What the rise of China means for food businesses

What the rise of China means for food businesses

With a population of over 1.3 billion, China has emerged as the world’s largest consumer market for food and beverage products, surpassing the U.S.[1]  By 2030, food consumption in China is predicted to be more than double current rates.[2]

For both Australia and New Zealand, this is an exciting opportunity. According to the Australian Trade and Investment Commission’s 2017 Benchmark Report[3] , “high demand from China for clean and green agricultural commodities drives Australia’s export trade in high value, braded premium products”.

The same can be said for New Zealand, which currently exports more goods to China than to any other country, and exported NZ$9,160 million worth of goods in 2016.[4]

Technology innovation plays a crucial role in enabling Antipodean food producers, suppliers and manufactures to meet China’s growing demand for high quality produce.

Examples include:

  1. Tech-tools to beat Chinese-produced “fakes”

According to Reuters, as China’s middle class develops its taste for imported food and drink, fresh produce suppliers in New Zealand and Australia are “topping up nature’s bounty with anti-counterfeiting technology in a bid to protect their growing business from fakes”.

“Suppliers of goods from fruit to wine and lamb are teaming up with makers of tracking systems, codes and powders to combat fakes that cost the global food business billions of dollars,” the article says.[5]

In New Zealand, for instance, Synlait Milk is using technology that measures food isotopes as a checkable ‘fingerprint’. Chinese mega-store Alibaba is also implementing a Blockchain-based tracking system and has signed up Kiwi dairy giant, Fonterra and Australian vitamin supplier, Blackmores as partners.

  1. Embracing e-Commerce

Australian producers also need to step up their eCommerce facilities to enable Chinese consumers and businesses to buy online more effectively.

While Chinese customs regulations recently cast a shadow on imports, there is still a booming online trend with Chinese customers buying vitamins and baby formula from Australia, according to a recent article by the Sydney Morning Herald.[6]

“Blackmores and Bellamy’s are just two of the household Australian brands that saw their sales soar after finding popularity with Chinese consumers through online sales channels. Another Australian brand, Swisse, was purchased by a Chinese company on the back of its e-commerce success in China,” it says.

  1. IoT along the supply chain

To provide Chinese consumers with the information they need, IoT innovation is becoming more and more essential. Local producers and manufacturers need to collect information every step of the way – and make this available directly to customers around the clock. For instance, by installing cloud-connected cameras in a storage warehouse, a local business in Australia or New Zealand can automatically update a Chinese customer regarding the status of an item – e.g. when it arrived from the farm, or when it will be shipped.

Want to learn more?

To find out more about how the rise of China could impact your food business, download our food infographic.

[1] Euromonitor via Austrade: Food and Beverage to China: trends and opportunities, accessed 8 May 2017

[2] DuPont, China good demand could double: report, accessed 8 May 2017

[3] Australian Trade and Investment commission: 2017 Benchmark Report

[4] New Zealand Trade and Enterprise: Investment Statistics

[5] Reuters, Charlotte Greenfield and Aaron Bunch: Food fight: To beat China fakes, New Zealand and Australian produce firms raid tech larder, accessed 10 May 2017, <http://www.reuters.com/article/us-newzealand-australia-china-counterfei-idUSKBN17B10F>

[6] SMH, Kirsty Needham, China wants to expand eCommerce trade with Australia, accessed 10 May 2017, <http://www.smh.com.au/business/retail/china-wants-to-expand-ecommerce-trade-with-australia-20170321-gv2xed.html>

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