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Fresh cherries the first import under China-Australia FTA

A consignment of 1.2 tons of fresh cherries from Australia formed the first import into China under the China-Australia free trade agreement (FTA), signed last June and coming into effect on December 20, 2015.

The first import consignment under the China-Australia free trade agreement (FTA), signed last June, was granted entry into China on December 21, reports China’s customs agency GACC.

“Shanghai Customs District, by using a green clearance channel, fast released 1.2 tons of fresh cherries from Australia on declaration by Shanghai Esen Agro Products Company.

“It can be expected that Australian share will grow a lot at even more competitive prices on Shanghai fruit market,” said Huang Xianhua, general manager of Shanghai Ouheng Import & Export Co., Ltd. The GACC said the duty reduction thanks to the FTA will aid the expansion in the Chinese market of Australian fruit, given it is “reportedly…higher in quality but more pricey due to higher labour costs.”

According to Shanghai Customs’ statistics, over January–November 2015, 586,000 tons of fruit, worth US$ 880 million, were imported into Shanghai under preferential trade agreements, making for a 21.7% increase in volume and 37.2% in value year-on-year. A total of 10 countries/regions of origin benefited from China’s duty preferences.

With the coming into force of the China-Australia FTA on December 20, “Chinese consumers can enjoy cheaper Australian commodities like beef, mutton, dairy products, wine, lobsters, and fruits,” the GACC said.

“For Chinese exporters, zero-duty HS Codes and trade volume offered by Australia will finally achieve 100%, duty reduction transition to end in 5 years. Thus both Chinese products and exporters can get a lot of opportunities to broaden overseas market.”

source: First Import under China-Australia FTA Clears Customs

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Carrefour opens 4th distribution centre in China

December 2, 2015, the grand opening ceremony of Carrefour supply chain in China-North-West China distribution center is held in Wuqing Economic Development Area, Tianjin municipality

Carrefour has consolidated its supply chain in China with the December 2 grand opening of its North-West China distribution centre in the Tianjin municipality.

The centre is intended to be a bridge for Carrefour China’s supply chain in northern China, radiating out to the Beijing-Tianjin-Hebei integration economic cycle and Shandong, Shanxi and other provinces’ logistics and distribution network. It is also designed to increase distribution efficiency, support the business of stores, and boost regional economics.

Located in ProLogis modern international distribution park, Wuqing economic development area, in the Tianjin municipality, Carrefour’s northern distribution centre covers 39,000 m2.

It will use the Voice Picking System, achieving 99.997% in its picking accuracy rate. The trays utilise 100cm*120 standard operating procedure to reduce packaging and labour costs and improve efficiency; moreover, the centre is equipped with professional temperature controlled room which sustain temperatures of 18-22 degrees for the storage of alcohol, chocolate and milk powder.

The northern China distribution centre will cover more than 30 stores in northern China, greatly improving the company’s northern China supply chain system to provide more high-quality, convenient products and services for numbers of consumers, Carrefour said in a press release.

After the establishment of the distribution centre in Eastern, western and northern region, it plans to set up 2 new distribution centres in North-East Territory and South Territory of China.

By the end of 2016, Carrefour estimates it will have completed the establishment of 6 modern distribution centres in China, covering more than 200 hypermarkets in China to fully support its emerging businesses such as its e-commerce operations and “easy Carrefour” convenience stores.

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New partnership between ports of Antwerp and Guangzhou

The Port of Antwerp said the twinning agreement also dovetails perfectly with the ‘One Belt One Road’ philosophy announced by China in 2013 which aims to improve connections between the main Chinese industrial cities and trade centres elsewhere in Asia, the Middle East and Europe.

Antwerp, the second-largest port in Europe, and Guangzhou, number 8 in the world, are to collaborate more closely under a twinning agreement signed on December 10 in the Chinese port city.

The two cities had already had a close relationship as under an agreement signed in 2010 between Guangzhou and the Port of Antwerp training centre APEC, various groups of shipping professionals from the Guangzhou port  have attended tailor-made courses at APEC. The twinning agreement will take the relationship between the ports to a new level and, among other things, include commercial collaboration.

For instance, there are currently two shipping services between North-West Europe and China calling at Guangzhou and Antwerp. “By developing a joint marketing approach the respective port authorities aim to get both ports included in several more loops,” the Port of Antwerp said in a press release.

Also, in collaboration with APEC and three other partners, a joint training institute under the name of Guangzhou-Antwerp Port Training & Consultancy Co. Ltd will be set up to offer courses in port operations for professionals from Asia, Africa and Latin America.

Other action points in the twinning agreement include the exchange of information on port development and best practices for sustainable enterprise in a port environment.

The Port of Antwerp said the twinning agreement also dovetails perfectly with the ‘One Belt One Road’ philosophy announced by China in 2013 which aims to improve connections between the main Chinese industrial cities and trade centres elsewhere in Asia, the Middle East and Europe.

It also said there are strong similarities between the ports of Antwerp and Guangzhou, both of which are located quite a long distance inland and multifunctional ports with excellent trimodal connections with a rich hinterland.

With an annual freight volume of 510 million tons including 16.63 million TEU, Guangzhou is one of the main container ports in China, acting mainly for transshipment of fuel stuffs, raw materials and commercial goods.

Image of Guangzhou skyline by jo.sau (Flickr) [CC BY 2.0 (], via Wikimedia Commons

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US exhibitors report $6.8 million in projected sales from Asia Fruit Logistica

13 U.S. exhibitors reported over $1 million in onsite sales and $6.8 million in projected sales following a successful Asia Fruit Logistica 2015 in Hong Kong.

Over $1 million in onsite sales and $6.8 million in projected sales have been reported by the 13 US exhibitors at this year’s Asia Fruit Logistica, held September 2-4 in Hong Kong.

The USDA said the event, a USDA-endorsed show, is Hong Kong’s largest specialised trade show for agricultural produce. “This year, more than 570 companies from 40 countries/regions exhibited products to over 9,200 Hong Kong based and regional buyers.”

Among the support provided to leverage US exhibitors’ market opportunities, the US Agricultural Trade Office (ATO) Hong Kong organised a market tour, provided a market briefing and hosted a trade reception for more than 80 invitees . “As a result, U.S. exhibitors secured excellent export opportunities, achieving on-site sales of over US$1 million and projected sales in the next 12 months of over US$6.8 million,” the USDA has reported.

In 2014, the US was the largest supplier of fruit, vegetable and tree nut products to Hong Kong, with exports valued over $485 million, $30 million and $889 million, respectively. Hong Kong also serves as a gateway for the flow of products to regional markets with strong logistical access to Asian-based buyers and markets, it said.

Image of Hong Kong night skyline by Base64, retouched by CarolSpears (Own work) [CC BY-SA 3.0 (], via Wikimedia Commons

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Production up for China, the world’s top apple, pear & table grape grower

China is the world’s leading producer of apples, pears, and table grapes, and in MY 2015/16 expects apple production at 43 million tons, up 5% on the previous year, pear production up 6% to 19 million tons, and grape production up 9% to to 9.6 million tons.

China is the world’s leading producer of apples, pears, and table grapes, comprising roughly 55%, 77%, and 44% of total output respectively, and is expecting increased crops for each of these fruits in MY 2015/16, according to a recent USDA Gain report on fresh deciduous fruit in the country.

Chinese Fruit Production 2004-2014

source: Ministry of Agriculture


China’s apple production: The USDA post forecasts China’s apple production at 43 million tons in marketing year (MY) 2015/16 (July-June), up 5% from the revised production in MY 2014/15 underpinned by generally favourable weather. In the last decade, apple production has steadily increased but this growth is likely to moderate as less new acreage becomes available for apple production.

China’s apple imports: In May this year, the US and Chinese governments granted market access for each other’s apples, a move expected to boost apple imports from the United States. China’s apple imports are forecast to continue surging by nearly 50% to 100,000 tons in MY 2015/16 (July-June) after China granted market access for all varieties of the U.S.-origin apples.
In October 2014, China lifted an import suspension on Washington apples due to quarantine pest issues, as a result, the country’s apple imports nearly doubled in MY 2014/15. The US is China’s second largest apple supplier after Chile.

China’s apple exports: Increasing prices had been limiting China’s apple exports but in MY 2015/16, China’s apple exports are expected to rebound by 20% to 900,000 tons thanks to apples that are lower-priced and in greater supply. In MY 2014/15, exports had dropped by nearly 20% to 750,000 tons as domestic apple prices reached a record high and the buying power of what had been two main customers for Chinese apples, Russia and Indonesia, was limited by economic difficulties and local currency devaluations

Apple prices in China: Farm gate prices for Fuji apples have dropped by 25% to RMB 6.4 ($1.00) per kilo in Qixia of Shandong, a major apple producing area in China, compared with MY 2014/15. The high purchase prices during the MY 2014/15 harvest time effectively limited consumption and, as a result, fruit sales were reduced and prices began to decline in March 2015. In general, fruit prices were much lower in 2015 than the previous year due to the economic slowdown.


China’s pear production: Pear production is expected to increase by 6% to 19 million tons in MY 2015/16, up nearly 6% from the previous year because of favourable growing conditions in major production areas.

China’s pear imports:  China’s pear imports are forecast to increase by more than 20% to 12,000 tons in MY 2015/16. Pear imports are steadily increasing as consumers become more aware and acceptant of Western pears that are different from their Asian counterparts. Since gaining market access in 2013, the US has become China’s top pear supplier.

China’s pear exports: Thanks to increased supplies, China’s pear exports are tipped to rise 9% to 360,000 tons in MY 2015/16. The report said that while China’s export share to Indonesia, the leading buyer of Chinese pears, is declining, its other major markets in Asia remain quite stable and China is exploring new foreign markets.

Table grapes

Chinese table grape production: The forecast from the USDA’s post in China is for Chinese table grape production of 9.6 million tons in MY 2015/16 (June-May), up 9% on the year before thanks mainly to increased acreage. Grape acreage is expected to expand 5% to 800,000 ha in MY 2015/16.

China’s table grape imports: The post estimates 10% growth in China’s grape imports to 250,000 tons for MY 2015/16, due largely to increased imports during the local off-season. Chile is China’s top grape supplier and Peru has overtaken the US in the number two spot. China’s grape imports from Peru are likely to increase further as, under a Free Trade Agreement, the import tariff for Peruvian grapes will fall to zero this year.

China’s table grape exports: A 27% increase to 165,000 tons is the forecast China’s table grape exports in MY 2015/16. Grape exports to China’s neighbours in Asia are likely to enjoy a boost thanks to the drop in prices in China. In the wake of rapid production expansion, prices for most grape varieties have fallen considerably since MY 2014/15. For example, farm gate prices for Red Globe varieties in Shaanxi province were quoted at RMB 4.8 ($0.76) per kilo during the harvest, down 20% on the same period the previous year.

Chinese fruit consumption

Per capita daily fruit consumption in China is said to be 198 grams, compared to 303 grams in the US and 426 grams in Italy, suggesting there is room for much growth. However, such growth has been slowed in China by the current economic restructuring and much slower GDP growth there.
On the positive side, however, fruit prices have fallen since last year and consumption of imported fruit continues to rise at a fairly fast rate in large cities, “aided by the development of E-commerce which targets mainly the consumers with higher disposable income and young professionals. Shanghai, for example, imports between RMB 15 to 18 billion ($23.6 to 28.3 million) of fresh fruit each year, an annual increase of nearly 40%, according to customs data.”
Overall, the report says, China’s fruit consumption will continue to increase, aided by dietary changes.

Focus now on boosting quality, not production

Instead of focusing on the expansion of production, quality improvement is increasingly the aim of support for the fruit sector provided by the government, normally at provincial or county levels, the report says.
Demonstration farms are seen by the local agriculture departments as an effective way to showcase new production models and farming technology. In Shaanxi, for example, the provincial government is providing an annual subsidy of RMB 10 million ($1.6 million) to build high-density apple demonstration farms which will serve as the model for upgrading the existing apple orchards in the province.

source: GAIN Report Number CH15059, 2015 Fresh Deciduous Fruit Annual for China (People’s Republic of)

main image: “The People’s Republic of China (green) and its claimed territory (lighter green)” by Ssolbergj licensed under GFDL via Commons


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Success in China for Aussie grape growers

Growers in the Australian Table Grape Association have nearly tripled their exports to China since 2014, with the volume rising from 7,000 tons to 20,000 tons.

Growers in the Australian Table Grape Association have nearly tripled their exports to China since 2014, with the volume rising from 7,000 tons to 20,000 tons.

The association, which represents grape producers across Australia, reports that of total production of 160,000 tons, 90,000 are exported. The main markets are Hong Kong, Malaysia, Indonesia, the Philippines, Singapore, Vietnam and other Asian countries.

“We also export our fruit to Japan and Korea; these markets have been expanding,” said Jeff Scott, the association’s CEO.

Talking about the growers’ success in selling grapes to China, Scott said the association has been participating in China FVF since its launch six years ago. “And three years ago our countries signed a relevant protocol, and we started to ship grapes to China. Now that country is the most rewarding market in terms of volume, because Chinese consumers like the taste and appearance of our grapes, and sales keeps growing, although the price is higher than for their domestic grapes.”

Australian Table Grape Association

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Brands helping growth at Walmart China

Walmart China has launched the “100% Freshness guaranteed” campaign and is planning to open 100 more shops by 2016.

Walmart is so far the only international retail chain operating in China with its own nationwide logistics centre for perishables. “All the fruit and vegetable distribution today is centralised from our 11 platforms,” said Vincent Yeh, head of perishables procurement at Walmart China.

The depots are located at Shenzhen, Guangzhou, Shanghai, Beijing, Wuhan, Chengdu, Kunming, Xiamen, Shengyang, Taiyuan and Hangzhou. Walmart China is today busy building an international supply chain to directly source most of its imported fruit.

So far in the first semester, about 20% of the imported fruit sold in the shops has been directly sourced by the Walmart department. This represents about 200 containers of overseas fruit (like apples, citrus, pears, grapes, cherries and blueberries) and 1,000 units of tropical fruit from South East Asia (mainly bananas, dragon fruit, durians and pineapples). Imported fruit today represents 45-50% of all the fruit sold by the shops. “We believe we can still have larger sales of imported fruit, since it is helping us to differentiate us as an international chain,” Yeh said.

Citrus and durian the most popular in 2015

Citrus is the largest imported category, taking up about 40% of the directly sourced volumes, followed by apples (25%) and pears (5%). Citrus procurement at Walmart has more than doubled since October 2014, when the US was again given access to Chinese markets. Durians became the fastest growing item in 2015 (all sourced from Thailand). “It is increasingly popular this year due to its health benefits: it is considered a warm or energetic fruit, recommended for women and babies,” Yeh said.

Due to the same health trends, lemons were the fastest growing imported fruit in 2014. It is very popular for its antioxidant properties and benefits for the skin. Avocados and blueberries keep increasing in popularity too, for similar health reasons. Spain has appeared on the market with lemons and oranges, able to supply over a long period, though South Africa is the top source for citrus, between May and September, followed by Egypt, Spain (with late oranges between February and June) and Australia (between May and September).

Produce brands helping to sell

“In future we hope to sell more branded items, even well-known European brands. This is our next step towards quality,” Yeh said.

So far among the most famous brands sold there is Dole, Zespri and Sunkist. “Last year we started with Pink Lady, Blue Whale and Oscar; Truval is also one of our growing brands.” Fuji apples remain by far the best-selling variety in China , representing 90% of the volumes. The remaining 10% are Galas and Red Delicious. Imported varieties represent 30% of the total sales of apples at Walmart, mainly with Gala, Red Delicious and a few varieties from New Zealand (Rose and Queen). The main sources are Chile, New Zealand, the US and France. Stone fruit and grapes are also a future growth category according to Vincent. So far, cherries represent more than 90% of the stone fruit imported, with plums second with just 5%. The potential demand is there for other products like apricots, peaches, nectarines and flat fruit.


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Asia: Still much greater things to come

Asia will be the standout growth opportunity for the global fresh produce trade in the next decade, and its ever-increasing demand is set to have a much greater influence on world suppliers and markets.

Asia’s impressive rise as a fresh fruit importer has been impressive over the last two decades, as highlighted at the latest Asiafruit Congress.

Asia will be the standout growth opportunity for the global fresh produce trade in the next decade, and its ever-increasing demand is set to have a much greater influence on world suppliers and markets.

That was one of the key messages left ringing in the ears of delegates to the last Asiafruit Congress in Hong Kong, which attracted close to 350 industry decision makers from 34 different countries, celebrating its 20th Anniversary.

Panelist John Piper, founder of Hong Kong-based Food Asia Marketing, agreed, suggesting the fruit trade would continue to grow despite recent concerns about an economic slowdown in Asia. “Despite previous global economic dips, Asia has seemed to sail through,” he said. “In Asia, fruit imports are a luxury, but they’re a little luxury that people can afford and will continue to pay for.”

Nick Kukulan, president of Paramount Export Co, was also upbeat, noting that appreciation of fruit and vegetables in Asia, particularly for their taste and aesthetic qualities, was “unmatched” in any other part of the world. “Asian consumers have been a driving force for development of varieties in the US, whether it be with white-flesh peaches or grapes; it’s an incredible place to do business if you follow what consumers want in terms of taste and texture.”

More stimuli for growth, despite recent financial “correction”

Geoff Green, head of Capespan Global Procurement, shared his first-hand insights into the impact on the global supply base, particularly for Southern Hemisphere suppliers who have been shipping much more of their produce to Asia to meet counter-seasonal demand.

“Asia seems to be the only thing on growers’ minds now, whether it’s in Peru, Chile, South Africa or India,” said Green. “With everything being planted, the only thing on the growers’ minds is the Asian markets. They’re no longer planting varieties as they did before for Europe and the UK.”

While acknowledging that China’s economy was undergoing “a long overdue correction”, Piper urged everyone to keep ‘the bigger picture’ in sight. Looking to the next ten years, he said the challenge would not be to grow the market for fresh produce imports in Asia, but rather to keep pace with demand.

Marketing health: a ‘capitalist’ opportunity

Clint Smith of The Silk Initiative and Zhongxing Zhang of McCann Health explained how marketing the health and nutritional benefits of fresh produce in Asia could deliver sales growth.

Smith said Chinese consumers are very conscious about the heating and cooling properties of foods as well as their natural medicinal properties. “It’s about keeping a balance between heating and cooling properties,” he explained. “There’s also much work to be done to educate consumers on less familiar fruit and vegetables.” “Most of us know avocados are very nutritious but when they first came to China, people didn’t like them,” said Smith.

Zhang followed on from Smith’s advice, urging delegates not to be so modest when it comes to promoting the health benefits of fruit. “Let consumers see the link between fruit and its health benefits,” Zhang said. “Communication needs to be changed; nobody has told consumers the health aspects of each specific fruit.”

China’s banana market: opportunities in Southeast Asia

Goodfarmer’s Liu Zijie painted a picture of the opportunity to develop China’s banana market with perspectives for domestic production. Vanessa Perez of Austrade Philippines and Edgar Fernandez from the Philippines retailer Rustan Supercenters outlined the market opportunities in this rapidly emerging South East Asian economy. James Christie of US-based market development agency Bryant Christie also led a breakout session on the changing landscape in terms of maximum residue levels across Asian countries, with expert insights from colleague Matt Lantz and from John Chapple of Hunter Food and Agriculture Services.

China & Taiwan: huge markets for NZ cherries

Taiwan and China are the main two markets for NZ Cherry Corp with approximately 60% of its volume going to these two markets. Chinese customers seek big, red, firm and juicy cherries, it reports. “We believe we have the best quality from NZ and are in a good position to provide the size, quality and packing the customers need. We harvested 510 tons this year and we expect a better season for the coming year, thanks to an increasing number of growers in our company. We are currently working on some projects to increase our production quantity.”

Asia: a growing opportunity for Indian produce too

Asia is also giving growing market opportunities for Indian produce. One of its top 7 exporters, Seven Stars Fruit, confirms they are already exporting to Hong Kong, Malaysia, Singapore and the ME market too, though their main export market is Europe, especially the UK and Germany. “This is our 2nd time at AFL. We are here to find new opportunities for grapes, pomegranates and onions in South East Asia. This year, we have also started a banana plantation of 35 ha to get year-round production and we expect the first harvest in April 2016,” say their managers.

Seven Stars Fruit is a major exporter of Indian fruit, especially pomegranates, table grapes, mangoes and bananas, and they are looking for opportunities in onions and potatoes in the Far East and Russian. Last year, Seven Stars Fruit exported table grapes from a total production area of 1,200 ha, and pomegranates from an area of 200 ha. Seven Stars works closely with growers and has developed the web app “Farm View” for growers, the production team and their customers, which will help to monitor production on the farms, packing operations and traceability for their customers. This will ensure monitoring of pesticide residues and food safety, which are major concerns for the EU market.


This interview first appeared on p38-39 of edition 139 (Sept/Oct 2015) of Eurofresh Distribution magazine. Read more of that issue online by clicking on the image of it here:


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China’s banana consumption doubles over a decade to 9.5kg per capita

China’s per capita consumption doubles over a decade from 5 to 9.5kg, and imports quadruple to 1.5 billion tons.

China is the third largest banana-producing country in the world after India and Brazil, but ahead of Ecuador, the largest banana-exporting country. The banana is a major cash plant in southern China and has earned a good reputation among consumers, fostering employment for over 2 million people. Over the last 10 years in the southern equatorial Chinese areas, mainly in Guangdong and Hainan provinces, 12 million tons of fresh bananas have been produced on an area of 413,000 hectares now, up from 295,000 ha in 2006. In the same period, the yield per ha has increased by almost 20% to 29 tons/ha. It is said that China has now reached its maximum production capacity. The land suitable for banana planting is exhausted, while some areas are susceptible to tropical storms and even typhoons and flooding. Also, China’s domestic banana production capacity is unlikely to expand significantly due to constraints on transportation, labour and environmental costs. Over the last decade, the banana industry has feared the outbreak of a banana plant virus on the continent called Panama Tropical Race 4 disease, which could spread quickly in the main commercial production areas of the Cavendish banana. Today, the Chinese population of 1.4 billion consumers is getting richer and needs more fresh fruit as they recognize its health benefits. The consumption of all fruit is increasing, including bananas. Chinese consumption of bananas is catching up with the rest of the world, last year reaching 9.5 kg per capita and per year, compared to the U.S. with 13 kg and the EU with 11 kg. Domestic production meets the vast majority of China’s demand, with only 5-8% satisfied by imports. In the second half of 2014, the El Niño effect appeared in force, bringing drought to the Western Pacific region. Banana production on technified banana farms in South China and neighboring countries like the Philippines saw reduced yields.

High costs with domestic supplies

Local produce is fighting for its market share against imports as it faces higher costs of transporting bananas from some major production areas to the north-eastern cities. Banana imports increased substantially in 2014, even in the southern city of Shanghai. During the first seven months of 2015, imports rose by 30% and reached 715,000 tons, of which 200,000 tons were Ecuadorian bananas. At the same pace, China will import 1.46 million tons this year, almost three times the amount in 2013, taking a 12% market share. Dalian is the main banana port in north-eastern China, where the major banana companies have their logistical hubs. Dole Philippines leads with the largest market share. The Sumitomo group from Japan ranks second and has its own large-scale banana plantation in the Philippines with the banana brand ‘Gracio’. It takes 30-40 days to ship bananas to China from Ecuador, but the Ecuadorian banana’s competitive pricing versus Philippine bananas has led many importers to make the switch.

Stronger demand ahead for Ecuadorian bananas

The demand for Ecuadorean bananas is rising and it may continue to grow strongly in the years ahead. Indeed, the major shipping lines have made extra reefer space available. CMA-CGM is now offering a new service provid- „Peru, world’s second largest organic banana exporter Peruvian banana exports amounted to US $120 million in 2014, representing an increase of 35% on the previous year and a 53% share of total Peruvian organic exports, reports PromPeru. The country is now positioned as the second largest exporter of organic bananas worldwide. The main destination markets were the Netherlands with 42%, the USA with 27% and Germany with 16%, followed by Belgium, Japan, Finland, South Korea, the UK, Canada and Chile. In the first half of 2015, shipments of this product amounted to US $ 73 million, in other words 28% more compared to the same period in 2014. ing faster and more direct access to the Chinese market, with controlled atmosphere reefer containers guaranteeing fresh quality on arrival. The ship arrives in Guayaquil from China carrying electronics, toys, raw materials, and general consumer goods. It leaves Ecuador bound for Mexico, then South Korea and China, carrying a shipment of Ecuadorean bananas. However, banana growers in several neighboring countries in south-eastern Asia (such as Vietnam, Indonesia, Laos, Myanmar and Cambodia) also seek an outlet and are looking to enter China. Demand for higher quality imports will get stronger, particularly in the big cities. Chinese producers have been warned: an upgrade to their cold chain management system is mandatory. 


This article originally appeared on page 74 of edition 139 of Eurofresh Distribution magazine. Read that issue online here.

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Pagoda: China’s ‘boutique’ fruit pioneer

Pagoda Orchard Industry Development Co. has achieved phenomenal growth in a few years, becoming a veritable icon in China for specialist fresh fruit retail chains.

Retail shops specialising in fresh fruit are a rapidly expanding sector in the Chinese retail market, and Pagoda Orchard Industry Development has been the pioneer and role model in this sector. That is why the Award for Produce Retailer of the Year in the Asian Fruit Award 2015 at Asia Fruit Logistica went to the company. It has achieved phenomenal growth in a few years, becoming a veritable icon in China for specialist fresh fruit retail chains.

“Receiving this award is an honour for Pagoda,” said Huiyong Yu, the president of Pagoda Orchard Industry Development Co. “With this prize, we have shown that the business model for fruit shops is not only well regarded in China, but also in the global industry.” Having opened its first shop in 2002, Pagoda has grown at an incredible rate. Recently it opened its shop number 1,200 in China, reaching a turnover of $4 billion.

Pagoda’s model is based on being a ‘boutique’ fruit retailer, aiming to select the best product for its customers. It sells only high-end produce, whether imported or domestic. This is why the company puts a lot of effort into maintaining a close relationship with suppliers, so as to always be able to rely on direct import sources. Contrary to the trend with other retail chains, Pagoda’s own brand is always in the premium segment with the highest fruit quality at affordable prices.

Another of Pagoda’s distinctive aspects is its work on the shop floor and relationship with end consumers. “We have worked hard with great success in educating consumers and introducing a wider range of products. Before, Chinese consumers only looked at the price; now, we have managed to teach them that a higher quality diet is closely linked to a healthier lifestyle,” Yu said.

Screenshot 2015-09-24 at 10.31.02 AM.png

Thanks to strong management and intensive staff training programmes, Pagoda has succeeded in generating customer service of the highest quality. In its shops, which measure just 50m2, customers are treated in a very friendly way: the shop assistants identify the regular customers and call them by their name. There is a lot of trust and customers can return the fruit if it is not to their liking, even without a receipt. Pagoda’s shop assistants are also experts in fruit: they know where every product comes from and its added value.

Profile of Pagoda:
Pagoda is the pioneer in retail fruit shop chains and the first of its kind in China to operate with specialist fruit stores. Its headquarters are located in Shenzhen, using the Greater Pearl River Delta region as the hub from which to expand the company to different cities within mainland China.
At the moment, it has over 300 outlets and is still opening at a rate of 10-20 outlets per month. Pagoda has become one the biggest owners of agricultural bases in China and its vision is to become the worldwide number one brand in fruit shop chains.

Pagoda’s promise: To deliver the most delicious fruit, with a guaranteed refund if not satisfied.
Pagoda’s philosophy: To only do one thing in one’s life, and in our life we choose fruit.

Past, present and future
2002: First Pagoda outlet opened in China.
2007: Company approaches fast growth, reaching 100 outlets.
2010: Prefect management and profit system, reaching 200 outlets.
2012: 10 year anniversary, reaching 300 outlets.
2015: Total standardisation attained, reaching 1,000 outlets.
2020: All types of freshness problems overcome, reaching 5,000 outlets.
2030: Becomes no.1 and expands internationally, reaching 10,000 outlets.