Food and Beverage Opportunities in AsiaBy Sofía Hanna | Tue, 02/09/2021 - 13:31
Q: How has the commercial relationship between Mexico and China benefited the food and beverages industry?
A: China is Mexico’s second-largest trading partner in terms of foreign trade, the second-leading source of our imports and the third-largest destination for our exports. In the case of processed products or products that do not require a sanitary registry protocol, China also represents an important opportunity for Mexican companies. At COMCE, we have identified some products with high export potential, such as avocado oil or pulp, roasted coffee and sauces, as well as tequila and mezcal. A recent study we worked on with Universidad Iberoamericana identified Mexican chocolate as a high-potential product in the Chinese market.
Chinese consumers value food safety due to the recent crises that have affected much of the population. The good news for Mexico is that our food and agricultural products can satisfy this requirement as they are recognized for their quality.
Q: What success stories have emerged thanks to the relationship between China and Mexico?
A: Mexican business delegations have been present at the China International Import Expo (CIIE) in Shanghai for three consecutive years (the last one virtually). COMCE has accompanied almost 100 Mexican companies to promote their products in the Chinese food and agricultural sector, including chia, fresh avocado and derivatives, beef and bananas. We have also received support from associations like ANEBERRIES and APEAM, as well as CNA, all of which have done a splendid job in terms of promotion. We can also mention BIMBO’s success case. The company has now consolidated not only in northern China but in other regions in the country
Q: Besides China, what other Asian countries should local businesses consider to expand their business and why?
A: It is important to consolidate a solid supply portfolio to continue strengthening logistics and distribution. Many Mexican companies have shown interest in participating in markets like South Korea and Japan that are considered highly demanding. As Mexico is a competitive and quality food producer, Mexican products like orange juice, green coffee, beef, pork and seafood have passed the test of the most demanding palates.
Markets like Singapore and Hong Kong are benchmarks for these types of products, as consumers have high purchasing power and are looking for innovative and quality products. Perhaps in this category, we could include Australia and New Zealand. Having said that, the Mexican food culture is very well positioned there, albeit with local adaptations. Examples of these products are tequila and mezcal, as well as chocolate, sauces, oils, flour for preparations, preserves and chilies.
One of the most interesting markets for Mexican food is Southeast Asia. However, the challenge is to comply with the Halal certification. Although important progress has been made and negotiations are underway with the corresponding authorities, we are still waiting for the opportunity to enter these markets.
Q: How attractive is Mexico’s flagship export, avocado, in Asian countries and what was the process to introduce it to these markets?
A: Avocado, for the Asian consumer, is a novel product. Education regarding its consumption has been an important part of promotion and advertising campaigns, from the degrees of ripeness, the method and moment of consumption to its nutritional value. This fruit is now available at retailers, from large supermarket chains to online sites. The strategy of increasing awareness of avocado as a "super food" has also contributed to its good positioning. We see avocado not only in greengrocers or specialty stores but at juice bars and in restaurants, both brick-and-mortar and online.
In China and the rest of Asia, the most recommended strategy is to ally with a local partner to manage the distribution or local marketing of the product. COMCE helps companies to identify potential allies. Our participation at exhibitions and trade fairs has been among the most important tools to accomplish this purpose.
Q: What are some of the difficulties that businesses experience when first moving their product or production to Asian countries?
A: There is a lack of knowledge about the business opportunities that our country represents. Companies are also facing other particular issues including high logistics costs to ship products to Asia, the consolidation of convenient logistics routes for the transportation of fresh produce, in addition to tariffs and sanitary restrictions. There are also cultural differences and language barriers. Economies have some similarities, however, although each country in the region has specific needs and demands.
Q: How does COMCE support businesses that are interested in expanding to an Asian market and what are your requirements?
A: COMCE provides support to food-related businesses in different areas and activities, such as trade missions, participation in commercial exhibitions and trade fairs, seminars, webinars and business intelligence documents. Companies wanting to participate in any of these programs can become part of the organization as associated companies through an annual membership, which gives them the opportunity to receive daily information on the activities that we organize for Mexican companies, not only in Asia but the rest of the world.
Last year, COMCE and Bank of China organized Supply and Demand Business Meetings during the China International Import Expo (CIIE), bringing together 20 Mexican companies for around 60 virtual meetings. We were also focused on exploring the possibilities of integrating traditional companies into e-commerce. Mexico has a great deal to learn from Asia and we are working together with our counterparts in the region to consolidate schemes to grow Mexican business in electronic platforms. We are exploring a project with Singapore, for example.
Q: How have investments and exports in the food and beverages market evolved in the last year?
A: Because of COVID-19, I see very significant changes in all industries, not only in the food sector. The most obvious is the transition from traditional sales to e-commerce. In the food sector, companies are creating or joining digital marketplaces to offer their products. In some cases, companies are even saving money by eliminating high operating costs.
Particularly in the Asia Pacific region, the food industry has had to adapt to new models. For instance, large consumer markets, which traditionally had only one or limited supply sources, have chosen to seek new suppliers and diversify imports. Food has become a high priority sector. Hence, recommendations have been made to facilitate trade and logistics, as well as regulatory and certification processes.
Q: Mexico was invited to FOODEX JAPAN 2021. What opportunities are evident in these kinds of events and how can they benefit local companies?
A: FOODEX is one of the most important food sector exhibitions in Asia. It is held in Japan and a significant number of Mexican companies will participate in this year's edition. This work will be coordinated by CNA, which has done a magnificent job around this event and the promotion of Mexican food in that country.
In China, COMCE, in collaboration with the Mexican government, chambers of commerce and state governments, participates every year in the China International Import Expo (CIIE). In the first edition of this event in 2018, we participated with 35 companies. In 2019, we participated with almost 60 food companies.
Q: How might the Mexico-China relationship change in light of trade tensions between China and the US? What opportunities do you see regarding reshoring and nearshoring operations?
A: Given Mexico’s commercial ties with the US and our strong relationship, supported by USMCA, Mexico provides great advantages to Chinese companies that want to export to the US. We are presenting and sharing information to our Chinese counterparts on relocation of industries to invite new companies to establish in our country and take advantage of USMCA.
Mexico’s integration with the US economy provides the perfect gateway for Chinese and Asian businesses to strengthen access to the US market. We recognize ourselves as a key business partner as part of the North American factory, having an innovative industrial platform and offering opportunities for industrial relocation and business development.