Jack Liu, president for the North American and European divisions of China-based Dalian Zhangzidao Fishery Group, is on the hunt for suppliers to serve China’s burgeoning middle class population at this year’s European Seafood Exhibition (ESE).
The China-based company, which has seven factories in China and claims to have a hold on 70% percent of China’s scallop market, began importing seafood to sell in China for the first time this year and is now planning a full scale launch of imported products across a range of finfish and shellfish species, farmed and wild.
To pull it off, the company will need strategic partners from other corners of the world that suits the upper middle class markets it is targeting.That means crab, lobster, shrimp, scallops and salmon, to name a few.
Liu, who plans to aggressively hunt for new suppliers at the ESE, has a personal target of 5,000 metric tons in imports to the Chinese market this year, up from zero last year.
The company has sourced all its seafood domestically until now, and although Dalian is eyeing strong demand in China, it may be tough to find suppliers that fit the bill.
“We need large volume,” said Liu. “We don’t want to deal with 100 smaller suppliers.”
But at the same time, quality is important to the mid-to high-end market Zhangzidao Group is targeting.
Liu: We can’t expect a one stop shop
Zhangzidao Group, with its root as a fishermen’s co-op, is what the company calls the “pioneer of the sustainable seafood” in China.
Its scallop fishery is currently the only Chinese fishery in Marine Stewardship Council assessment, and it wants to add to this reputation in its sourcing decisions now.
As the it looks to change its product lineup, the company plans to keep its standards in tact.
“Zhangzidao Group will use the same philosophy when it comes to sourcing seafood resources for Chinese market, which means Zhangzidao Group will only source from sustainable, well-managed resources,” Liu said.
The company plans to work with their suppliers to ensure their buying will ultimately benefit fishermen and local communities.
But Liu’s hope to find well-managed resources does not stop at the environmental level. He is also scouting out suppliers that know how to retain quality in the seafood.
Liu says finding a one-stop shop style distributor to meet all of its needs is highly unlikely.
“That would be lovely,” Liu said, “but the reality of the industry is that one particular company can only be good at one or two items…really, it’s not an industry reality to expect a one stop shop.”
He wants suppliers that not only are sustainable but can also specialize in certain species while being able to meet the needs of Chinese specifications, which can differ greatly from what mid-to-high-end suppliers are used to. Crab, for instance, is popular in live form in China, versus cooked form in the US.
Companies in the US are still learning the ropes on live shipments of crab, and Liu hopes they learn fast, considering customers in China are asking for Dungeness more and more.
“I can tell you right now, for the near future, one of our focus(es) would be crab,” Liu said. Most important are king and Dungeness varieties, he said.
Other hotly sought items include king crab, lobster and farmed salmon. Loster has been sold in the country for ten years, but companies have had very little expoerience with farmed salmon so far.
There is also demand for imports of species that China already has access to on its home turf, such as shrimp and scallops.
“The reality is, the demand is growing so dramatically that the domestic resource cannot meet the demand,” Liu said.
Yet there are some popular US items Chinese consumers just are not interested in, such as tilapia and pollock, as they lack the strong flavor Chinese consumers are looking for, Liu said.
When asked if he is confident the company can afford the price point it takes to get access to crab from the US, Liu said not only can they compete well, but Chinese consumers are willing to pay more right now for crab than US consumers. That will be important, considering US buyers can naturally sell Dungeness crab from the US West Coast cheaper since freight is cheaper for them.
UnderCurrent News April 24, 2013 Jeanine Stewart