Moo-ving back into China

US beef might be back in the mainland where appetite for the meat has been growing rapidly, but its high price might hamper efforts to gain market share in a country where many people don't know the difference between a rib-eye and a sirloin. Xu Junqian reports from Shanghai.

Liang Jiahao first encountered beef in 2002, in a local chain restaurant called Haoxianglai, which literally means "really wish to come" in Chinese.

The meal was considered a luxury. Liang, who was then a fifth-grader, spent 10 times his weekly allowance on a steak that cost 200 yuan ($30). But it was money well-spent.

"It was the first time I was asked how I wanted my steak done. That completely blew my mind. I never knew there was a scale for the doneness of meat. The only question my mum or grandma would ask me regarding meat is whether I wanted my pork fried or braised," quips the 26-year-old Shanghai native.

Today, as the founder and owner of My Butchery, a trendy butcher and deli in Shanghai, Liang is the one offering choices. Ground beef or steak? Rib-eyes or sirloin? Australian or Brazilian cuts?

The shop, which was opened to fill the gap between overpriced offerings from import supermarkets and the greasy counters at local markets, will soon expand its offerings by including a new product: eagerly awaited US beef.

US beef has been absent in the Chinese market since 2003, when China banned all imports from the US following the outbreak of bovine spongiform encephalopathy, more commonly known as mad cow disease. Exports of US beef to China resumed this month under a new trade deal that followed the meeting of Chinese President Xi Jinping and US President Donald Trump in Florida in April.

"The reinstitution of US beef to China is huge," Sonny Perdue, the US secretary of agriculture, told China Daily on July 1. "Because of the growing middle class and the consumption of good and tasty protein, I think US producers can supply the products in demand here."

While Perdue declined to forecast the volume or value of US beef entering China in the coming years, he noted that US beef producers are eager to satisfy the appetites of Chinese consumers.

"As you know, there has been a boom in the growth of beef in China over the last four or five years, and I am convinced that once Chinese consumers taste US beef, this growth will be 10 or 20 times larger in the coming years," he adds.

"American steak is delicious," says one user on China's Twitter-like Weibo service. "It doesn't have the mutton smell of domestic beef."

Appetite for beef

Per-capita consumption of beef in China, where pork is the most popular choice of meat, has doubled from 2.8 kilograms per year at the beginning of the century to 5.45 kilograms in 2015.

While this amount is small compared to the global average of 6.6 kilograms, the US Agriculture Department has projected that China will this year overtake the European Union as the world's second-largest consumption market for beef, after the US where per-capita consumption is 25.27 kilograms.

Last year, people in China consumed 8 million tons of beef with a market value of 360 million yuan, according to China's Ministry of Agriculture. Domestic beef production rose to 7.17 million tons in 2016, a 2.4 percent year-on-year increase. A demand-supply gap of 830,000 tons is still waiting to be filled.

Before the ban, US beef had a significant market share in China. According to The Observatory of Economic Complexity, US beef accounted for 44 percent of China's total beef imports in 1999. In recent years, Australia and Brazil have become the main sources of imported beef in China, which is currently the world's second-largest beef importer after the US.

Restaurants and hotels in China like Morton's of Chicago and Park Hyatt say they plan to promote US beef soon. But industry players say that the return of US beef is unlikely to reshape the current landscape or oversaturate the market.

"The market is too large and demand is still more than supply. Besides, its high price has restricted it to a very niche group of consumers," says Yang Yiyi, vice-president of Yiguo, a fresh produce e-commerce platform headquartered in Shanghai.

Backed by Alibaba Group Holding Ltd, Yiguo is one of the first two domestic e-commerce retailers to sell US beef in China. The other is Womai.com, an online platform run by the country's largest food trader, China National Cereals, Oils and Foodstuffs Corp.

According to the new trade deal, US beef exported to China must come from cattle no more than 30 months old and be free of any hormones, ractopamine and other chemicals prohibited by Chinese law.

Xu Shangzhong, chief of the China Cattle Industry Association, points out that less than 10 percent of the total beef production in the US meets these stringent criteria.

Warm reception

On Womai.com, a 180-gram US rib-eye costs 38 yuan ($5.60) in a group-purchase special, almost 50 percent higher than a similar deal for Australian beef of the same cut and size. Despite the price tag, interest in US beef is still high. Both websites sold their first batches of meat, 300 kilos from Womai and 700 kilos from Yiguo, within four days.

"US beef has been one of our top searches on the website over the past week," says Tang Xizhen, director of Womai's fresh produce department.

The two websites say most of their customers are between 30 and 40 years old, have an above-average income, are open-minded about Western lifestyles and culinary habits, and prefer shopping for food and fresh produce on online platforms rather than at traditional wet markets.

The growing trend of healthy eating has also boosted the popularity of beef, because of its higher protein and lower fat content than pork.

Despite robust growth, China's beef market is still in a nascent stage where consumers are unfamiliar with the specifics of the product.

"We still see people comparing the price of US fresh prime cuts with Brazilian frozen flank simply because they are under the same category of beef. Also, the majority of beef sold from our website is still prepared in a Chinese way - cooked in soup, braised or wok-fried," says Yang.

"Chinese consumers don't really care about the type of cut or whether the cow was grass-fed or grain-fed. There is only one criteria when it comes to meat - tenderness, be it pork or lamb or beef."

Contact the writer at xujunqian@chinadaily.com.cn