From early on, Mr. Li engaged in raspberry agriculture administration and berry market merchandising. With his years of experience and understanding, he believes that berry production is the territory for China produced fruits. The market potential is huge. That is why Freshplaza interviewed the creator of the 'Nice Berry' brand, Mr. Li Zhen:
Can you briefly explain 'Nice Berry'?
"Nice Berry is devoted to becoming the leading berry supplier in China. With raspberries and blackberries as our main products, we provide a one-stop service all the way from the farmer to the customer. Moreover, Nice Berry has the capability to develop the whole supply chain for berries. Not only does Nice Berry work toward cultivating the best fresh berries in the world, but it also aims at the development of further processing of the berries."
"Concerning the production, Nice Berry is still active in the market. It is a platform where information is exchanged and marketing resources are integrated. Though we cultivate ourselves, we also import and sell the products of foreign berry enterprises. We also sell Chinese agricultural products both abroad and in China. The Chinese and the international berry markets really converge at Nice Berry. As such, Nice Berry is poised to make a move on the Chinese market at the opportune moment."
What is the current situation on the berry market? What potential is there?
"In the 70s, raspberries started to come to China. After a period of research and promotion, the cultivation techniques and production volumes were already comparable to those of foreign farming industries. Especially at the beginning of this century, the cost of the labour force on foreign markets increased and production volumes shrank. The demand gap on the international market grew bigger, and due to factors like the growing prosperity of the Chinese people, the Chinese berry industry developed pretty fast. A lot of cultivation bases emerged all over the country in the form of agricultural cooperatives. Large-scale bases cover over 600 hectares. They are mainly concentrated in the North-East, Jiangsu, Yunnan etc. Every year from June until the beginning of September, fresh fruit is produced. The yield can reach 30 tons per hectare."
"Even though the production volume of raspberries in China isn't low, 95% to 97% is destined for export. The domestic market is tending towards a void. No matter if its raspberries or blackberries, apart from first-tier cities like Beijing, Shanghai and Canton, consumers of other Chinese cities have very few chances to come in contact with berry products. But the profit from exported frozen fruit is not stable at all. What's more, the quality of the domestic berries isn't high. There are plenty of B grade fruits and the profit margin isn't big. Also, berries help to prevent cancer and have other healthy effects. The development value is very high, but further processing in China is lacking to a large degree. Concerning the development process of berries, if the complete upper and lower chain for production of berries in China is opened up, a market exists with a scope of hundreds of billions."
Chinese production of berries has existed for a few decades. What bottleneck factors have restricted the development of the Chinese berry market?
"I believe that the main bottleneck that restricted the berry production in China was the slow-paced upgrading of the agriculture, the lagging-behind of cold chain logistics and the shortage of market promotion."
"The slow upgrading of the agriculture is a common problem in the Chinese agricultural industry. When it comes to berries, the current Chinese market centres around the cultivation bases that were established by the agricultural industry cooperatives. The age of the farming practitioners is not distributed evenly and many are growing old now. The basic practice is to buy membership to a trade alliance with sapling trees in order to cooperate in foreign trade. The gardening management, cultivation techniques and quality control are studied but not implemented as a system. The market is blind to the differences between cultivated varieties and the direction of development of the farming isn't clear. The most exemplary moment was in 2008 with the 'White Horse Blackberry affair'. Because information on the market was unbalanced, the industry was structured on one single factor and the production system consequently encountered a regional collapse. Blackberries with a considerable value that were destined for export had to be thrown in the gutter by the farmers to rot. The extent of the economic loss was tens of millions."
"The development of cold chain logistics in China is still in its initial stage. Fully developed countries like Japan or the US have a 95% use ratio for their cold chains. The use ratio of cold chains in China for fruits and vegetables is only 15%. But berries are a small and very valuable product, from harvest to storage to transport, the level of cold chain preservation is very high. So the level of development of cold chains has severely restricted the speed and expansion of the Chinese berry production development. Let's compare foreign and domestic cold chains. Foreign imported berries are usually flown straight into China, but berries exported from China are usually frozen in cases to be exported on cargo vessels. The economic profit is thereby given a large discount."
The relative lag in farming and cold chain logistics caused the development of the berry market in China to start from a low level. It also goes at a slow speed. After 2010, a lot of imported fruits from small entrepreneurs came on the radar of the large mass of consumers. At the same time, online fresh produce shops also emerged in China, adding fuel to the fire. The demand for Chinese berries has been increasing ever since. The fact that international berry giant Driscoll's has taken root in Yunnan is a very clear signal: the surge of the Chinese berry market has already begun."
As regards the current potential and bottlenecks in the Chinese berry market, what are the opportunities for Nice Berry?
"I personally believe that the opportunities on the market aren't random. They are the sum of several factors. Modern agriculture has been an important focus of the government in the past few years. The sudden appearance of online fresh produce shops has triggered strong reactions from modern farmers and the internet. New fruit brands pop up and wait for the consumer to switch from a 'cheap product consumption pattern' to a 'quality product consumption pattern'. Capital investments and branding are starting to gain momentum in modern agriculture. The agriculture industry is now attracting more 'top of the crop' technology experts and management experts. In the next decade, the agricultural industry will go through a game-changing development."
"Regarding these opportunities, Nice Berry is first and foremost a business. Pushing forward the development of the production industry can only come second. In the Chinese berry market, we persist in starting cultivation on every farming field with a quality inspection of the soil. We control the berry quality from the bottom of the chain. Through a rigid selection mechanism, we sign agreements with multiple berry farmers. We export technology and resources. That way we establish joined-up farming fields. The farmer gets the guarantee that he can sell his products. On that basis he can use our investments to improve farming management and the level of fruit control. The result is that A grade fruits are mainly produced instead of B grade fruits. It also strengthens the competitiveness of the business. Based on this improved quality, our market receives more approval and chances for development. It all becomes a positive cycle. In the meanwhile, we are still actively joining up with some foreign berry enterprises and enterprises that deal in further processing. We help them to get a foot hold in the Chinese market, while also allowing better production technology to flow to China for a swifter development. We look toward the possibility of fresh fruits the whole year round and brilliant new processed products. All of these showcase the 2.0 era of berries.
