China and other markets in Asia have the capacity to absorb surge in Chilean cherry volumes, says JWM Asia’s GM of trade, Danny Guo. But he cites quality control, channel diversification and targeted marketing as key to success
Pre-season forecasts tip the Chilean cherry crop to grow by almost 60 per cent in 2024/25. China is expected to take most of this extra production. Does China have the capacity to consume the increased volume without significant price depreciation? Is there enough packing, shipping and logistics capacity to handle and ship this kind of volume?
Danny Guo: JWM Asia is excited for the coming Chile cherry season. Together with the Joy Wing Mau China team, we have been actively preparing our distribution platforms to lead the industry’s Asian cherry distribution. In anticipation of volume growth, we have been working closely with industry stakeholders, including our supply and distribution partners, as well as airlines and shipping lines to ensure our ambitious targets are met.
Last year, supply was affected by the weather, making this year’s increase seem even more significant. Structural investments have been made by the industry on the production side to accommodate this growth. For example, new packing facilities with state-of-the-art packing lines and automation have been added to optimise efficiency. In terms of shipping and logistics, significant strides have been made to prevent bottlenecks by utilising various ports for cherry express vessels and ensuring quick distribution, allowing for efficient penetration of second- and third-tier markets.
What are the keys to a successful season in your view?
DG: There are a few key factors. First and foremost, quality control is crucial. As long as the shipment arrives in a good condition, the fruit should continue to flow, even more so at a lower price. Poor quality arrivals will get stuck and potentially congest the market.
Secondly, it is critical to diversify through various sales channels to grow the business sustainably. Extra efforts need to be made to penetrate different market segments and expand the total addressable market. With unprecedented volumes being sold and markets still recovering from the post-Covid slump, price expectations should be managed carefully.
Finally, marketing activity will be essential. Due to the current economic environment, consumers are more selective on their spending, and there is a lot of choice. Therefore, targeted and localised marketing campaigns will be important to increase exposure and consumer preference. Our local teams are working closely with our partners to plan these tactics, including collaborations with various retailers across the region. Packaging designs and formats will also be impactful to differentiate and expand market segments. For example, luxurious gift packaging options with attractive designs, weighing 1kg, 2kg, and 2.5kg, are typically favoured for gifting, whereas clamshell punnets and bulk packs are more preferred by consumers due to their affordability.
Do you see other markets in Asia such as Vietnam, Thailand, Korea and India taking a higher percentage of the Chilean cherry crop this year?
DG: With growing industry volumes, it’s critical to diversify into different markets. Each market is at a different level of maturity, and it’s clear that Asian markets still have a lot of room for further growth. Generally, Korea and Taiwan are the most established, but Vietnam is the rising star in the region. Thailand will remain an important market where cherries are very popular.
India presents a significant growth opportunity for the Chilean industry. Efforts have been made to improve logistical solutions, which will be key to supplying the market with the shortest possible lead times.
What are the main challenges to export diversification?
DG: One of the main challenges remains the unstable market environments in the post-Covid slump. Markets will be volatile and could change drastically in a short period of time.
Having said that, cherries are one of the fastest-growing categories in terms of consumption in South-East Asia. They are the number one product to excite both distributors and consumers. In recent years, most markets have experienced ups and downs, but cherries are usually amongst the products least affected.
Furthermore, logistics could pose a potential challenge. While the cherry express vessels are reliable, we have encountered frequent delays during transshipments to Asian markets. Joy Wing Mau Group has put additional efforts into this area to control supply chain variables as much as possible.
This interview features in Fresh Focus Cherry and the November edition of Asiafruit Magazine. For more stories from the latest edition of Asiafruit Magazine visit the Asiafruit app
