Accessing the Chinese Agri-Food Market

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So there are few key trends that are happeningin China that Canadian companies should be aware of.

Number one is the demand for highquality, safe food products.

For a lot of Chinese consumers, they associate food safetyand high quality with imported products.

And for Canada, we have a strong reputation forour food safety systems, as well as our clean, pristine, natural environment.

So we alwaysencourage Canadian companies to associate their products with the Canada brand.

Agricultureand Agri-food Canada has a Canada brand program, which provides registered companies with asuite of tools that they can use in their promotions and their marketing, and this includeslogos that they can use in their packaging that highlights the Canadian content and theCanada brand.

So this is one way that Canadian companies can leverage that strong reputationthat Canada has in this market when marketing their products in China.

Another key trendis the emphasis on healthy eating in China.

Chinese all had a tradition of food as medicine.

But as more and more people have the means to pay a premium for a healthy food; it becomesincreasingly important for companies to market health qualities of the food that they areselling.

So for a Canadian companies, it could be something like omega 3 levels in salmon,or antioxidants in blueberries, or the fiber protein levels in yellow pea flower.

Whateverthose health benefits quantities are, it is important to communicate that message to Chineseconsumers.

Another very important trend in China is e-commerce.

So in China, there are some 300 million + consumers that are purchasing products online.

That is almost the entire population of the United States.

Trade commissioner’s servicein China really tries to support e-commerce promotions featuring Canadian products.

Sothis is an effort to build the Canada brand.

Now e-commerce changes the way products aredistributed in China, but it does not replace the need for Canadian companies to build strongrelationships with their primary distributors in China.

What it does do, is it shortensthe distribution channels somewhat, which can have an impact on the final price of theproducts.

It also gives Canadian companies access to second and third tier markets, whichin the past, were perhaps more difficult to access.

So in addition to Beijing, Guangzhou,Shanghai, Canadian companies get easier access to Ha’erbin, Qingdao, Xi’an, etc.

E-commercealso provides global purchasing platforms.

This is a way that Canadian companies canregister their products for sale in China, from Canada.

Another important thing for Canadiancompanies is to find their niche, and market the unique characteristics of their products.

China is a huge market; it is a very competitive market.

But Canada needs to find our niche,and market our unique characteristics.

So for example, it could be the marbled qualityof our beef, it could be the unique variety of lobsters that we have versus other lobsterproducing countries like Australia, New Zealand.

It could be unique products that gooey ducksea cucumber which are not necessarily popular in Canada, but which sells very very wellhere in China.

So it is important for us to emphasis what we do well.

We thought a lot of the opportunities in China for package, processed products and beverages,but I think the relationship between Canada and china in the area of agriculture tradeis going to be driven in the long term by primary commodities.

Now we have a great reputationfor the primary commodities we sold to China, we can continue to build on that by demonstratingthe unique advantages and characteristics of these products.

So for example, the pulseindustry has been very active in China in demonstrating the fiber and protein contentof pulses in an attempt to expand the use of pulses away from just the vermicelli productioninto production of Chinese snack foods.

The canola industry has been very active in demonstratingthe value of canola meal as a feeding dairy production as well as in agriculture production.

We have had Canadian companies that have been marketing flax as a higher omega 3 feed.

Sothese are examples where producers of primary products and primary agriculture can growthe value of their product by marketing their advantages.

Another area where Canada drawsgreat reputation is animal live-stock genetics.

As I mentioned, China is a growing marketfor consumption of meat, and this makes more livestock production in China.

So as China'slivestock industry grows, they are going to have a growing demand for world class geneticsand Canada can fill that demand.

Canada over the years has enjoyed a lot of corporationsin China through international development project, as well as science and technologycollaborations.

and a lot of this is focused on primary agriculture production, and I thinkat this stage we can really leverage this relationship that we built with China intonew commercial opportunities, so I think down the road we are going to see more demand forCanadian green technology, green agricultural production technology, green handling andstorage equipment, farm machinery, live-stock production software, maybe sea productionsoftware.

Things like this, I think Canada has a lot of opportunities.