants 831,265

Chinese Immigrants 381,535 46% of BC Immigrants;Mostly live in Greater YCR

Chinese Population Distribution in Canada

Rank Province Population

1 Ontario 596,980

2 British Columbia

407,225

3 Alberta 120,275

4 Quebec 79,830

Total 1,204,310

Greater Vancouver Map

Chinese Population Distribution in Canadian Major Cities ---2006

City Population Remarks

Toronto 486,330

Vancouver 381,535

Montreal 72,105 ↑ 38%

Calgary 66,375

Edmonton 47,200

Ottawa 32,445

Chinese Population Size in BC & Canada

Year Population SizeIn British Columbia

Population SizeIn Canada

2010 407,225 1,204,310

2017 600,000 1,800,000

Chinese Population Distribution in Greater Vancouver --- 2006

City Population% of Total

Population of the City

Vancouver 168,215 29.4

Richmond 75,725 43.6

Burnaby 60,765 30.3

Chinese Diet & Food Consumption

Chinese Consumer Behavior in Canada

• Avg. household

income: $104,000

• Middle-aged

• Travel abroad frequently

• Drive luxury cars

• Attend investment shows

• Go to a lot of classical music concerts

• Active in community affairs

• Donate $$$ to political & cultural groups

• Mostly university-educated consumers

• Early adopters

• Patronize high-end stores for the latest in fashion & technology

Chinese Consumer Behavior

& Perception on Demand

Chinese Consumer Behavior on Beef Demand

• Freshness

• Hygine & Food Safety

• Convenience

• Fat / Tenderness

• Price: very price sensitive

• Internal Organs

• Other Consideration/ Consumption

– Highest in winter

– Lowest in summer

– Is thought to increase strength & stamina often considered a man’s food

– Consumed by women & children is encouraged as a healthier alternatives to other protein options

Research Findings

Q #1: What is the value of the following attributes of locally produced beef to you and your guests eating

experience? (n= 11)

Attributes HighlyValued

Valued Slightly Valued

No Value

Taste & juiciness 64 % 27 % 9 % -

Consistent tenderness 73 27 - -

Supporting the local economy 36.5 45.5 18

Reducing food miles 18.5 45.5 9 27

Health aspects (no antibiotics & growth implants)

45.5 54.5 - -

Environmental sustainability of production systems

28 36 18 18

Dry aging 14 days 18 37 27 18

Which sample (different levels of finish) would you prefer in buying BC Beef?

Types of Samples

%

Tenderloin 50

Short loin 28.6

Striploin 14.3

Boneless 7.1

Other Kobee Beef, AAA

If Okanagan’s Finest or a similar BC Beef Brand can offer all of the items you have chosen as having value, what % premium are willing to

pay over the commodity brands?

% Yes( % )

No( % )

Remarks

5 – 10 - - Depends upon the price is a generic answer.

10 – 15 - -

15 – 20 - -

25 – 30 - -

Other - -

The BRAND name of the supplier is very important for our business

Yes(%)

No(%)

100 -

Do you currently know the origin of the beef you are buying?

Yes( % )

No( % )

36 64

Have you heard of any brands of BC Beef that have been grown, finished, and processed in BC and are

free of antibiotics and growth implants?

Yes( % )

No( % )

27 73

Appropriate MEAT CUTs are very important for our business

Yes( % )

No( % )

91 9

We buy the following types of beef

Types of Beef Minimum( lbs / week )

Maximum( lbs / week )

“nin nan” (Chinese stew) 10 60

Shanks - 20

Stir Fried Beef 20 100

Short Beef (thick meat, short bones)

- 30

Tripe 15 30

Beef Tendon 30 40

Ground Beef - -

PACKING SIZES are very important for our business (1/2)

Yes( % )

No( % )

Remarks

100 --Prefer:

• 10 lbs/pack• 25 lbs/pack

PACKING SIZES are very important for our business (2/2)

PreferredSize

Yes( % )

No( % )

SMALL 36.5 -

MEDIUM 45.5 -

STANDARD 18 -

Prefer Package with

Yes( % )

No( % )

Does Not Matter ( % )

55.5 - 44.5

Customer Services

Description Yes( % )

No( % )

Prefer sales & service directly from the producer brand

55.5

Prefer sales & service thru our existing distributor 64

Prefer the sales rep can speak Cantonese with us 82

Prefer the sales rep can speak Mandarin with us 82

Would you be willing to work with a BC Brand, and to accept frozen product to assist them in growing their capacity

82

Customer Service: Delivery

1-2 Times/Week Daily(except Sundays)

63 % 37 %

Payment

Preferred Method of Payment

Yes( % )

No( % )

TT (electronic bank transfer) - -

Cheque 91 -

Cash - -

Other - -

Preferred Payment Due Date

Preferably within 30 – 60 days after delivery

Any Comments or suggestions to BC Beef Industry for better business relationship with

your company? --- (1/3)

• Fair & reasonable prices

• High quality products

• Good and sustainable delivery

• Chinese sales service appreciated

• Strongly support BC beef

Any Comments or suggestions to BC Beef Industry for better business relationship with your company? --- (2/3)

• Advertise BC Beef in both languages (i.e., English and Chinese)

• The Association should sponsor the Annual BC Chef of the Year for promotion

• Interested in trying the sample from the Association

• Ask food experts to make menu to promote

Any Comments or suggestions to BC Beef Industry for better business relationship with your company? --- (3/3)

• BC Beef needs to be promoted more aggressive

• Look forward to the samples

• Open to have new relationships with other beef supplier

Conclusion

Conclusion --- 1/2

• Chinese population in BC is growing rapidly that consists of 30% of Greater Vancouver’s population

• They are affluent & educated consumers

• High-quality lifestyle oriented

• The beef demand for Chinese markets in Greater Vancouver is untapped and significant

Conclusion --- 2/2

• The high-end Chinese restaurants are eager to try and promote BC beef to their business, and also are willing to support local economy

• Unaware of BC beef products and brand

• Prefer to have Chinese sales rep

• Look forward to establishing sound & long-term relationship with BC Beef Industry based on mutual trust and benefits

Recommendations

Recommendations --- 1/4

• Unaware of BC Beef brands & products can be perceived as an excellent business opportunity to expand BC Beef brands & products to Chinese markets in Greater Vancouver if proper brand management and delivery services are implemented strategically and professionally.

Recommendations --- 2/4

• Adopt niche marketing strategy for differentiation strategy and profit optimization

• Chinese put a great deal of loyalty and mutual trust & benefits in their business relationship

Recommendations --- 3/4

• Develop bilingual (i.e., English & Chinese) meat chart + code number

• Provide the requested samples timely for their trials and developing new menus with BC Beef

• Eventually, may need a strategic-alliance distribution center in Lower Mainland for providing better services and logistic coordination to the Chinese clients

Recommendations --- 4/4

• Design and create the concept of “green marketing,” event marketing, and buzz marketing activities to promote BC Beef brand awareness to Chinese Asian markets in Greater Vancouver successfully, efficiently, effectively, and profitably.

• Actively participate and sponsor in BC Beef Day to create and promote BC Beef brand

Event Marketing

1. Greater Vancouver Oliver ranches

2. BC Beef Association reps Greater Vancouver