Wagyu Beef Market Size, Share & COVID-19 Impact Analysis, By Type (Fullblood, Purebred, and Crossbred), By End-use (Foodservice Channels and Retail Channels), and Regional Forecast, 2022–2029

The global wagyu beef market size was valued at USD 21.42 billion in 2021. The market is projected to grow from USD 22.64 billion in 2022 to USD 34.87 billion by 2029, exhibiting a CAGR of 6.37% during the forecast period 2022-2029. The global COVID-19 pandemic has been unprecedented and staggering, with Wagyu beef experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 4.82% in 2020 as compared to 2019.

Wagyu beef is a premium beef cut available in the market, which is explicitly developed from cattle breeds found in Japan. The cattle breeds in Japan are Japanese Black, Japanese Brown, Japanese Polled, and Japanese Shorthorn. The geographic isolation of Japan and the regional climatic temperature helped it to develop unique cattle strains. Therefore, their genetic composition helped them develop intra-muscular fat and a unique taste not found in other cattle breeds.

Apart from its unique taste and appearance, beef is also beneficial for the body. This beef is rich in Conjugated Linoleic Acid (CLA) and considered healthy compared to other beef products. Furthermore, different meat varieties need to be hung to help them age and make the muscles tender. On the other hand, this meat is made up of intramuscular fat, due to which its composition is lean and tender and does not require hanging.

COVID-19 IMPACT

Disruption in Supply Chain during Pandemic Negatively Impacted Sales and Production Process

Japan, one of the largest manufacturers of Wagyu meat, was significantly impacted during the pandemic. The manufacturers produced large quantities of products, especially for tourists, which were expected during the Summer Olympics game. As the Olympics was postponed during the pandemic, the manufacturers held vast quantities of such meat in their storage facilities. They could not export their products to other countries, which impacted the global supply chain.

The governments placed strict restrictions on public gatherings and ordered public places to be closed during the initial phases of the pandemic to prevent the spread of the disease. Hence, public places, such as restaurants and hotels, were closed during the pandemic. A significant portion of Wagyu is sold through food service channels. Fine dining restaurants, steakhouses, and other hotels order this beef meat in large volumes for their consumers. The restrictions imposed by governments in different countries significantly hampered sales through these channels and plummeted during the pandemic's initial phase.

The auxiliary materials which helped in beef production and maintained a steady supply of meat to the consumers were also significantly impacted during the pandemic. For instance, carbon dioxide is one such product used on cattle before slaughtering that keeps meat products fresh as they are transported. As all production facilities were impacted by the lockdown and the spread of infection among workers, production was halted, creating a shortage of carbon dioxide supply in the market. This impacted companies' ability to produce fresh meat and transport such products from one region to another.

The importing countries undertook strict regulatory measures to prevent the spread of the disease among the population. This includes placing a temporary ban on Wagyu meat importing abattoirs that suffered from virus outbreaks. For instance, in 2021, the General Administration of Customs of the People’s Republic of China (GACC) temporarily banned the product shipment from Teys Naracoorte Plant in South Australia.

As the pandemic hit different parts of the world, several business dinners were canceled, and travel restrictions banned tourists from traveling. This created significant challenges for the industry on ways to offload the beef manufactured by the cattle breeders. In the initial days, meat farms in Kobe, Matsusaka, and Yonezawa were impacted by a significant amount of meat in their farms. As per the report provided by the National Beef Cattle Advancement Fund Association of Japan, the cold storage facilities were filled out during the pandemic. The decline in visitors and lack of dining-out options impacted manufacturers to sell their excess meat in the market. Therefore, to sell their extra meat products, the manufacturers identified new avenues, such as supermarkets, where Wagyu meat was added to the list of special items and sold for 20-40 cents compared to the normal prices.

LATEST TRENDS

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Rising Adoption of Food Items Beneficial for Human Health to Influence the Market Growth

In recent years, the demand for natural and unprocessed food and animal protein products, such as meat, has increased considerably as they are free of additional hormones or additives that may harm one’s health. Such product type is becoming popular among consumers due to the growing perception that these are premium beef cuts that are healthier than traditional beef and beneficial for health compared to conventional beef varieties.

Furthermore, the COVID-19 pandemic has spurred a new trend of cooking at home, supporting the global growth of the market. During the first few months of the pandemic, restaurants, hotels, and supermarkets were closed due to government-imposed lockdowns in various countries. This forced consumers to buy ingredients through online stores and prepare their meals at home. Consumers who wished to enjoy a fine dining experience from their home's comforts switched to online portals to purchase their beef items.

DRIVING FACTORS

Rising Demand for Animal Protein among Health Conscious Consumers to Propel Market Growth

Rapid urbanization globally and an increase in the number of people getting employed in the formal sector are significant factors contributing to the growth of disposable income in the population. Furthermore, changes in the dietary pattern of consumers also influenced the animal protein consumption pattern in several countries such as China and Indonesia. Thus, the demand for beef products is increasing rapidly in such markets.

The overall increase in protein consumption has also positively impacted the rise in demand for premium beef cuts globally. A significant number of consumers are willing to spend their income on products that have health benefits. Therefore, the demand for premium products is also rising among consumers.

It is known for its health benefits, unique taste, and appealing features. It is healthier compared to regular beef products making it suitable for consumers who are health conscious. The LDL content in Japanese beef is low due to high levels of omega-3 and omega-6 fatty acids. This also makes it favorable among consumers who prefer tasty and healthy meat. Hence, despite its premium price, consumer demand for such products has gradually increased globally, which is driving the Wagyu beef market growth.

Increased Trade Activities among Countries Promote the Sales of Wagyu Beef Globally

In recent years, the manufacturing countries have entered into a trade agreement with major beef-consuming countries to trade it. Such trade agreements help manufacturing countries access new markets and increase market presence in those regions. For instance, in March 2022, Japan entered into a trade agreement with the U.S. where a low tariff quota was placed on the Wagyu meat imported to the U.S. from Japan. Such tariff quotas help to boost Japanese breed beef exports from Japan to the U.S.

Such manufacturing companies are exploring various product distribution channels, such as online portals, to reach out to their consumers directly. For instance, the Wagyu shop is an online website where consumers can purchase their meat cuts. This increases the number of avenues consumers can access to purchase the products. Hence, the sales of such beef have increased significantly in recent years.  

RESTRAINING FACTORS

Strict Regulatory Policies Related to Wagyu Cattle Breeding to Hamper Market Growth

The cost of raising Wagyu cattle is much higher and more complicated than raising normal cattle. Farmers grow different breeds in varied ways in each region. The breeding time and feed required to raise the cattle are much higher than the time and feed needed to raise normal cattle. Hence, the cost to farmers to raise Wagyu cattle is high.

The widely popular black Angus cattle matures quickly compared to the Wagyu cattle. Wagyu cattle also need a low-stress environment so that beef quality is not affected. Excessive stress on the cattle poorly impacts the meat's tenderness and flavor. Thus, such cattle cannot be raised in a stressful space and breeding environment. Raising cattle in a low-stress environment requires a huge open grazing field, thus, increasing the production cost. Hence, the production cost accrued by the farmers to raise Wagyu cattle is high.

Governments adopt strong regulatory policies worldwide to ensure that the standard and quality of beef are maintained. The majority of the fullblood variety is generated from the Japanese cattle breed, and it is difficult for other countries to replicate. Furthermore, the Japanese government has established strong restrictions on exporting cattle to other countries, making it difficult for other countries to replicate the cattle breed. This makes it difficult for meat manufacturers to develop such beef on a large-scale basis.

SEGMENTATION

By Type Analysis

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Fullblood Wagyu to Dominate the Market Owing to its Rich Flavor and Superior Marbled Appearance 

There are three types of Wagyu cattle breed available in the market, fullblood, purebred, and crossbred. Fullblood refers to cattle that are 100% bred with Wagyu cattle and have not been crossed with any other cattle breed. Purebred cattle refers to cattle that contain 93.75% of Wagyu cattle DNA and crossbred Wagyu is derived by crossing male Wagyu with Angus cattle.

Among these breeds, fullblood shares a higher market share than other breed types as it is the most sought-after meat among different varieties and holds premium market prices compared to other Wagyu varieties.

Apart from fullblood, the share of crossbred is also expected to increase significantly in the future as several countries are trying to develop their flavor of Wagyu by crossbreeding Wagyu cattle with their indigenous cattle variety.

By End-use Analysis

Foodservice Channels Segment to Remain Dominant due to High Volume Sales of Products through this Segment

By end-use, the market is bifurcated into foodservice channels and retail channels. A significant proportion of this beef is sold through the foodservice channels such as restaurants, steakhouses, and hotels. Fine dining restaurants launch new products, which specifically suit the need for consumers who are looking to enjoy premium beef products. Thus, manufacturers sell these products in bulk quantities through these channels.

The COVID-19 pandemic has significantly influenced the purchasing behavior of consumers, where more consumers are opting to purchase their products through supermarkets and online portals. A certain segment of consumers is looking forward to enjoying a restaurant-like meal from the comfort of their homes. Hence, these beef sales through retail channels are expected to increase significantly in the future.

REGIONAL INSIGHTS

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Asia Pacific is one of the largest manufacturers in the world. Some of the major producers of this beef in the region include Japan and Australia. Apart from the producer market, some major beef-consuming countries are also present in the region. China, Australia, and Japan are also some of the major consumers of this beef globally. Japan is one of the largest producers of Wagyu in the world and has designated beef as its national treasure. Hence, to maintain its exclusivity, the country has banned the export of live animals from Japan to other countries. Moreover, the country has also established stringent policies and guidelines that help to ensure that the quality of products is maintained.

China is one of the major consumers and imports a significant portion of its beef from Australia and Japan. For instance, Wagyu beef cuts from Australia take around 15 days to reach the refrigeration cabinets of China. In addition, new retail shops are opening in Beijing, which sell a wide range of Australian variety in the market. As the product is not readily available in the Chinese market, it has to invest significant revenue to improve its cold chain logistics to ensure that the beef remains fresh and fit for consumption. Cambodia has become one of the region's largest importers of Wagyu beef. The country imports the beef and sells this beef to China and other Asian markets at a higher price. As China placed a long-term ban on Wagyu import from Japan, the rerouting of beef from Cambodia helped to ensure that authentic Japanese beef is still available for consumers in China.

There is tough competition among Wagyu beef manufacturing countries to maintain their exclusivity especially in the Asia Pacific region. Therefore, companies are adopting several measures to enhance their brand image among consumers. For instance, Mayura Station, a producer of full-blooded Wagyu meat, provided unique feed to its farm animals to improve their taste and flavor. The cattle manufacturers consult with an animal nutritionist and use a unique solution of chocolate mixed feed for the cattle. This helps to make the beef taste sweet and enhance its overall flavor.

The North American market is primarily driven by rising consumer awareness about the product and the increasing willingness of consumers in the U.S. to pay the premium price for heavily marbled and good-quality meat. A recent research conducted by the Blackmore Beef Wagyu company found that consumers are looking for high-marbled grading products; therefore, the importance of these products has increased significantly in recent years. Increasing awareness regarding the consumption of these products and related health benefits are key factors expected to drive the market's growth. Wagyu cattle deposit a high percentage of unsaturated fat compared to other beef and are rich in omega-3 and omega-6, essential fatty acids. Moreover, Canada's producer-led Verified Beef Production program provides customer assurance of food safety at the farm and feedlot levels. Therefore, consumers are more inclined toward such products, which will increase the sale of these products in the coming times. Certain companies are adopting stricter regulatory standards to improve the production of such products and compete with other regional players. For instance, the U.S.-based Vermont Wagyu company has stricter standards and higher quality than most domestic beef breeding programs.

The overall beef consumption in Europe is impacted by the industry's environmental, economic, and societal impact. These factors are interconnected and play a crucial role in European beef consumers' purchasing patterns. Furthermore, beef consumption in the region has declined by 10%, as per the Organization for Economic Co-operation and Development (OECD) data. Despite the declining demand for beef, the demand for lean and additive-free meat among consumers is stable and expected to grow. Consumers have become more conscious about their food choices and are willing to pay a high price for premium food items. Therefore, there is a significant growth opportunity for the manufacturers in Europe.

Major exporting countries, such as Japan, are continuously collaborating with European partners to increase consumer acceptance. Europe also signed a free trade agreement with the significant beef manufacturers in Japan to allow the import of expensive beef into the market. This has helped to reduce the 30% import duty levied on the products; instead, zero taxes are levied on these meats. This is a major opportunity for the manufacturers to expand their regional presence. In the early 1990s, the beef industry suffered from Bovine spongiform encephalopathy (BSE) disease, which eroded consumer trust in beef products and negatively impacted the market’s growth. Hence, to ensure that beef products are safe for consumption, strong regulatory policies have been adopted that aim to ensure that bovine meat is safe for consumption. 

Demand for this product is increasing in South America due to dietary changes of consumers who want to enjoy innovative and healthy premium meat products. As they experiment with new dishes in their restaurants, demand for this beef in the market is increasing, and beef manufacturing companies are looking to offer consumers innovative, delicious, and healthier dishes. For instance, Japan exports them to South America and hopes its premium cuts will become as famous as dishes such as sushi and ramen.

The climatic conditions of South America make it difficult to rear cattle and it is a challenge for manufacturers as breeding of Wagyu breed with domestic cattle results in low reproductive success, making it difficult to produce these premium beef cuts in the region. Wagyu cattle embryo transfer provides a potential means by which Wagyu cattle can rapidly increase breeding and genetic improvement at a higher rate. Therefore, Brazil is using Superovulation protocol (SOV) technology for better cattle embryo production to get good quality beef. It is heavily promoted in Brazil as consumers in Brazil prefer to eat wide varieties of beef. Therefore, Japan exports more products to Brazil. The Japan External Trade Organization and several other groups demonstrating the beef industry in the country were hosting an event at a Sao Paulo restaurant to promote premium meat. In these events, 100 Brazilian guests, including local restaurant operators, enjoyed tasting marble meat to promote Japanese meat.

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A significant proportion of the Muslim community resides in the Middle East and Africa and are major beef consumers worldwide. Therefore, in this region, the manufacturers have the advantage of increasing awareness among the consumer by using some marketing strategies. Moreover, with protein, the consumer wants delicious tastes, usually juicy and tender in taste. This consistent quality taste can be used in different meals, such as burgers, and purchasing them is easy and convenient. Therefore, the demand for this beef is increasing in the markets such as the United Arab Emirates and Saudi Arabia, where beef has traditionally been viewed as a common protein. The growth of the fast food and hotel sectors is further changing the diets of the young and wealthy, resulting in increased high quality beef consumption and spending growth.

KEY INDUSTRY PLAYERS

Key Players are Expanding their Product Portfolio and Market Presence in International Markets to Gain Higher Market Share

The global market exhibits a fragmented structure consisting of several small companies. The small players in the industry are constantly competing with each other to gain a high market share in the market. Some of the major players in the market include regional players such as Australian Agricultural Company Limited, Starzen Co., Ltd, Agri Beef Co., and other major regional players in Australia and Japan. These manufacturers are continuously exploring new markets and opportunities to expand their existing distribution channels and increase their presence globally. They also provide unique facilities such as free shipping to enable consumers in international markets to access the quality food product easily.

LIST OF KEY COMPANIES PROFILED:

• Blackmore Wagyu (Australia)


• Agri Beef Co. (U.S.)


• Australian Agricultural Company Limited (Australia)


• Starzen Co., Ltd (Japan)


• Stockyard Pty Ltd (Australia)


• Lone Mountain Wagyu, LLC (U.S.)


• Jack's Creek (Australia)


• Sugar Mountain (U.S.)


• Stanbroke (Australia)


• Beefcorp Australia Pty Ltd (Australia)

KEY INDUSTRY DEVELOPMENTS:

• June 2022: Matilda 159 Domain, a U.S.-based restaurant, introduced a limited-time Wagyu item on its menu named Blackmore Wagyu tomahawk steak. Such a limited-time offer helped to create positive word of mouth among consumers and create interest among people to try these items.


• September 2021: Blackmore Wagyu, one of the renowned Australian Wagyu beef providers, added a new grass-fed breed of this product to its product line. The demand for the grass-fed beef is high from the fine dining restaurants in Australia; hence, the new launch will help Blackmore to increase its sales and revenue.  


• August 2020: Agri Beef Co. partnered with beef producers in the Jerome, Idaho area to build a new beef processing facility known as True West Beef. The partnership is based on a strategy to provide beef processing solutions to the companies affected by the COVID-19 pandemic-induced disruptions.


• June 2021: Cuker partnered with Mishima Reserve to use digital marketing to reach and effectively engage an audience that loves American Wagyu beef and steak. The partnership jointly developed disruptive strategies that helped Mishima Reserve differentiate itself on digital channels.

REPORT COVERAGE

An Infographic Representation of Wagyu Beef Market

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The global market research report provides detailed market analysis and focuses on key aspects such as competitive landscape, source, and distribution channel. Besides this, it offers insights into global Wagyu beef industry trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market growth in recent years.

Report Scope & Segmentation