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Snow Dragon: China's premium branded beef

Photo: Wholesale themed restaurant.
Wholesale themed restaurant.

The success of the Snow Dragon Group in securing the top spot in China's high-end beef industry is down to five factors in particular – breeding, stock raising, cattle identification, high-end market positioning and effective marketing.

1. Breeding

The high cost of Snow Dragon Beef is mainly down to the breeding programme involved. The company says: "There are three conditions for premium beef quality: breed improvement, breeding method and the living environment. Our focus is on breeding."

The key to successful breeding lies in breed resources. Snow Dragon selected five major Chinese breeds of yellow cattle, including Luxi yellow cattle and Yanbian cattle, then cross-bred them with other breeds of yellow cattle from around the world. The company said: "Limousin cattle from France, Angus from America and Wagyu from Japan, for instance, were all selected to be cross-bred with Chinese cattle in order to cultivate a new breed. As China has never produced snowflake beef, we only have bulls but no high quality cows. The demand for cows is quite considerable within the industry."

When it comes to the breeding of beef cattle, Snow Dragon adopts a model that utilises the resources of the company, the breeding bases and the farmers. The company accesses cows owned by the farmers for cross-breeding purposes. The lactation and pregnancy period then takes place at the farmers' premises. The company said: "Calves reaching six months are acquired and then bred at the bases."

As well as cross-breeding, Snow Dragon's second method of breeding is embryo engineering in situ at a laboratory. In 2002, the company secured embryos from Australia for breeding Snow Dragon black cattle. Researchers from an Australian veterinary company then came to work at Dalian Snow Dragon's biological engineering laboratory in 2006. Since that time, Snow Dragon has also launched an embryo production programme via in-vitro fertilization.

Currently, 70-80% of Snow Dragon cattle breeds are cultivated via cross-breeding, with the other 20-30% bred by embryo transfer technology. In future, these two methods are to be used in parallel to enhance beef quality, with the company saying: "The base of embryo production will be expanded on the one hand, while cross-breeding will also be applied on calves bred from the embryos on the other."

2. Stock raising

The Snow Dragon Group has also pioneered a more humane way of fattening cattle, using music, massage, soft bedding, warm water and cooked food. For an extensive period of time - as the breeding cycle of Snow Dragon cattle is comparatively long - the beef was quite nutritious, but not at all tasty. This resulted in a failure to rear top-grade beef in China. In view of this, Snow Dragon decided to make an important change to its breed cultivation programme and rearing methodology in order to improve the quality to a premium grade. Snow Dragon beef is now said to have become genuinely tasty, meeting the highest consumer expectations.

3. Cattle identification to ensure quality

Snow Dragon cattle are all clearly individually identified. This identification system was developed by the company and is known as the "Snow Dragon Beef Quality Safety Traceability System". The system established a database that covers the whole rearing process from birth to slaughter. Electronic files relating to Snow Dragon cattle are created and accessed via electronic ear tags on each head of cattle. These are present from birth until the fattening stage. Detailed information of the growing process of each head is available at all times in all locations through these "ear tags". After slaughtering, the information on the electronic ear tag is then stored on barcodes. The origin of each part of the beef products can be traced through the barcodes tagged onto each section. The successful development and application of the system has provided a crucial safeguard for the rapid growth of the business.

4. High-end market positioning

Snow Dragon currently has 30,000 heads of cattle, of which more than 10,000 are Snow Dragon black cattle. Each head produces an average 250kg of beef. This figure is expected to increase by more than 30% a year in future. Currently, Snow Dragon beef is fetching about Rmb2,000 per kg.

Photo: Snow Dragon beef experience store.
Snow Dragon beef experience store.

The major clients for Snow Dragon products are famous restaurants and hotels across the country. Explaining its current positioning, the company said: "At present, our market share is relatively low. With product supply falling short of demand, high-grade beef is always in tight supply. In light of this situation, high-grade beef in hotels is priced at upwards of Rmb2,000 per kg."

In order to guarantee premium beef quality in the high-end market, Snow Dragon has installed a comprehensive process traceability system to ensure close tracking of its beef quality.

5. Effective marketing system

Snow Dragon adopts a unique and innovative business model that sees it combine operating a "fresh beef supermarket" with a "wholesale themed restaurant". When entering the busy road at the junction of Minsheng Street and Tianjin Street in Dalian's popular Zhongshan Square, it is difficult to miss the European-style building mounted with a sign announcing: "Snow Dragon Beef". As an exclusive food plaza run by the company, the shop consists of two parts:

Photo: Snow Dragon fresh beef supermarket.
Snow Dragon fresh beef supermarket.

i. Fresh beef supermarket

The fresh beef supermarket is unique in style With an indoor blue sky, a model of the modernised Snow Dragon farm, the ambience of a villa-style cowshed, as well as sculptures of a herd of golden cattle and examples of Snow Dragon cattle, its impressive decor has become a genuine visitor attraction in its own right.

On the first floor, the supermarket displays a rich variety of premium-grade fresh-cut beef. Advanced modified atmosphere packaging is used to extend the shelf life of the beef for up to 10 days. In addition, there are spot sales of spiced beef, beef sausages, buns, dumplings and other cooked food products. Other products - ranging from Australian red wine Durif and Japanese Shochu, to all kinds of condiment and sauces, hot pot and BBQ utensils as well as kitchen cutlery - are also available. It is expected that group purchase, home delivery and festive gifts will become the company's mainstream sales channels here. A delivery service of sliced beef to restaurants and major supermarkets will also be launched.

ii.  Wholesale themed restaurant

The wholesale themed restaurant is no ordinary restaurant. Customers can freely select their own favourite beef products in the fresh beef supermarket on the first floor at nationwide uniform retail prices. The restaurant staff will then serve the food selected in the supermarket to the customers on the second or third floor. The restaurant will only charge a service fee or the fee for a private room (exclusive of side dishes and hot pot broth). Customers may also bring along their own drinks at no charge in order to fully enjoy a meal of premium-quality Snow Dragon beef.

Commitment to quality from farm to table has evidently paid off for this Dalian-based group.

Nancy Liu, Dalian Office

Content provided by Picture: HKTDC Research
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