Shoppers in Xi'an, in China's northwest, site of a planned centre showcasing New Zealand food products. Photo / Mark Mitchell
Shoppers in Xi'an, in China's northwest, site of a planned centre showcasing New Zealand food products. Photo / Mark Mitchell
Personal links key to getting NZ products on China’s shelves.
For the next six weeks, the Herald, in conjunction with BNZ, unlocks the path New Zealand food and beverages take from the ports of China to the plates of Chinese consumers. Written by Helen Twose, the series debunks the myths, reveals the hidden dragons and shares the success storiesof New Zealand businesses taking products to the giant Chinese economy.
A business connection made over lunch has dished up an opportunity for Southland beef and lamb in the Chinese city of Xi'an.
Mike Wilkins was in the historic city, home to the Terracotta Army of Emperor Qin Shi Huang, attending the World Dairy Expo & Summit last year, when he sat down with Chinese importing business ZN International Trade.
The face-to-face meeting resulted in Wilkins being back in China last week as ZN International Trade announced plans for a 330 million yuan ($80 million) centre showcasing New Zealand food products, due to open in the middle of next year.
Backed by Chinese investors with links to New Zealand, the multi-level facility will include Wellington-based Mojo Coffee, a restaurant run by Matterhorn owner Mark Keddell, a function hall, trade centre and supermarket. Also on the cards is the biggest automated cold store in Northwest China.
For Wilkins, that invitation trumped the many inquiries he receives through the website of his highly diversified South Island farming business.
"We're farmers, we're not progressive marketers like an Alliance or Silver Fern and you don't actually know who to put your time into."
Until he made the trip last year as part of a business delegation backed by the BNZ, Wilkins had never set foot in China, even though he was already sending product there.
Although he returned home with a clutch of business cards, it was the introductions made on the ground in China that were most meaningful.
"These trips, you get access to places that you don't just walking off the street," he says.
"Even if you don't do any direct deals yourself, but if you're a farmer or an exporter that relies on markets like China, it gives you an understanding of the potential out there to still get out of bed in the morning, because at the moment there's not much positive news in the media around dairy prices.
"To see the opportunities that are still here is pretty exciting."
Mike Wilkins was in the historic city attending the World Dairy Expo & Summit, when he sat down with Chinese importing business ZN International Trade. Photo / Mark Mitchell
It's not just dairy prices that are getting bad press. China's slowing economy, volatile sharemarket and tanking demand for commodities are all grabbing headlines.
BNZ head of Asian business Paul Gestro has a more optimistic slant on the news out of the Chinese economy.
Although the end of the infrastructure boom in China has dampened demand for iron ore and coal, products coming out of New Zealand are still on Chinese consumers' shopping lists.
"I think our exporters that export very high value goods into China that are consumed quite readily, and people pay a good price for it, that won't change," says Gestro.
"People aren't getting poorer in China; sure, some have lost a bit of money on the stock exchange, but if you look at the percentage of people that have money invested in stocks versus housing - and housing is taking a bit of a rise again - they're not in a bad way at all."
What is behind the slowdown in China, says Gestro, is falling demand for China's manufacturing might, as businesses seek lower-wage economies elsewhere in Asia, as well as an overall slowing of global demand.
"It's not one or the other, but both together," says Gestro.
Drive down a gridlocked street in Shanghai or visit a shopping mall jammed with high-end luxury brands and there is no evidence of a slowdown, he says.
But get 15 minutes outside the city boundaries, to a fully built ghost town that would have fixed Auckland's housing crisis in one swoop, and you get an appreciation for the problem, Gestro says.
"That's one of the issues with China; they've gone for such a big infrastructure investment into their own country that they've kind of over-invested."
Getting clients and key staff to experience the Chinese dynamic for themselves is an important strategy for the bank.
For the second year in a row the BNZ, with help from China-based staff with Australian parent NAB, is following the path of New Zealand products from arrival in China through to local consumers on a "port-to-plate" tour.
"They will see first-hand and hear first-hand what it takes to be successful. When we say port-to-plate, it's all those bits from when your product lands in the market right through to when the consumer buys it, what needs to happen on its way."
He says the investment in a trip is paid back in spades if it means fewer mistakes.
Helen Twose travelled to China courtesy of the Bank of New Zealand.
