Nation’s farmers cater to taste for foreign foods

Patricia Kontur was surprised when the blueberry export business to China was hit by a sudden slump last year, after five years of consecutive gains.

The slump was not caused by shrinking demand but by rising competition in the mainland, said the export program director of the Wild Blueberry Association of North America, which oversees blueberry farms in Maine.

“Domestic players may not have heard of ‘blueberries’ just a decade ago. But now many of them can mass-produce the berries and guarantee Chinese consumers a much lower price,” she said. “You just can be in awe of what China can accomplish.”

Imported foods, until recently a rarity in China, are becoming more and more common, buoyed by an increasingly affluent population and high-profile food scandals.

The US Association of Food Industries has forecast that China will become the largest consumer of imported foods, having a market of 480 billion yuan ($76 billion) in 2018.

A noticeable shift has occurred within the past five years: Chinese food companies are looking to produce cheaper versions of Western foods, squeezing the margin of foreign exporters.

For instance, the blueberries previously available in China primarily originated in North America.

But domestic production of the fruit skyrocketed, showing compound annual growth rate of 134 percent from 2007 to 2010 and hitting 5,000 tons by the end of 2010, according to a report by the Chilean Fresh Fruit Exporters Association.

More than 10 blueberry companies, registered in the past five years, have set up operations in China’s northeast provinces, where soil requirements and climate conditions are perfect for growing such fruit, data from the Blueberry Research Institute of Dalian University show.

The Chinese fruit is a lot cheaper, too. Dalian Blue Health Agriculture Development Co Ltd sells wholesale fresh wild blueberries for 30 yuan per kilogram, less than half the price of imported US fruit.

On other fronts, Chinese consumers’ growing appetite for cheese has offered another avenue for innovative local businessmen.

US dairy exporters have started to feel the pinch in the past two years when they witnessed diversified flavors of cheese products being introduced by local players.

“We definitely see this trend, that Chinese dairy producers like Bright Food (from Shanghai) and Sanyuan (from Beijing) are upgrading their formulas to include chocolate- and cherry-flavored cheese,” said Jiang Yan, vice-president of PR Consultants Ltd, which represents the US Dairy Export Council in China.

In the US, cheese is supposed to be salty, Jiang noted. As this association tries to educate the market about how American cheese preserves the most nutrients, she admitted that domestic counterparts have edged ahead by catering to local tastes.

Dong Xu, mother of an 8-year-old boy, said she is a big fan of the impressive selection of imported gourmet cheese offered by City Shop, the largest chain store in Shanghai, which has an extensive range of imported food.

“People are afraid of gaining weight by eating cheese, but they hardly know it benefits the body since it is rich in calcium, vitamins and minerals,” Dong said. “While it is not a Chinese tradition to eat cheese, I have my son eat one piece of cheese during breakfast.”

The Chinese demand for imported US food reached $22 billion in 2011. It not only jumped 10-fold in volume in the past 15 years, the market has also “moved up the value chain”, said Keith Schneller, agriculture director of the US Agricultural Trade Office in Shanghai.

“In the past, US exports to China were primarily for re-processing and re-exporting to other advanced economies like Japan and South Korea, but only in these five years (have we seen) the ‘in China for China’ trend, and it applies across sectors including dairy, seafood and berries,” he said.

Du Xiaoxin, a master’s degree candidate at Fudan University, shells out up to 200 yuan a month buying imported foods, including ingredients, snack foods and beverages. That is close to 10 percent of her monthly disposable income.

Du developed a taste for Western food while studying overseas, and she said eating those foods now reminds her of cheerful “tea times” she had abroad. “So, the price is not that a big deal,” she said.

To beef up the market, the US Agricultural Trade Office coordinated 75 US companies and food associations to exhibit real American products at the 13th China International Food and Beverage Exhibition in Shanghai. The show also drew other food exporters who wish to cash in on China’s huge market potential.

Mister Potato, Malaysian’s top potato snacks maker, has been targeting China’s teenagers and young adults since last year, after having successfully expanded to 80 countries.

In order to edge out competitors like Pringles and Lays, which came into China earlier, the company is creating elaborate promotion campaigns, including awarding lucky Chinese consumers free trips to the UK to meet with members of the Manchester United football team, said Leong Yuenlin, a company executive.

“It is a great opportunity for us as China is opening its huge market,” said Hector Lescarbura, director of the Argentine Beef Promotion Institute.

At present, 15 Argentine exporters are permitted to sell beef in China. Many more are waiting for the permission or have expressed an interest, Lescarbura said.

“It takes a long time and it is very difficult to pass China’s quality testing, but the market here is worth the effort,” he said.

Nation’s farmers cater to taste for foreign foods|Business|

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