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June 1, 2017

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‘Adventurous food’ trend benefits imports

IMPORTS are a bright spot in China’s food sector, as increased spending power prompts consumers to seek high-quality products or try foreign tastes new to them.

Retail sales of packaged foods in 2016 is estimated at 12.5 trillion yuan (US$1.8 trillion), adding 7.5 percent from a year ago, according to Euromonitor International. The Institute of Food Technologies expected China’s imported food sales to grow 15 percent annually and reach 480 billion yuan by 2018.

The recent Salón Internacional de L’Alimentation (SIAL) China, a Paris offshoot that bills itself as Asian’s largest food innovation exhibition, attracted a record 3,200 exhibitors and 80,000 visitors in late May. Half the exhibitors came from offshore.

Foreign food used to be an exotic, hard-to-find and was only limited and confined to designated specialty shops.

Nowadays, foreign foods find their way into China through a number of channels besides the usual customs route. They include sales through cross-border and e-commerce pilot programs. Various bilateral free trade deals between China and foreign countries often pave the way for sale of imported foods at lower costs.

At the same time, online shopping has enabled smaller vendors to reach out to a vaster and wider consumer base across China.

Shanghai resident Jessie Zhang said she prefers imported seafood and beef when purchasing food for her family, but she isn’t fussy about the country of origin.

“There are so many types and brands to choose from that I don’t remember all the names,” she said. “But I think imported beef and seafood are of higher quality than what I can buy here and are not necessarily more expensive.”

Jim Liu, CEO of SIAL China, said Chinese consumers are seeking out new tastes.

“Consumers here generally have more trust in imported food in terms of food safety issues, processing and packaging,” he said.

Avocado, Western cooking sauces and bakery raw materials are just a few examples of consumers adopting new tastes. The old Chinese saying that “people live on food" has evolved into “people live on adventurous food.”

Thai Union China Co was an exhibitor at the food fair for the first time this year.

The company said it hopes to expand its retail channels here for sale of fresh seafood from Thailand. In the past, the company has focused on the US and Japan.

Lu Libin, general manager of Thai Union China, said the company’s King Oscar brand of fresh seafood is aimed at people who love seafood but don’t have a lot of time to spend cooking it. That opens the door to ready-to-eat meals.

Some 42 percent of Chinese consumers surveyed by market research firm Mintel said they are interested in imported snacks and imported food specialty shops.

US-based J. M. Smucker Co is selling about 20 varieties of jams and peanut butter in supermarkets in about 20 cities in China. It is now looking at bulk sales to domestic caterers and restaurants.

"Jams and peanut butter form a niche market in China, but it is growing very fast with the shift toward Western dining habits,” said a sales representative from the company. “We are hoping to introduce more products into China in the second half of this year."

Foreign food wholesalers have to deal with a highly fragmented food market in China.

"With an increasing level of sophistication and with a wide range of brands, Chinese consumers find it easy to shift from one brand to another," said Marc Ye, a consultant with PwC China's food services.

The majority of imported beef in China comes from Australia, Uruguay, Argentina and New Zealand, according to Chinese customs figures. Consumers often don’t differentiate by country of origin.

Liu of SIAL China said it would be prudent for foreign vendors to group themselves by country or region to present a stronger marketing front.

Some countries are already aware of that. Ulises Forte, president of the Argentina Beef Promotion Institute, told Shanghai Daily that its membership of 24 producers is seeking to expand its marketing reach beyond just coastal areas of China.

Exports to China account for 40 percent of Argentina’s beef exports, rising from 32 percent a year ago.

Martin Rivolta, consul-general of Argentina, said his nation stands ready to increase shipments of fish products, meats and fruits to China to meet rising demand.

"We are aware of the immensity of the Chinese market and its great growth potential,” he said.

At this year’s food exhibition, 70 Argentine producers operated stalls.

Under an agreement between Argentina and e-commerce giant Alibaba, the Chinese company will help bring Argentine products to China via its online retailing platforms.

Russia, touting its organic agricultural products and geographic proximity, is also eager to expand food exports to China.

“Our food trade with China used to be conducted through unofficial channels along the border, which did lead to quality issues,” said A. Evsikov, consul-general of Russia in Shanghai. “We are trying to repair the reputation of Russian food, and we hope more exports will follow.”

Last year, Russia set up an association in Beijing to provide unified quality control for Chinese wholesalers interested in importing Russian food. The Russian Ecological Food and Beverage Manufacturers Association in China has 15 large Russian food companies as its members, with businesses ranging from meat, candies, dairy products and drinks.

Last year, non-oil exports from Russia to China increased by a fifth, and food was a main contributor, said Evsikov.


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