Nonghyup beefs up its ‘Quality Assured’ brand
“As the price of meat is much cheaper than nearby butchers, as well as restaurants, and as we only use 100 percent Korean beef that Nonghyup supplies, customers continue to visit us,” said Seo Eui-sik, managing director of the restaurant.
The Quality Assured Korean Beef Town’s Bucheon restaurant sold first-class Korean beef at 8,900 won ($7.72) per 100 grams last Tuesday, about half the price of other restaurants, where the same meat went for 16,000 won to 18,000 won, and cheaper than nearby butchers who sold it for 10,600 won.
“As the cost of having Korean beef at this restaurant is cheaper than purchasing meat from butchers, we always come here whenever we eat out,” said Kim In-sik, who was having dinner with his family.
Currently, there are Quality Assured Korean Beef Town restaurants in Gildong in Seoul, Bucheon, Anyang and Cheonggye Mountain in Gyeonggi, and Gwangju in South Jeolla.
“Restaurant owners who changed to Quality Assured Korean Beef Town are all satisfied, saying that after they went with the brand, sales have been increasing,” said Lee Yong-ha, economic strategy team manager at Nonghyup.
The reason for cheaper Korean beef compared to other restaurants is that Nonghyup directly slaughters and processes the meat without going through wholesalers or other middlemen.
“Nonghyup introduced its own brand, Quality Assured Livestock, to stabilize prices of livestock products during the second half of last year” said Nam Sang-woo of Nonghyup. “General restaurants or butchers can use the Quality Assured brand only if they sell livestock products supplied by us.”
Varieties of Quality Assured Livestock include Korean beef, pork, chicken and duck, all of which are 100 percent domestically produced and supplied by Nonghyup.
Normally, for livestock products to be sold to consumers, the products go through collectors who purchase cows and pigs from farms, slaughterhouses, auctions, processors and intermediate wholesalers and retailers.
“We saw the distribution margins reduced by 20 percent after shrinking the distribution structure by two to three steps. Farmers could receive higher prices and consumers could purchase at cheaper prices,” said Nam.
As of the end of last year, among the total domestic consumption of beef, Quality Assured Livestock beef supplied by Nonghyup accounted for 11 percent and pork 5 percent.
By 2020, Nonghyup aims to have 50 percent of the local beef market and 40 percent of the pork market.
“As restaurants and butchers that deal the Nonghyup Quality Assured Livestock products emerged, it contributed to lowering the overall prices of livestock products at nearby competitors,” said Nam.
Currently, in addition to the five Quality Assured Korean Beef Town restaurants, 300 butchers nationwide use livestock provided by Nonghyup.
Nonghyup plans to increase the number of Quality Assured Korean Beef Towns to seven by the end of this year and 11 by 2016.
It also wants to increase the number of butchers of the livestock products to 500 by the end of this year and more than 1,000 by 2016.
“In the case of Seoul, if there is only one restaurant with Quality Assured Livestock by Nonghyup established for each 25 districts, the prices for Korean beef will be significantly lower,” said Nam.
BY JANG JUNG-HOON [email@example.com]