The opportunity for the Australian industry however extends back from a well packaged, enticing array of Australian lamb racks on the meat shelf. Distribution channels and supply chains are crucial if sustainable sales to an affluent market are to be achieved.
Outside of China’s major metro areas, the cold chain distribution is still unreliable and it is estimated just 15 per cent of food, meat and vegetables in China are transported via the cold chain, compared with 90 per cent in more developed countries. The ongoing development of China’s cold chain logistics will effectively reduce food wastage during transportation and improve food safety.
The resulting impact on consumption patterns is staggering, particularly for inland cities, where consumers will be able to access all types of new products that require refrigeration.
Moreover, the total growth in food distribution, including wet markets, organised retail, fast food chains and hotels, restaurants and catering represent such a shift in the nature and quantities in the industry that it will require far more resource intensive production in terms of land and water, which also suits Australia (despite the recent droughts in major productive areas) and New Zealand.
With just seven per cent of the world’s fresh water and 10 per cent of the agricultural land but nearly 20 per cent of the world’s population, China has some challenging policy decisions to make on self-sufficiency and food security. Australia and New Zealand are very well placed – but so too are nations like Brazil and Argentina.
The work to be done in Australia is not so much inside the farm gate, our product is often world class. The challenge is managing the packaging, the marketing, the distribution. It may mean more joint ventures with Chinese partners to ease market access challenges. It will certainly mean understanding how the emerging Chinese consumer responds to the presentation of the product and the brand. That requires intimate knowledge of the intricacies of specific markets and their supply chains – and there are many in China.
Read the report: Feeding the Dragon: The Modernisation of China's Food Industry
Tania Motton is ANZ's General Manager, Regional Business Banking, including Regional and Small Business Banking and Esanda. She brings more than 20 years experience in financial services, natural resources and consulting to the role.