In the last edition of ZON magazine FVO president Cees Veerman already indicated that the collaboration between the large producers organisations connects to five themes. Developing product market combinations together is one of these themes and exporting Dutch peppers to the Chinese market may be possible content for this. Eric Prinsen, temporarily working for ZON as an external consultant for commercial process improvement, is involved in the ‘China project’ with ZON. ‘You have to see that export of peppers is a way of helping the sector forward as a whole through collaboration and improve our international competitive position as the Netherlands. When a Dutch trade mission from China came back a few years ago with the news that the door for export to China had been opened a crack, it was an occasion for FVO to see whether this could be a concrete project for a collective approach. All those involved were positive about this, which led to the decision to actually start ‘export to China’,” according to Eric Prinsen.
This doesn’t mean that peppers have already been sent to the Chinese marker. Eric: “No, we’re not that far yet, in the first instance a number of growers from FVO participating sales organisations have been selected. A few weeks ago a Chinese delegation visited these growers and audited each company based on the demands and conditions in China. If the results of those audits are positive we can then work on a market test, in which we will mainly monitor how the Chinese customer responds to the Dutch product. On the short term, we expect to hear from the Chinese delegation when exactly we can carry out the market test and under which conditions. If everything goes well with that market test we expect to be able to send the first parties of peppers to China in 2017.”
Cards
Is China - especially considering the distance – an obvious market when talking about fresh product like peppers? “Within Europe the cards have mostly been dealt as far as the fresh flows go. The market we are talking about now, however, is completely open and due to the previously mentioned trade mission, at the moment the ‘pepper door’ is only open to the Netherlands. This offers huge possibilities if you look at the size of that market. China certainly can’t meet their own demand in the first years, as they have a lot of quality problems. Food safety is a serious problem in this and causes a huge internal pressure toward authorities to ensure a completely sage product. The fact that after their own milk powder scandal, Dutch milk powder is seen as trusted and sage, helps the potential demand for peppers. Especially if you can show that your tracking and tracing are well organised,” explains Eric Prinsen.
Looking at the transport costs in particular it seems likely that the target audience is mainly in the higher income classes? “Without a doubt, there is no argument. The middle class has grown considerably in recent years and are prepared to pay extra for fresh and safe food. The pepper is also a well-known and much used ingredient in the Chinese kitchen, so consumers already know the product.”
Planning
The FVO support group that Eric Prinsen is a part of, expected to be able to carry out the market test in June originally, but this turned out to be too optimistic. Eric: “According to the planning this will be July or August at the earliest. For the Chinese the test is only needed to research that our chain works well, but we want to immediately use the test to get interesting market information and it will take longer to prepare. Our product will be a lot more expensive than the regular supply in China, so you have to research whether consumers will see the difference in quality. If we can evaluate the results of the market test and all audits around mid-October, we can determine how we can enter the market if we’re allowed in in 2017.”
