Simultaneously, Chinese growers have been expanding domestic production, and foreign growers are starting to find their way in China. What has to be done to drive consumer demand for fruit grown in China?
Domestic production trends where discussed at PMA Fresh Connections: China. Speakers indicated that so far the domestic fruit industry has not been meeting consumer demand. Consumers have started to look for higher quality and premium tasting fruit varieties, and shift away from commodity type mass produced apples, pears and bananas. As such, imported products seem to find a better match with people’s preferences than much of the locally produced goods. Or is this changing?
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To the left, Jae Chun, to the right, Mau Wah Liu
Demand for quality is sky rocketing
Jae Chun is the Vice President and General Manager of Asia Pacific at Driscoll’s. Driscoll’s started producing berries in China four years ago and is now growing blueberries and raspberries locally.
“Why we decided to grow in China? We felt we could produce a better domestic berry than any berry currently available on the market. It is about matching consumer demand with what our berry represents,” says Jae Chun.
“Launching local production is challenging and can only be done when the entire value chain is aligned; breeding, variety testing, production, quality control, sales & marketing and retailers.”
“Chinese consumers expect high quality and rewards growers and retailers that can deliver on quality. Retailers are key in making a difference in maintaining quality and merchandising the goods on the shelves. We were delighted to see that berry prices in China can go as high as triple the value in our South American markets. The potential for berries is only scratching the service and we believe there are tremendous opportunities for us and our partners.”
Mau Wah Liu is Chairman of the Board at Joy Wing Mau. He has witnessed China’s fruit industry change profoundly.
“China’s middle class is emerging and demand is changing. E-retailers and retailers have promoted and are promoting domestic fruit consumption. The retail landscape has changes so fast and consumers are now searching, shopping and paying online. We are very positive about the future. China’s fruit consumption still lacks behind global consumption per person and can go up as high as even double.”
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Quality control is key
“Traditional varieties, such as Fuji and Gala, are being replaced by new varieties. New fruits, such are berries, are gaining popularity. Consumers are valuing experiences and positive experience do enhance brand value. It all comes down to quality. Quality control is key. But controlling quality in fresh produce is so much harder than doing so with other kinds of industrial products. We face weather conditions, seasonal changes, challenges in cold chain.”
“What we see is that Chinese consumers have greater demand for quality products and the industry is lacking behind. There are several severe challenges. Large scale apple production has been introduced 70 years ago, trees are ageing and yield is low. A big part of grape production consists of the Red Globe grape variety, which is hardly meeting demand, Finally, citrus greening disease has destroyed significant parts of domestic citrus production.”
“We believe these product categories will witness rapid development in the coming decade: domestic kiwifruit, oranges, new domestic grape varieties, new apple varieties and berries.”
For foreign growers there is also a word of caution; not each internationally successful variety is easy to sell in China. In addition, access to land can be challenging. Engaging the local community is important. Business has to be done in a proper and respectful way and getting the local land lords and village committees on board can be crucial.
Jae concludes: “Blackberries and raspberries are not well known, like avocadoes. What is amazing about China though is the connection between good health and good eating; this is perfect for our industry. That is how products like avocado can have such powerful sales pitch.”