Ricardo Vernazza-Paganini, director of the Central and South America regions for the U.S. Meat Export Federation (USMEF), says he has been sowing seeds in Guatemala in the past year and they continue to take root.
Vernazza-Paganini is not growing corn for ethanol production or even cane for sugar production. Instead, he is growing demand for U.S. beef products and his final crop is about ready to sprout.
Vernazza-Paganini analyzes Central and South American markets to design USMEF activities and identify U.S. beef products that will appeal to consumers in each market. In Guatemala, prices for U.S. beef are high and consumers are loyal to domestic products.
Guatemala is slightly smaller than the state of Tennessee and is the largest and most populous Central American country with a per capita income roughly one-half that of Brazil, Argentina, and Chile. The agricultural sector accounts for approximately one-fourth of the gross domestic product, two-fifths of exports and half of the labor force.
“Prices of U.S. beef in Guatemala are much higher compared to the domestic beef products, so many consumers are unable to afford U.S. beef,” said Vernazza-Paganini.
To address this market condition, Vernazza-Paganini created a three-phased program to first train a USMEF partner company in Guatemala to fabricate beef sub-primal or value cuts.
“Using a company based in Guatemala reduces the cost of fabricating different beef cuts, which results in a lower and more affordable price for U.S. beef items,” Vernazza-Paganini said.
The second phase of the project concentrated on putting specific U.S. beef cuts on restaurant menus. USMEF met face-to-face with restaurant managers and chefs at casual dining chains, like Applebee's, to present attributes of three U.S. beef cuts and how other restaurants successfully marketed those cuts in a similar program conducted by USMEF in Guatemala last year.
USMEF and Tony Mata, a well-known meat scientist and consultant in the U.S. industry, presented information on tenderness, cooking methods and uses of the flat iron steak, petite tender and ranch cut, which all come from the chuck and are considered value cuts.
“We identified cooking methods and cutting techniques that are suitable for each cut, allowing flexibility for individual restaurants to create different dishes with these cuts,” said Vernazza-Paganini. “We did not want restaurants to feel they had to prepare the cuts to the American taste. Instead, the program allows them to make adjustments to prepare dishes that will appeal to their consumers.”
The cuts were renamed to appeal to a Latin American taste of equating high-end products with Americanized names. In Guatemala, the flat iron steak is known as the California steak, while the ranch cut is known as the Texas fillet.
The final phase of the program starts in May with a promotion that runs through October. USMEF is conducting the promotion with restaurants visited in the seminar phase in order to promote the three value cuts.
“The promotion phase begins with local and cable TV advertisements to draw in a wide audience and is supplemented by billboards, print ads and point-of-sale materials at each restaurant,” Vernazza-Paganini said.
USMEF conducts a survey before and after the promotion to identify its success. Last year, a similar program resulted in sales 3-to-4 times higher after the promotion.
“Importers in this market feel these three cuts are here to stay,” Vernazza-Paganini said. “USMEF has helped establish affordable U.S. beef products in Guatemala. The seed has been planted and it is growing. Next, I will look for another area to plant a new seed.”
U.S. beef exports to Guatemala last year increased 52 percent in volume to 787 metric tons and 29 percent in value to $2.85 million compared to 2005.
The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, lamb, corn, sorghum and soybean checkoff programs.