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Food Ingredients China

27 March 2009 1,798 views No Comment


Today was customers’ day for me. I had an appointment with a customer at the opening time of the show and walked with him along a number of stands on the top floor of the Everbright; regularly stopping at selected major companies to discuss the status quo of their markets. These conversations proceeded as usual. Many people at the stands like to show off their English, so you let the customer start the discussion in English. Only in case the conversation seems to not be going to deliver the desired information, I will intervene in Chinese. This usually works well, and leaves all parties with a pleasant memory of the discussion.

One of the topics discussed this morning was enzymes. The Chinese market for food enzymes is still dominated by the major international suppliers. However, a number of Chinese manufacturers also have a market sthare of their own. One application area that is heavily affected by the global financial crisis is apple juice. China is a major production region of apple juice concentrate, but most of this product is exported. This heavy reliance on the international market makes this industry vulnerable for the fluctuations on that market. A growth market for enzymes is animal feed. The price of animal feed has increased recently, to the point that it has become interesting to apply a wide range of enzymes to improve digestion, bioavailability of nutrients, etc.

The second customer was waiting for me at 13:00 hrs. We ventured on the shuttle bus to go to the area of the other two venues, in particular the Shanghai Intex (Shanghai International Exhibition Centre). Ever since this venue was added to the Everbright, the organisers of FIC have reserved this space for the flavour companies. Flavours are the largest subgroup of food ingredients in China, so the Intex houses a collection of relatively large stands. When you enter this venue, it is also immediately clear that the flavour companies have larger marketing budgets than their sister companies in other sectors. In particular companies supplying traditional ingredients for traditional Chinese food distinguish themselves with their specific image. It was also interesting to see a Spanish trader in food flavours exhibiting at FIC, which has so far never participated in a trade fair in Europe. Their rationale is that they they do not need to participate in an exhibition in their home country and that the rest of Europe is not a major development region. China, on the other hand, tops their list of regions where they want to expand, hence their presence at FIC 2009. Is there a stronger proof of the growing importance of China in the global food ingredients business?

This is a challenging thought. The Chinese market is now so large, that a major Chinese supplier of a certain food ingredient is almost automatically a major global player as well. One of the most conspicuous stands at the Intex was that of Laoyangyuan, a producer of traditional broth mixes for use in spice mixes packed with instant noodles, etc. It is a good example of a supplier of a traditional Chinese food ingredients, as introduced in the previous section. Laotangyuan is hardly known outside China, but due to its position in the Chinese market, it deserves to be ranked among the world’s top flavour houses. I realise that this is an unorthodox way of defining ‘famous,’ but I believe it is defendable. Perhaps this way of looking at ‘famous’ will stimulate a number of people in in Western nations to open their eyes for the famous national brands in countries like China, Russia, etc., and how these could help innovate the global market.

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