Darling Downs Wagyu blazes $50m-a-year trails in Korea

Australian beef's solid reputation - 30 years in the making - for being safe, clean, green and excellent tasting is naturally a big part of the equation. So too, South Korea's increasing affluence and taste for beef.

Ultimately, however, it's been the ability to supply a consistently high-quality product that connects with what consumers are asking for that has done the trick.

And that, according to both AACo and the big Korean supermarket chain that retails Darling Downs Wagyu, E-Mart, comes down to never faltering on the promise made through a brand and knowing the consumer.

AACo believes brands are the future for the 200-year-old business, Australia's oldest and largest cattle company.

Right now, it is building brand relationships with new customers around the world. Its work with E-Mart and its Korean distributing partner OK Meats taught AACo much about building brands, and it will use that to compliment the premium food service business, where its focus lies in other markets.

Most beef in Korea is generically labelled by country of origin, with Darling Downs Wagyu one of the only international consumer-facing beef brands in Korea.

E-Mart senior buyer Somin Lee, in Australia this week, said Darling Downs Wagyu sits between the highly-marbled domestic Hanwoo - regarded as the most superior 'special occasion' beef - and other imported options, mostly from the United States.

Darling Downs Wagyu has worked for E-Mart because of the high trust and affinity Korean beef eaters have with Australian product but mostly because of it's taste, she said.

"Korean customers tend to think marbling is linked to better flavour and this product has good marbling," she said.

"If you think about the value, there is nothing else to choose."

The majority is sold in store but Miss Lee said online sales were growing.

It has been heavily promoted over the years by E-Mart.

"We enhance the selling points that it is from the clean Queensland Darling Downs region and grain-fed for consistency," Miss Lee said.

Korea has the highest per capita meat consumption in Asia and relies on imports for around 64 per cent of its beef requirements.

2019 marks 30 years since Australian beef marketing started in South Korea and today the market accounts for 15pc of Australia's total beef exports.

AACo chief executive officer Hugh Killen said the company's ability to deliver high quality beef at scale depended on the strength of its value chain partnerships.

"These relationships allow us to connect our beef, our brands and our story to more customers every day," he said.

"We are executing on this global strategy right now and as we do, we constantly draw on lessons we have learned from our relationship with Emart and OK Meats."

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When AACo started working with these two partners, the company was on a learning curve, Mr Killen said.

"We had been presented with a global market opportunity. Concerns about existing beef supply opened that door and we knew we could provide a reliable supply of a quality, healthy product. We were able to fill that market need," he said.

"But we knew that short-term opportunities could be fickle.

"We needed to rapidly establish trust with our distributors and with E-Mart and through them, we needed to get to know our customers."

AACo began with an initial supply of less than 100 metric tonnes in 2003 and last year supplied around 2,000 metric tonnes at a value of $32m to E-Mart alone.

This year, that number will likely be outperformed again.

To capture the opportunity, AACo's production system was reconfigured.

Aronui feedlot at Dalby was acquired, allowing steady production of animals to be fed into the Darling Downs brand.

"We made our Aronui investment because of the potential we saw in branded beef in Asia," Mr Killen said.

"And the potential of relationships like the one we have with E-Mart."

A key lesson learned, he said, was around what it means to understand the customer.

"Emart is an innovator. They are able to use the product AACo provides to develop new offerings for their community," Mr Killen said.

"These include different value cuts of meat, unique product presentations and new offerings, like specially-designed meal packs.

"AACo has worked to supply the particular cuts and beef products Emart wanted."

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