Mission Produce to push avocado reach in China through partnership

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Mission Produce to push avocado reach in China through partnership

California-based Mission Produce sent around 20 containers of Mexican avocados to China last season, but this year it aims to broaden its reach through a partnership with Lantao.

Lantao's Guo Li Xiang with the first shipment of Mission avocados received by Lantao.

Lantao's Guo Li Xiang with the first shipment of Mission avocados received by Lantao.

The first lot of the campaign arrived this week, while Mission export sales representative Thomas Padilla told www.freshfruitportal.com there were currently four containers on the water headed for China right now.

"Our plan is to have a container heading out weekly and then obviously expand it - through November, December and January we're really going to make a push to put the fruit throughout China to all their distribution centers," he said.

"We want the wholesalers to get used to seeing our product every week and because of our strengths at Mission, we have the ability to source 12 months a year; right now the only origin that's allowed in China is Mexico, so we're sourcing from different areas in Michoacán."

But Mission's efforts mean a lot more than supplying a steady stream of fruit to the Chinese market, where with Lantao the company hopes to start building its brand there by educating people about how to handle and eat avocados.

"Chinese consumers are still eating it as a spread, or maybe in salads, but the most common way to eat it is to cut it and eat it with a spoon, maybe put some soy sauce on it; they really don’t know how to eat it yet," Padilla said.

"I’m still learning about the demographics but it’s a lot of the younger demographic who are eating it, but we are marketing it towards the older generation because of all the health benefits we’ve seen here in the U.S.

"The distribution chain is through wholesalers who are introducing it to the big retailers. It's a little bit more risky for those guys because traditionally the Chinese associate a good avocado as green, and we’re trying to change that perception, letting them know that if it’s in retail and it’s dark, it’s actually a better piece of fruit."

While education efforts are very focused on retailers in the U.S. through ready-to-eat programs, Mission and Lantao will need to first teach Chinese wholesalers about the product.

"In China you don't have that true distribution network like you do here with your Krogers and Aholds – it’s similar to what it was 10 years ago when Mexico opened up its avocados to the U.S. East Coast; no one , even in the Midwest, really knew what an avocado was.

"We see the same trend is going to happen in China and a lot of the education is going to go into the wholesalers; there are going to be leaflets on how to hold the products, what temperature to hold them at, maybe an explanation of performance throughout the season, just to get them familiar with it.

"Now, 80% of the fruit we sell is ripe and ready to eat, so ultimately that’s our goal in China. The market’s a little bit immature for that, but once the market matures in China, our plan would be to introduce the ripe and ready to eat fruit in China."

Lantao, which has branches in the big three centers of Shanghai, Beijing and Guangzhou, aims to build Mission's avocado profile in the country's secondary markets, which according to the United States Department of Agriculture (USDA) have higher growth rates. The company also has offices in Zhengzhou, Shenyang and Harbin - all cities with populations above eight million people.

"For the last year it’s usually been Mission sending one container a week over to China, but this past week I saw the report and we saw four companies sending fruit to China, which is a good sign," Padilla told www.freshfruitportal.com.

"Our worry is that the market will get saturated with avocados, and that’s why we think it’s important to brand our label and pick a company like Lantao to carry our product - my understanding is that a lot of guys in Mexico will see the opportunity in China and just start shipping to receivers in China who really don’t know how to handle the product.

"When that happens it'll be a bloodbath there. People will have to discount their fruit on the market because it is starting to age; in any developing market you’re going to see that, which is why for us it was important to select key partners there to handle our label."

He says most of the main Chinese fruit receivers are based in Shanghai and tend to sell the product there, but through Lantao, Mission's avocados will be able to move further afield more quickly.

"Our goal is to always move a container within five or six days. Having these smaller tier cities, we can receive the container by Lantao in Shanghai and immediately distribute it to not only Beijing and the south in Guangzhou, but go to Hangzhou and the smaller cities also and get our fruit out to the network faster.

"One, it helps us move the product and two we start educating these smaller tier cities about how to consume the product and what it is."

Padilla will be visiting Lantao's facilities with Mission's sales director Ron Azaiza in December, in order to better understand the market and find ways to get consumers to better understand avocados.

"We are very excited about the potential for avocados in China.  Our strategic alliance with Lantao gives us a strong partner in the market who understands avocados and our business model," Azaiza said in a release.

"We believe this market is staged for growth, and we’re excited to be leading the way in this expansion."

Lantao CEO John Wang said the strategy would be toward slow but steady growth in second-tier markets.

"The new marketing approach through the inner cities will increase consumer recognition of avocados and lead to more Chinese people trying the fruit for the first time," Wang said in the release.

"Our goal is to slowly increase consumption through education and trials until there is greater acceptance with the Chinese consumer.  As the leader in avocado marketing, Mission is the ideal partner to work with to achieve this goal together."

While Mission's avocado exports to China are currently from Mexico, Padilla believed the market would eventually need many sources to ensure year-round supply, from growing areas such as Chile, Peru and California.



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