Demand for premium and safe fresh fruit has been growing significantly in China. The domestic fruit industry is facing a number of challenges, including poor quality and insufficient quality control, that stimulate the import of fruits. Last week, the Pagoda Group, one of China's largest fruit chain-stores, organised a meeting to discuss developments in the fruit industry. The meeting was jointly led by the China Agricultural Products Development and Service Association and the Pagoda Group, and was attended by industry associations, industrial experts, traders, scholars and investment managers.
The meeting was organised to celebrate the launch of the China Premium Fruit Industry Association. The Association is a non-profit organisation which will try to solve specific issues of the Chinese market, including pesticide control, quality of soil, increase in import fruits, poor branding and volatile pricing.
Key take-away of the meeting is that quality and quality control is an integral part of the fresh produce industry, and could become a key source of income for farmers. Consumers demand quality produce that is safe. A number of challenges, including overproduction and oversupply, have destabilised the industry. Apples, for example, are currently facing difficult sales because of oversupply. Apple growers have estimated that this season, 40% of the apple crop will go to waste.
A solution to this problem could be to branch out into the cultivation of different fruit varieties in different regions, strengthened by different brand names, which will enter the market spread out over a longer period.
Building new brands
During the meeting, Mr Yu Huiyong, the chairman of the Pagoda Group, gave a keynote speech. According to Mr Huiyong, developing new and different brands is the only way to enhance the value of the fruit chain and to revitalise the domestic fruit industry. These brands should represent stable quality, stable supply and targeted marketing. In order to grow premium fruit, the industry also has to implement advanced cultivation technologies and keep on investing in improving the business.
Participants discussed the set up of industry standards, integration of resources and joined investments into branding and marketing efforts. The industry is increasingly capable of attracting outside investments, which should be used to modernise cultivation and to establish new and different sales channels.
Integration of capacities and resources and developing strong brands should strengthen the industry and its suppliers. Moreover, Mr. Yong said that the China Premium Fruit Industry Association, should work to grow consumption of fresh fruits. The Association is a nonprofit organization. Its core competences will lie in the ability to integrate resources and cultivate quality brands. Its reach can cover 1.3 million hectares of fruit cultivation bases, which serve both the domestic and international market. There is potential to launch over 100 new brands, with estimated annual sales reaching 50 billion Yuan.
