“The current banana supply in China isn’t up to the quality standards that Chinese consumers demand. Therefore our bananas from Ecuador will satisfy market needs . Along with our produce, we can also provide cool chain logistics and a maturation system know-how for our Chinese network,” says Holger Brandt, international business development director at SanLucar.
“We started out with some companies for trials. We first wanted to see if we could achieve the right quality. For this, we hooked up with Chinese retailers. This is our first year in which we are exporting bananas to China. We provide a small volume, that’s mainly focused on the Chinese market.”
Entering a new market comes with its fair share of challenges. “We used to send bananas with large sizes to Europe, as they were in demand over there. But Chinese consumers like their fruit to be small. You really have to understand the demands of a particular market to be successful”, explains Holger Brandt.
Though there have been reports of the Chinese economy slowing down, Holger doesn’t consider these to be of any risk. “In Europe, there was always some economical crisis going on. But it really all depends on the product itself. If a product is good, there will always be a demand for it. Also, China is a huge country. The economical situation of the northern regions is vastly different from the one in the southern provinces. Economically-wise, the coast part of China seems to be doing well.”
While SanLucar is also developing markets in regions like Singapore, Malaysia and the Middle East, the main focus right now is put on China.
As a brand, SanLucar is well aware of its responsibility towards consumers. The company is very careful when considering everything that’s involved with entering new markets, like applying a delivery chain, packing, quality control, etc.
According to Holger, every market and country has it’s own conditions. “We export mainly to Austria and Germany, where the discounts stores have a very competitive position. So for German consumers, pricing is an important factor. My perception is that in China as in Germany, consumers don’t mind paying for quality. It doesn’t matter if it’s more expensive, but this also results in a very high quality standard. Also, the Chinese sector is more driven by wholesale markets, which isn’t the case in Europe anymore.”
China has one of the biggest online retail industries of the world. In order to tap into this market, SanLucar is striking up business deals with online retail channels. Another important aspect for the company to consider is changing consumer behavior. Holger said that the habits of younger consumers are changing. The next generation is more knowledgeable about what they’re buying. They want healthy products. However, as China is so large, you will notice also differences in culture throughout different parts of the country.
SanLucar has the means to adapt. “We’ve got good relationships with breeders from all over the world for every product we offer. Our producers in South Africa grow different varieties of grapes and citrus. We can choose between different programs. When we come to understand the specific demands of China, we’ll be able to provide the best products according to Chinese consumers preferences.”
More and more foreign companies are finding their ways to the Chinese market, as more countries are signing trade agreements with the Chinese government. This means that consumers in China have more and more choice, though according to Holger, most Chinese seem to prefer fruit with crunchy and sweet characteristics.
“We export stonefruit, which is supplied from the Southern Hemisphere, citrus, cherries, grapes and bananas. We try to offer something that differentiates us on the market. Currently, everyone seems to want to enter the Asian markets, but it’s difficult. In order to do so, you need to establish a value chain and get involved with the right local partners. I personally think that personal business relations are a key factor in this.”
Another important part of successfully building up a presence in an new market is education. By engaging with customers in stores, SanLucar shares knowledge and experience about the product the company is offering “We’re working with retailers to provide Chinese consumers with information. We’ve done something similar in the European market, which proved to be very successful,” concludes Holger Brandt.
