Expectations and constraints for Chilean blueberries in Asia
Chilean Agricultural Minister José Antonio Galilea has announced the country's blueberries will soon be shipped to China, with inspectors from the Asian nation expected to arrive this week for final approval of the first containers. At www.freshfruitportal.com we catch up with Allfresh Exportaciones' Francisco Ortúzar to discuss what the opening will mean, the challenges ahead, and opportunities further afield in the Asian continent.
Ortúzar is upbeat on the prospects for Chilean blueberries in Asia, but highlights the fine details of the protocols will be important in determining how successful shipments will be.
"In signing the protocols they should consider transit protocols because to send by air to China it has to go through the U.S., Europe, Australia or New Zealand - therefore in the same protocols they have to incorporate transit protocols for this cargo in countries that are also not authorized to go to the Chinese market.
He adds that if these protocols are not included then the only way to get the blueberries to China will be by boat, leading to longer transit periods. On the import end, Ortúzar points to a lot of 'noise' from Chinese buyers who want in on the Chilean berries.
"Now the most positive thing we have to say about phytosanitary protocols with China is that finally Chile will be able to promote and market blueberries, and that is a direct help for consumption, in terms of more promotion and more publicity for blueberries, so the market will be greater."
"There is a lot of interest but ultimately, doing business in China is still difficult because of payment issues, because there isn't credit insurance that will cover sales to Chinese companies - a lot of the time these companies don't have financial information to be able to open an approved line of credit from credit insurers.
"So the constraints of doing business are high."
The executive told www.freshfruitportal.com that China has around 2,500 hectares of productive blueberry farms planted, but there are difficulties in growing fresh blueberries of quality in the country due to weather issues - a lot of rain in summer and extreme winter temperatures. In addition, 90% of production goes into IQF (instant quick freezing) or juice.
Domestic production is important for ensuring ongoing supply and therefore better demand during the Chilean season, which is one of four main points that Ortúzar raises when it comes to growing the market. Other key issues include phytosanitary protocols; strong investment in promotion, marketing and publicity; and the necessity for investment in technology to allow the fruit to travel by ship for long transit periods.
Blueberries in the rest of Asia
When it comes to other blueberry markets in Asia, Ortúzar doesn't think Japanese and Taiwanese consumption can grow very much.
"I believe it's (Japan) going to remain fairly flat despite the fact that Chile is the only country in the Southern Hemisphere that can go directly to Japan, due to phytosanitary issues," he says.
"The phytosanitary requirements in terms of pesticides are a lot stricter in Taiwan than other Asian countries, so volumes are also restricted - consumption in Taiwan is low. Right now they don't have the capacity to consume more than one shipping container each week."
In the case of Singapore, he says shipping times are so high that the only way for the fruit to arrive is directly by air, or by a mix of shipping and air freight via the U.S.
Malaysia and Thailand are still young blueberry markets with very low volumes and difficult conditions for the fruit like high humidity levels and temperatures, as well as inadequate cold chain facilities.
Consumer demands and distribution channels
"The most demanding consumers in Asia are the Chinese in terms of size, bloom, firmness and sweetness," says Ortúzar.
He highlights the Chinese preference for sweeter fruit varieties, which acts as another restriction for blueberry exporters.
"So it's a product with added value, a large size, a very good bloom, there are sweet varieties and hopefully they will be more consistent in size, because in general in Chile and almost all blueberry-producing countries they do not size the blueberries.
"A small-sized blueberry of a low bloom does not have a price in China.
"So all this noise that exists on the part of growers, on the part of exporters and that everyone speaks about in China, they have to know what are the requirements with which they have to comply to be able to arrive in the market, and to be successful in this market, because if not it will be a very risky market."
"You could go with a smaller blueberry of 12mm (0.47 inches), but any problem in the product's condition is strongly punished."
Ortúzar adds that Hong Kong's wholesale market is very limited.
"They are small markets that don't move a lot of volume - volume is driven at the supermarket level with promotions and marketing."
He says the quality of fruit sent to Singapore is quite average and that the wholesaling is done through the supermarkets. In Taiwan, sales are made at both the wholesale and retail level, but in recent years volume has been low.
The Japanese situation is a bit more complex and needs to be seen at three levels - wholesale, supermarkets and confectionery. For the latter, the fruit needs to be as uniform as possible with a good bloom and firmness.
He says Japanese supermarkets and wholesalers request blueberries that are as healthy as possible.
"Today a lot of wholesale sales end with the confectionery business, so it has to be considered that 50% of Japanese consumption requires blueberries of 13-14mm (0.51-0.55 inches) that goes to the confectionery business and the rest goes to supermarkets or wholesale."
Chinese market challenges
"Business in Asia for me is mainly by ship so there has to be investment in technology as transit times are long," says Ortúzar
He emphazises the fact varieties sent to China need different specifications, while developing the market can be difficult as the product that goes there is not the same as fruit destined for the U.S. or Europe.
"There is a very low blueberry consumption level in China. Despite having 1.3 billion inhabitants it is a product that is still not known. The consumer has to be educated."
He says it is critical that Chilean exporters work together to organize the development of the Chinese market, as without doubt it is the market of the future.
"Today, although there is a committee, the truth is that the exporters do whatever they want, but to develop these markets they have to work together.
"Unfortunately it's a market with a lot of players - so having an agreement, for example, from the side of Chilean exporters to work with a certain quality under certain market parameters, I believe this is the task that needs to be done.
"Ordering distributors is practically impossible in Chile, but at least we can have an agreement here in product specifications that have to be met for going to China."