Turners & Growers (T&G) is opening an office in China on 1 August to support the rapid growth of its business in the world’s most populous market, Asiafruit can reveal.
The leading New Zealand-based fresh produce marketer and distributor has set up a wholly-owned foreign enterprise based in Shanghai, with subsidiary Delica being the commercial entity for T&G’s China platform.
Ignacio Smith, who previously headed up Chilean company San Clemente/Vitalberry’s China trading operation, will run T&G/Delica’s new China office with support from two local staff and T&G executive Nick Fitzpatrick, who is based in New Zealand. The team will also work closely with T&G’s importers in China, and the global network of T&G/Delica offices.
T&G CEO Alastair Hulbert said the initial focus of the operation would be to provide on-the-ground sales support in China to the group’s existing customers, and to help develop its marketing and merchandising. “We’d also like to increase our penetration into the second and third-tier cities,” Hulbert told Asiafruit.
T&G’s business in China has grown sharply over the past five years, according to Fitzpatrick, who said the group felt the current sales volumes and future growth potential warranted some investment in people on the ground.
“Most important for us is having the right team in China to work with our customers and global offices, and to support the business,” said Fitzpatrick. “To that end it has taken a while to go from talking about a China office to setting it up, but we now believe we have the right person to head up the operation.”
Smith brings a significant amount of experience to the position, having played a key role in setting up and running the San Clemente/Hortifrut China trading platform in Shanghai over the past four years. Prior to that he worked for San Clemente in Chile, a role in which he had regular customer liaison with T&G’s staff. “We have always been impressed by Ignacio’s enthusiasm and work ethic, and we’ve been very impressed with what he has achieved in China so far,” said Fitzpatrick.
Sales and marketing support
Fitzpatrick confirmed that T&G’s China office will not be involved in trading to begin with, but will focus on sales and marketing support for its current business.
“It’ll be similar to the models we’re already running successfully in Japan and Singapore,” he said. “Our in-market staff are primarily focused on supporting and adding value to our existing programmes and improving communication and trust between customers and suppliers. They’re not designed to be profit centres in their own right. At some point we may look at getting involved in some form of trading in China, but it’s not a priority.”
T&G’s export programmes into China are fairly diverse, encompassing supply from its spread of operations in key global supply origins. “We have our own production, primarily Enza apples, kiwifruit and New Zealand-grown citrus. We also have traded product from third-party growers, which forms the base for our Latin American business based in Peru, and for our offices in Australia, North America and South Africa,” Fitzpatrick explained.
One of the objectives for T&G in China is to diversify its sales channels to some degree, he said. “We’d like to build our presence beyond the traditional wholesale markets of Guangzhou and Shanghai, and develop our products via retail and online platforms,” he said. “We’re already doing this to some extent with our import partners and want to work closely with them to achieve further penetration.”
A more immediate concern is the recovery of meaningful access to China for New Zealand apples with a sound working protocol, however, Fitzpatrick noted.
“Our volumes increased dramatically from 2012 to 2013 with better access, but then the revised protocol for the 2014 season has meant our volumes have been significantly reduced,” he said. “Yet demand for our New Zealand apples is as strong as ever, particularly for our Jazz and Envy varieties.”
