Marketing Conference pears as a baby food may seem like an odd proposition, but in China this is exactly what Dutch supplier Fruitmasters is attempting. After being granted access to the Chinese market in 2014 the company has looked for innovative ways to gain a foothold in the market.
Parts of the B2C campaign have been conventional, such as the creation of quintessentially Dutch packaging bearing windmills and a label saying ‘Produce of Holland’, but the decision to target young parents, and turn the fruit’s sometimes mushy texture into a marketable quality, is less predictable and more ingenious.
Thanks to their softness, particularly when well ripened, Conference pears are perfect for babies, the firm believes, and given the degree of care and attention that Chinese parents are known to show their children, the company could well be on to something. The supplier has handed out free pears and branded baby bibs to young parents – a tactic that proved highly popular on social media.
The Chinese market, currently off limits for British topfruit exporters, could present opportunities for UK companies too, but some have reservations over how much demand there would be for British-grown produce. “Do they want the size of fruit we grow?” asks Mark Culley, managing director of OrchardWorld. “China generally wants quite large fruit, which could work against UK exporters, but at the moment we can’t even explore the market because there’s no access to it.” In spite of this, Culley says that if his company were able to access China, “it would be good to be able to look at it”. And given the distrust of Chinese food safety standards among many of the country’s consumers, there is high demand for fruit grown under stricter European regulations.
In other parts of Asia, OrchardWorld has already developed small but growing export links, sending “handfuls of containers” of Gala apples to Hong Kong and Malaysia predominantly. Culley says he would be “quite happy” to build up the business’s exports arm in these markets, having studied them over the past three to four years.
He sees big opportunities in many Asian countries due to the high demand for smaller apples – a trend well suited to British production, especially given the fact that France and Italy – two of the main apple exporters to China – tend to grow larger fruit sizes. Price is a problem, however, with French and Italian producers selling off their undersized volumes at highly competitive prices.
“Producers in France and Italy don’t set out to grow small apples so they will sell them cheaply,” Culley explains. “Last year an 18kg box went down in price to as little as $16-17 and we’re not going to compete at that level.”
In the Asian countries that British topfruit firms already have access to, most notably Hong Kong, Culley has been impressed by the level of assistance offered by the UK government. “You’d be amazed how much support there is from government to grow an export business,” he says. “It hasn’t been difficult to find markets; it hasn’t been difficult to engage with importers in those countries. Having said that, there’s a big learning curve that you have to go through – whether it be price, specifications, boxes or transit times. The fruit’s on the water for 30-odd days, which is not something we’re used to with UK-grown fruit.”
One European country with more experience in topfruit exports generally is Belgium, with Tony Derwael of Bel’Export pointing out that, unlike the UK, Belgium is an established exporter of pears around the world. At present, the company exports roughly 80 per cent of its total volumes, with the majority of exports heading to Russia (indirectly), the UK, France, Spain and Scandinavia.
Exports to China and the Middle East only account for around five per cent of the fruit that Bel’Export markets, but Derwael recognises the potential that a market the size of China brings. “We understand that because of China’s big domestic supply we will never export volumes like we did before to Russia. But if we can reach a small percentage of consumers among the 1.4 billion people living in China, it will be a big success.”
Belgian cooperative Belgische Fruitveiling (BFV) said it was the world’s biggest pear exporter to the Chinese market in the first quarter of 2017, having only began supplying China with Conference pears when market access was negotiated in 2010. “It was a new market with a new variety so it takes time to educate consumers,” commercial director Marc Evrard explains. “We’re on the right track now, but we’re not quite there yet.”
At present BFV supplies ten to 15 different retailers in more than 35 Chinese cities, but simply accessing the market was not easy to achieve. “We started negotiating access to China in 2007 and it took us three and a half years to have the barriers removed,” Evrard says. “Everything has to be worked out and procedures had to be agreed, so you need some dedication and commitment to get it done.”
One of the main retail channels for the company in China is online, with the country’s booming delivery market more advanced than that of the UK. The market is dominated by e-commerce giant Alibaba Group, which owns a string of online retailers, payment platforms and retail services. And Tmall, Alibaba’s B2C arm, announced at the start of August that it had invested $300 million (£230m) in Yiguo.com, a dedicated fresh food site.
“It’s difficult to forecast how the market is going to evolve but we see that online sales are developing at quite a fast pace in China,” says Evrard. “Companies like Alibaba have their own supermarkets where people can order fresh produce online and it can be delivered to their home in 35 minutes.”
When it comes to British firms looking to tap into the new Asian markets, Evrard questions the need for UK producers to export so far afield given the opportunities to boost domestic production instead – around 50 per cent of the UK’s fruit is imported. He does have some suggestions for companies looking to explore new opportunities, however. His main piece of advice: “invest a lot.”
Considerable investment is needed to negotiate market access, tailor and improve growing practices, develop logistics, and market your company’s produce, Evrard says. “It’s not just something that happens overnight and in the end it’s costly – not just from a money point of view but also in terms of the work and creativity you have to put in.”
As well as pears to China, BFV sends large volumes of apples to India – another potential market for British suppliers. Last season the company exported around 10,000 tonnes to the country, but warned that logistics had been challenging due to the poor quality of roads and a lack of cold store infrastructure.
“Logistics is definitely a challenge in India,” said the company’s Marc Evrard. “In China you have a centralised government and although there are different provinces, the different states in India have more autonomy. This makes the process more complicated.”
