U.S. Mad Cow Disease: Trouble for Japan’s Largest Beef-Bowl Chain

By Takayuki Fujiyoshi, Director, NPD JapanCREST

In December 2003, news from the U.S. shocked the Japanese foodservice market: The first Bovine Spongiform Encephalopathy (BSE or “Mad Cow Disease”) was found in the U.S. The Japanese government immediately took action to stop importing American beef. As of early September, the ban was still in effect.

Which Japanese restaurants were influenced by this the most? The most obvious guesses would be steak houses and hamburger chains, yet the restaurant segment hit hardest by the news has been Japan’s unique beef-bowl chains.

Beef-bowl, a bowl of white rice with stewed beef, is very popular among men in Japan, and is Japan’s answer to fast food. Yoshino-ya, the largest beef-bowl chain, was a well-known for its fast service, good prices and tasty food. Yoshino-ya achieved all of this with a nice profit because the company limited its menu to serving only beef-bowls and used only American beef.

By early February 2004, Yoshino-ya had used up all of its American beef stock and could no longer serve its signature item. As a result, Yoshino-ya quickly lost its share of the beef-bowl category, dropping from 48% to 36% of the market. At the same time, Matsuya, the second largest chain, grew from 31% to 39%. The largest difference between the two chains was that Yoshino-ya focused almost exclusively on beef-bowls and could not supply alternative offerings. Matsuya, on the other hand, offered a variety of menu items and could attract consumers even without beef-bowls.

Source:The NPD Group/JapanCREST Ltd.

With the BSE-related changes in the beef-bowl market, Yoshino-ya’s user demographics changed. The percent of business from men dropped from 89% to 83%, implying that “Yoshino-ya fans” had walked away from the chain. Moreover, customer satisfaction (top two boxes out of a five-point scale) dropped from 83% to 71%.

NPD’s ability to monitor the impact of BSE on Japan’s beef-bowl restaurants stems from its UTIL CREST service, part of JapanCREST Ltd. UTIL CREST is a foodservice consumer panel service in Japan that allows food and beverage manufacturers and operators to track the total foodservice market, category share, major chain share, user demographics, customer satisfaction and more. To find out more about UTIL CREST, please contact Takayuki Fujiyoshi at +81-3-5350-7684 or e-mail takayuki_fujiyoshi@npd.com.