Chia-Yuan Lu （China Productivity Center Agricultural Innovation Department）
Background 1—The imported pork from the U.S. and issues of domestic husbandry and food safety
It was announced in late 2020 that the market for pork imported from the U.S. will be open and all major supermarkets, stores, restaurants, and meat vendors should label the country of origin of the meat products. This has aroused the consumers’ doubt on the authenticity of the labels and also the growing concern on the food safety, particularly those on the place of origin and the drug residues. This has caused great impact on the food products that have not been verified and labelled.
With this in consideration, the major domestic livestock product operators have enhanced their value-added services to meet the needs of the consumers. The alliance of local agricultural brands has a considerable amount of business opportunities. They take the chance to hold on to the major domestic channels, and also to reduce the impact of the imported US pork.
Background 2—The rise of new media and the growth of online consumption
The rapid development of the Internet and the mobile devices has changed the way of life, and the consumption is gradually shifting from physical stores to online shopping. Therefore, it has become a key to integrate offline and online experience in marketing. The Covid-19 pandemic has led to the decline of brick-and-mortar sales and the rise of e-commerce, and the home (otaku) economy. It is estimated that about 55% of otakus make decisions of purchase by watching videos of KOLs. This shows the impact of social media on consumers’ behavior.
If mobile devices can be used as social media to inspire more KOL programs and their followers, more business opportunities will definitely boom further with the home economy. However, as the amount of Internet information is exploding, it is getting more difficult to convey information to key consumer groups, and the decentralization of platform channels and the collection of the consumer data for analysis are undoubtedly the key to operations. The traditional sheep farming has no choice but seek further development. Successful use and transformation of platforms and networks is essential to providing services at the demand of the consumers.
Domestic sheep farming industry in change
To resist the continued decline of the sheep farming industry, many operators have made investment on the operation of brand and social media. The Covid-19 pandemic changed the local consumption patterns and increased the demand for domestic meat products. The expanded market coupled with the clean production environment could have built a new monument of the industry. Most sheep farms, however, are conservative and failed to enlarge the production. Some benchmarking operators are aggressive enough and achieved significant growth in sales. They continue to adjust their pace along the trend, shoulder the task of driving the entire industry, and constantly develop new driving power for the industry, to truly form a cross-sector competitive niche.
Therefore, the key of expansion is to promote the products and services to new consumers while maintaining the current market. On this basis, the promotion is targeted on customer groups with different needs from the past so as to develop new opportunities. However, it is not easy to change a conservative industry. Past achievements, experience and prosperity often hinder the effort for growth and innovation, like a comfort zone hard to depart from. This is a common problem for traditional industries, but it also keeps reminding some operators of the necessity to make adjustment along with the trend of consumption.
Stabilize the management foundation of the brand
The rapid development of social media and the information explosion have intensified the business competition. At the same time, there is the huge impact brought by digital competition. The brand may vanish in the competition if the management foundation is not strengthened.
To meet the needs of the consumers in the digital era, many domestic sheep farms have promoted their brands by optimizing their brand stories, business stories, visual merchandising design, corporate identification (CI) systems, etc. Feng Yuan goat Farm (豐園畜牧場), for instance, exercised brand optimization in marketing and divided its fresh meat products from the cooked mutton in a way familiar to the customers, and successfully added values to the products. Goat World Leisure Farm expanded its business scope from restaurant service to frozen meat home delivery. This has developed new channels and products, and also incorporated a leisure image to Goat World Leisure Farm.
The marketing promotion model of the Meat & Livestock Australian (MLA) is an inspiration. The development strategies are planned from the perspective of the other party’s resources. Even in an almost oligopolistic local market, where lamb is consumed all year round, they never hesitate to invest in promotion. Thematic media advertising is heavily promoted to enhance consumers’ confidence and pleasure in cooking at home. As for international market promotion, the strategy is to emphasize the product origin (Australian red meat) as the brand itself. Through the collaboration between the supermarkets and other channels, marketing effort never ceases through free sampling, recipes and video presentation to enhance consumers' awareness and interest of the Australian brands. The above examples show us that the domestic sheep industry in Taiwan must change the traditional management models. The direct problem is that the existing traditional channels are no longer sufficient to support the future development of the industry. It is an inevitable challenge to develop multiple channels through brand building.
Provide product experience through various channels and enhance consumer interaction
In order to break through the existing service framework of the brand and enhance the power of the brand, domestic sheep farming operators now follow their past marketing experience to move towards new models of branding, channel development, and individualized consumer communication.
For example, Shi-Er-Yue Goat Meat (拾貳月羊肉) built its own website to attract consumers scattered on various e-commerce platforms, and continued to introduce digital promotional programs to communicate with consumers; New Life Milk (新生活羊乳) makes audio visual interviews to identify target consumers using differentiated publicity models on different media platforms. Goat Barn Goat Milk (羊舍羊乳) gathered the actual pain points on goat milk of consumers, and designed themed graphic illustrations to interact with consumers. Besides, in addition to fresh goat milk, new products are developed (yogurt, steamed buns, etc.) for business expansion. Immugoat Goat Milk focuses on consumer groups who are interested in fitness exercises and have KOLs assist in the promotion. They also have restaurants help promote their goat milk products and increase brand visibility.
The key promotion and improvement strategies adopted by various operators indicate a great variety in their perceptions of the consumer market and the demands. The domestic sheep farming industry needs to be encouraged to expand the business opportunities. Regardless of the scale, as long as they are willing to sell goods on different channels, there are always ways to find out the potential channel market through all kinds of sales promotion activities.
The past experience of the use of domestic mutton in local restaurants encountered a lot of difficulties. The main reason is that consumers did not have adequate knowledge or demand for the ingredients or the cooking, so that chefs in restaurants had no interest in developing higher quality dishes using local mutton. The past promotion did not aim at a large enough scope of consumers, so that more effort is needed in the future on the promotion of consumer knowledge. The proportion of pull and push strategies need also be adjusted. The customers need to be pulled to the product. With the prevalence of the Internet and the media platform, the volume and the heat should be carefully maintained, to attract more restaurants or consumers who are not yet familiar with domestic mutton products.
The penetration strategy can be used to seek exposure on the Internet. KOLs can be invited to help with promotion. Restaurant can be given incentives to use domestic mutton for dishes and expand its business. Dedicated restaurants and culinary schools can be invited to design and develop new mutton cuisines. A tripartite cooperation between industry, government and academia can exert a good product experience and strengthen the connection and interaction with consumers.
Instill the correct consumer knowledge and create pleasant consumption experience
The introduction of resources through government assistance has helped domestic sheep farming operators exercise various marketing channels, such as the use as food ingredients and sales in department stores. The experience in other poultry and livestock industries has also been absorbed to reduce the cost of learning. The key, however, still lies in the changes in the consumers’ perceptions. For goat milk, the slogans like "Cool drink for summer", "Good Nutrition Absorption" and "Good Fitness Partner", with the image of the young generation of Internet celebrities are all attractive to young consumers. Of course, the industry needs to be careful to eliminate possible difficulties in the cold chain technologies to maintain the fresh taste and to make sure to protect the hard-earned new market.
Goat milk does not match with a lot of ingredients. It takes some imagination to develop creative items. For example, goat milk bread or bagels can be developed for household consumption. Goat milk can be added to puffs, avocado milk and coffee as desserts or in Internet celebrity shops. With a certification system, these products can maintain a taste of good harmony and quality. For reasons of the breeding rate, species, and feeding method (and feeds), diseases, etc., the unit price of domestic mutton is high. Some operators have adjusted the feed formulas to reduce costs. However, the price of domestic mutton is still not competitive with other domestic white meat and red meat, let alone the low-priced mutton imported from New Zealand and Australia. Therefore, it is definitely necessary to build a connection between mutton and high-end consumers. Besides, mutton is only suitable for stewing and stir-frying in Chinese cuisines, which restricts its sales channels. Therefore, the development of high-end channels and consumers is still much needed.
High-end restaurants need high-CP value ingredients to reduce costs, but they care more about consumers' satisfaction. In addition to finding more restaurants that already use domestic mutton for joint promotions, there is the need for more special cooking techniques with more parts of the mutton used. Various cooking skills need to be exercised on various parts, and standard cooking recipes should be designed to transfer correct consumer knowledge, and create good consumption experience.
Conclusion: Cooperation between industry, government and academia to absorb more expertise and experience
Many domestic sheep farming operators reduced the proportion of their traditional business models (such as goat milk delivery) and attempted new business models. Entering a new market of course means new risks. The consultation and advantageous policies by the government, the link between the operators and the market, and the close collaboration between the farms, the slaughterhouses, and the marketing channels, and the revitalization of the sources all need the shared common goal for all the stakeholders. Now that the industry is facing a promising prospect, it is a true need to have the close cooperation between industry, government and academia in both the production and the marketing.
The future goal is to erect the benchmark for the domestic sheep farming industry. A structure should be developed for the larger businesses to lead the small ones to form a solid sheep farming business chain. Then it is possible to supply high quality mutton with traceable records to chained restaurants like 12hotpot and Ootoya with the hope to increase the marketing channels and the scope of the industry.