By Claire Fitchett
Claire Fitchett, APAL’s former Market Development Manager, reports on her trip to attend a trade fair in China and a visit to see fruit importers and retailers in Vietnam to look for opportunities for Australian apples and pears.
China Fruit and Vegetable Fair
From 14-16 November 2014 I participated in the China Fruit and Vegetable Fair. This is an annual trade show in Beijing, organised by the Chinese Importer, Exporter and Quarantine Association. APAL has had a presence at this trade show for the past four years. It is strategically important for our industry to participate given our efforts to gain access for mainland apples into China. Participation in this show complements the other activities APAL is working on to facilitate faster access.
Whilst the show was well attended, it was smaller than in previous years. Australia Fresh had a strong presence with the summerfruit, table grape, avocado and cherry industries exhibiting alongside APAL. Citrus Australia and Fruit Growers Tasmania also had stands at the show. Companies and industry associations from New Zealand, South America and South East Asia were also present.
Visitors to the show included a mix of importers, wholesalers, retailers and research bodies. They were interested in learning about the varieties of apples that Australia grows and were keen to try samples of Pink Lady™ and Tiger Fuji (from Tasmania) apples as well as a range of pears from Victoria. We often hear that Asian consumers don’t like the tart taste of Pink Lady, yet most who tried it really enjoyed the balance of sweetness and acid. As tastes change, the acceptance of less traditional flavours is increasing. Of course, the flavour of Tasmanian Fuji was also very popular.
One thing I found really interesting is the level of interest in the branding of Tiger Fuji. The sticker on the apples generated a lot of conversation about the origin of the apples and I think it is a very clever branding technique! Buyers are always looking for the ‘next thing’ when it comes to fruit. Smart branding with an appealing label, coupled with a good quality apple, can help significantly.
The visitors asked lots of questions about our fruit production methods including whether Australian growers wax their apples. Food safety is a clearly a big concern for Chinese consumers. I asked one visitor why nobody would eat the skin of the apples and he explained that people in China believe the skin is tainted with unsafe chemicals and therefore not safe for eating. I explained that Australia meets very strict standards for fruit production and operates within international standards for chemical limits to reassure them that Australia can supply a safe product. Safety comes a long way ahead of price for the segment of Chinese consumers we will target. It will be important to determine whether Chinese retailers and importers are seeking waxless apples and to educate buyers that wax used in Australia is derived from natural products deemed safe for human consumption by Australian food safety experts using rigorous scientific assessments.
Shipment timing and access
Buyers wanted to know when the best season to import Australian apples would be. Not only is China the largest grower of apples in the world, they also import from several countries including New Zealand and the USA. The good news for Australian growers is that we don’t need to compete head-to-head with New Zealand and other southern hemisphere suppliers because there is enough demand for premium apples in the various sales channels – wholesale, retail, online – to gain our own market share. I anticipate our key supply window for sea freighted apples to China will be May-September, outside their own domestic supply window.
During the three day event I had the opportunity to talk with senior government officials about our access request for mainland apples. We are currently second in the queue for approval, after nectarines. I was assured that everything is being done to progress our request as quickly as possible. They also reiterated that this is a two-way process and that support for access for Chinese fruit to Australia is given due consideration (admittedly, Chinese apples have had access to Australia for a number of years). International trade is a two-way process and is not just about us getting access for Australian fruit into China. The entry of Chinese table grapes into Australia is currently under consideration by our government officials, awaiting further supporting pest data from Chinese authorities.
Meeting fruit importers in Vietnam
Following the trade show in China I went to Vietnam. This was a good opportunity to meet with importers in this developing market which imports significant volumes of Australian grapes, stonefruit, citrus and small volumes of pears. Disappointingly, the market closed to Australian suppliers from 1 January 2015 due to concerns over Mediterranean fruit fly.
My first stop was Hanoi to meet with Kleve Trading. This company has its own chain of fruit shops selling all imported fruit throughout Hanoi and imports a range of Australian fruit including stonefruit, cherries and citrus. They are also interested in purchasing Australian apples and pears this season if access issues can be resolved. Their stores are all located in and around the wealthy districts of Hanoi, servicing expats, embassy staff and wealthy locals. I was really impressed with this company – they are forward thinking and clever with their simple marketing techniques. When I visited they were selling gift hampers for ‘Teacher’s Day’. Premium fruit is a preferred gift for special occasions. This is the type of organisation Australian growers need to partner with as quality is a more important consideration than price.
Whilst in Hanoi I also visited some high-end supermarket outlets including the Korean-owned Lotte Supermarket. The fruit category was of high quality at the premium end, with a full range of imported produce available.
Ho Chi Minh City
In Ho Chi Minh City I met with a range of importers and retailers. Metro Cash & Carry is a German-owned discount supermarket chain with nineteen outlets across the country. Metro also operates in other South East Asian countries. Metro supplies fruit direct to customers and services the hotel/ restaurant/ catering sector. Their focus is big volumes and small margins. Apples were retailing from Chile (Gala at $3.40/kg), New Zealand (Gala at $4.00/ kg) and USA (Fuji at $4.60/kg and Ambrosia at $6.65/kg). Whilst some of these price points seem low, it was pleasing to see fruit at the more expensive end still selling well. It was interesting to learn about the impact of different stickers on Australian oranges on sale. The fresh produce manager of the store explained that customers are looking for a brand rather than a generic label, but that multiple labels in the same shipment creates confusion for buyers.
One importer I met, Dai Kim Phat, intends to open stores featuring all Australian produce. This would provide a fantastic opportunity for our industry to supply apple and pears on a regular basis. Specialist importers such as Classic Fine Foods are also keen to import niche items such as paradise pears to supply the restaurant and catering sector. An airfreight protocol is critical to allow Australia to send small but regular orders. Many exporters only want to bother with the ‘big’ orders, but there is definitely a space in the market for growers or exporters who are prepared to service the needs of smaller customers. Being able to send mixed shipments is also important while importers build their volume of imports.
Quality must be a key focus for our industry as we cannot compete on price alone. Growers who want to export should consider setting aside particular blocks in their orchard for export orders. Taking extra care during the growing season to ensure a high quality crop with good colour and size, as well as a commitment to meeting technical requirements (chemical residues etc) should be a focus.
It is critical that our Australian Department of Agriculture addresses our access to Vietnam as a matter of urgency. There is no shortage of demand for Australian produce in the market so regaining access needs to happen sooner rather than later.