Bord Bia, Shanghai Office
Asian Markets Presentation 2015
Growing the success of Irish food & horticulture
Irish Exports to Asia (2013)
Vietnam ,
€32.5, 6%
Philippines , Thailand ,
€15.4, 3% €10.9, 2%
Indonesia ,
€15.0, 3%
China ,
€224.5, 40%
Market
China
Hong Kong
Malaysia
Malaysia ,
€34.9, 6%
Vietnam
South Korea ,
€27.1, 5%
Singapore
Singapore ,
€31.5, 5%
Japan
Japan , €25.3,
4%
South Korea
Philippines
Indonesia
Thailand
Hong Kong ,
€145.6, 26%
Growing the success of Irish food & horticulture
€ Value
€224.5
€145.6
€34.9
€32.5
€31.5
€27.1
€25.3
€15.4
€15.0
€10.9
Asia Breakdown: GDP Per Capita (Purchasing Power)
Population
China
Philippines
Indonesia
Vietnam
Malaysia
Singapore
Hong Kong
Thailand
South Korea
Taiwan
Japan
USA
ireland
1,355,692,576
107,668,231
253,609,643
93,421,835
30,073,353
5,567,301
7,112,688
67,741,401
49,039,986
23,359,928
127,103,388
318,892,103
4,832,765
$ GDP 2013
13.39 trillion
454 billion
1.2 trillion
358 billion
525 billion
339 billion
381 billion
673 billion
1.6 trillion
926 billion
4.7 trillion
16.7 trillion
190 billion
GDP Growth 2013
7.7
6.8
5.3
5.3
4.7
4.1
2.9
2.9
2.8
2
2
1.6
0.6
Growing the success of Irish food & horticulture
Figures
do not account for Income distribution: Key where China considered
Asia Breakdown: GDP Per Capita (Purchasing Power)
Singapore
USA
Hong Kong
Ireland
Taiwan
Japan
South Korea
Malaysia
Thailand
China
Indonesia
Philippines
Vietnam
GDP Per Capita (PPP) in US Dollars
2011
2012
2013 11-13% Growth
$60,400
$60,800
$62,400
3.31%
$51,400
$52,400
$52,800
2.72%
$51,300
$51,600
$52,700
2.73%
$41,300
$41,300
$41,300
0.00%
$38,500
$38,900
$39,600
2.86%
$35,600
$36,300
$37,100
4.21%
$31,900
$32,400
$33,200
4.08%
$16,400
$17,000
$17,500
6.71%
$9,100
$9,600
$9,900
8.79%
$8,300
$9,100
$9,800
18.07%
$4,800
$5,000
$5,200
8.33%
$4,200
$4,400
$4,700
11.90%
$3,700
$3,800
$4,000
8.11%
Growing the success of Irish food & horticulture
Figures
do not account for Income distribution: Key where China considered
Irish Exports to Asia (Country, Value, YOY Growth)
China
Beverages
Dairy
Pigmeat
Prep foods
Seafood
244,517,757
3,372,214
163,667,240
34,408,674
22,447,208
12,314,894
45
17
53
-6
Hong Kong
Beef
Beef Offal
Beverages
Dairy
Pigmeat
Poultry
Prep foods
Seafood
Sheep
145,672,865
2,111,071
20,676,587
766,772
97,778,723
4,748,402
948,528
9,922,240
5,816,299
2,900,141
36
558
219
-27
24
-29
-14
Malaysia
Beverages
Dairy
Prep foods
Seafood
34,988,403
98,260
28,954,725
5,840,144
95,244
53
-29
62
57
59
118
Vietnam
Beverages
Dairy
Poultry
Prep foods
Seafood
Vietnam
, €32.5,
6%
Malaysia
, €34.9,
6%
Growing the success of Irish food & horticulture
Prepared Foods: Note: FFMP / Food Prep
32,676,618
423,059
29,194,278
44,396
1,449,655
1,565,230
108
110
121
-88
560
China ,
€224.5,
40%
Hong
Kong ,
€145.6,
26%
Irish Exports to Asia (2013)
Singapore
Beef
Beef Offal
Dairy
Pigmeat
Prep foods
Seafood
31,566,611
96,751
60,793
18,120,445
1,279,170
2,673,392
285,413
18
195
52
88
-47
South Korea
Beverages
Dairy
Pigmeat
Prep foods
Seafood
27,147,838
1,545,189
6,684,122
2,440,429
4,739,740
11,679,225
13
33
-2
18
149
35
Indonesia
Dairy
Prep foods
Seafood
15,022,464
13,946,616
710,159
365,669
-17
-18
Thailand
Beverages
Dairy
Pigmeat
Poultry
Prep foods
Seafood
Sheep
10,903,978
498,088
7,212,442
55,081
153,783
1,961,452
929,955
93,177
-18
-36
-20
157
Indonesia
, €15.0
Japan
25,380,525
-30
South
Beverages
4,234,386
-26
Korea ,
Dairy
5,525,790
-32
€27.1
Ed Horticulture
12,574
Pigmeat
9,893,159
-31 Singapore
Prep foods
1,734,996
, €31.5 Japan ,
Seafood
3,979,620
-38
Growing the success of Irish food & horticulture
€25.3
Thailand ,
€10.9
-41
422
China: Driving Irish Exports in Asia
Growing the success of Irish food & horticulture
China: Driving Irish Exports in Asia
Growing the success of Irish food & horticulture
China: The Macro Environment: Future Growth
Growing the success of Irish food & horticulture
China’s Macro Environment: Demographics
Growing the success of Irish food & horticulture
China’s Macro Environment: Demographics
Growing the success of Irish food & horticulture
China’s Macro Environment: Urbanisation
Growing the success of Irish food & horticulture
China’s Cities: Retail Spend
Tier 1 Cities
4 Cities, 13% of Total Retail Sales,
3% of the Population
Shanghai, Beijing, Guangzhou Shenzhen
Tier 2 Cities
34 Cities, 26% of Total Retail Sales,
9% of the Population
Tier 3 Cities
249 Cities, 9% of the Population
Tier 4 Cities
371 Cities , 18% of the Population
Other % population
classed as Rural
Growing the success of Irish food & horticulture
The Emerging Middle & Affluent Middle Class
Population
Breakdown
High-net worth
Upper Affluent
Disposable Income
More than €1 million in assets
Urban household annual
disposable income of >€32,000 but
less 1m
Lower Affluent
Urban household annual
disposable income of >€15,000>€32,000
Middle Class
Urban household annual
disposable income of €9,080 –
€15,000
Emerging Middle
Urban household annual
Class
disposable income of €6,050€9,080
Poor and aspirants Urban household annual
disposable income of €6,050
Rural Growing the success
Ruralofresidents
Irish food & horticulture
Percentage of
Households
2011
2020
Percentage of
Private
Consumption
2011
2012
0.1%
0.3%
3%
7%
3%
8%
9%
15%
6%
12%
14%
20%
8%
14%
14%
15%
12%
13%
16%
11%
22%
12%
18%
6%
49%
41%
25%
25%
China’s Macro Environment: Urbanisation
By 2011, China’s retail sales in several key
provinces have risen to a level that is
comparable to that of an entire country
Growing the success of Irish food & horticulture
Consumer Trends: Retail & Foodservice
Growing the success of Irish food & horticulture
Foodservice: Driver of Western Foods
Growing the success of Irish food & horticulture
China’s Consumer Market: Product Adaption
China is the sum of many different regions with different consumer
preferences and tastes; a lesson for product adaption
Stark contrasts in disposable income levels between tier 1-4
consumers.
Premium Imported foods such as seafood, confectionary, alcohol
currently limited to Tier 1 with big multinationals now moving into
Tier 2-3.
Growing the success of Irish food & horticulture
Chinese Consumer Trends: Evolving
Food
Safety
Taste
Indulgence
Food Choice
Country
of Origin
Convenience
Natural
Production
Growing the success of Irish food & horticulture
Health
Retail Environment in China: “Extremely Fragmented”
Traditional
Supermarkets
Growing MNC
Hypermarkets
Emerging Premium
Supermarkets
Serve “mass” market
low income groups
A platform with mixed
success in China (failure to
localize
Serving burgeoning
upper middle class and
high income + expat
Serving mass market with
local and imported food
products
A key market for
premium products such
as imported shellfish
Stocking local product,
low opportunity for
premium imported
Growing the success of Irish food & horticulture
Online Retailing in China
Growing the success of Irish food & horticulture
China’s Seafood Market
A Growing Import Market Offering
Strong Opportunities for Premium
Shellfish in Tier 1 but increasingly
China’s relatively untapped Tier 2
cities
Shellfish Market in “early” phase of
developed. It is in high demand but
remains niche (income restricted)
The Premium Market is Growing!!!
Growing the success of Irish food & horticulture
China’s Seafood Market: Channel Selection
Premium Supermarkets (Tier
1 & 2 Cities)
Online Retailing
Work with an Importer
Look Outside Beijing &
Shanghai
Sales of Income Elastic Premium Shellfish increased 34% (2008-13) to
reach 5.9m tons McKinsey Forecast: 40% of urban consumers will be
lifted into the upper middle class bracket by 2022.
(€12,000-€26,000 salary)
What might this mean for shellfish imports?
Growing the success of Irish food & horticulture
China’s Alcoholic Beverages Market
Irish Beverage Exports to China 2013 (CSO 2014)
Beer
Cider
Liqueurs
Non Alcoholic Beverages
Vodka
Waters
Whiskey
Whiskey, €333,996
Waters, €53,041, 1%
Vodka, €2,940, 0%
Beer, €1,030,156, 25%
Non Alcoholic
Beverages, €804,069,
20%
Cider, €204,464, 5%
Liqueurs, €1,703,169,
41%
Growing the success of Irish food & horticulture
China’s “Developing” Whiskey Market
Growing the success of Irish food & horticulture
Growth of Spirits in China
% annual growth
Spirits
Wine &
Sparkling Wines
41.9
34.3
28.2
41.9
34.3
28.2
Growing the success of Irish food & horticulture
12.6
-2
6.4
2
Chocolate & Confectionary
2009
2010
2011
2012
2013
Chocolate confectionery value (RMB bn)
12.2
15.5
18.7
22.1
25.2
Chocolate confectionery % annual growth
30.3
26.8
20.9
18.4
14.0
46.4
55.5
69.6
76.3
84.8
14.1
19.6
25.3
9.7
11.1
Sugar & gum confectionery value
(RMBbn)
Sugar & gum confectionery % annual
growth
Growing the success of Irish food & horticulture
Getting From A to B (Market Regulations)
Growing the success of Irish food & horticulture
Export F&B Products to China
Does your partner / Customer have an import licence
Look at Food
Additives!
Many legal in
the EU are
banned in
China
Ex certain
sugars in
confectionary
Look at Marketing
Claims
Organic Labelling
“Cost Restrictive”
Growing the success of Irish food & horticulture
Gaining Inertia: Initial Steps Can Be A Challenge
Growing the success of Irish food & horticulture
Market Entry Strategy in China: Gaining “Inertia”
Having a
Presence
on the
ground!
Understand
the market
Find the
right
partner
Negotiate a
win-win
deal
Execute!
This does “not” happen overnight. It can take anywhere
from 12-18 months to gain traction in the market! The
most import step – Choosing the RIGHT PARTNER
Growing the success of Irish food & horticulture
1) Having a Presence on the Ground!
Fly-in and fly out almost always fails.
Guanxi (networking / relationship building) is a
fundamental element of doing business in
China.
Remember the working day is 7hrs ahead of
Ireland in China your importers / distributors
cannot address problems.
Growing the success of Irish food & horticulture
Finding the Right Partner
This isn't easy and this is not a short term process. This can
average anywhere from a year to year and a half.
This also requires a level of due diligence; getting accurate
background information (credit checks) is real challenge in
China.
Growing the success of Irish food & horticulture
Finding the Right Partner
Product Knowledge
• Do you have experience in ____?
• How are you going to support me (service
proposal)?
Management &
Stability
• Who are you currently working with?
• What are you financial resources / credit
rating?
Compatibility &
Location
• What is the size of your business?
• Where and what facilities do you have for
you customers?
Growing the success of Irish food & horticulture
Finding the Right Partner – The Contract
1)
A clear definition of roles and responsibilities of your partner – no
ambiguities
2)
Set out all the terms and conditions of the contract
3)
The product scope (target market, market strategy)
4)
The geographical coverage
5)
Payment conditions, % commission or amount
6)
Reporting: monthly or quarterly
7)
Brand management – control of your brand
8)
Liabilities and termination of the contract
Growing the success of Irish food & horticulture
Finding the Right Partner – Remember!
Select your agent – don’t let them select you! Be on guard against
agents proactively approaching you at a trade fair! Visit there offices!
Check for licences – ensure they have the correct import licence
Think about exclusivity – sometimes this works but lay out terms and
conditions – timeframe of contract, volumes achieved, limit geographical
coverage (very few cover all of China)
Retain ownership of your trademark
Growing the success of Irish food & horticulture