Irish dairy brands set for take off in China
The progress and confidence of the Irish dairy presence in China today is a reflection of the amount of work and effort the sector has invested in the market.
During the week-long food trade mission, Irish dairy champions such as Kerry, Glanbia and the Irish Dairy Board (IDB) launched a series of products that showcased just how far the industry has come.
It is not so long ago that Irish dairy concerns relied on selling everything in bulk commodity outside these shores. Today, the likes of Glanbia and the IDB have enough confidence in their Avonmore and Kerrygold brands that they expect Chinese customers to latch on to them even though they may not have the slightest idea where Ireland even is.
The competition is tough. As Deloitte's head of commercial strategy and research in Shanghai, Alan MacCharles, told the delegates on the first day of their whistle-stop tour, China is not for the faint-hearted.
"If you're not the best domestically, you've no business in China. You need to be world class to compete here because everyone who's anyone is here," he said.
Our best dairy companies know that they have the wind at their backs. A perfect storm of declining domestic production (despite milk prices of around 50c/l), 13pc annual consumption growth and a paranoia about the safety of local produce has left dairy exporters into China free to command what can only be described as extortionate rates for their produce.
UHT milk is a good example. While logic tells us that shipping a litre of what is effectively 90pc water halfway around the world is inefficient, it misses the crucial dynamic that is driving the Chinese dairy market at the moment.
Wave after wave of food scandals have severely damaged confidence among the Chinese in their local brands. Melamine was the mother of all scandals, with many believing that the official statistic of six infant deaths from the widespread contamination of milk with industrial protein is a gross under-estimation of the real death toll.