Chinese firm plans to process re-fresh cod products for Shanghai retail
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Beiyang Jiamei Seafood, a Chinese processor switching its business from exports to imports, plans to expand into re-fresh products for the domestic market.
The company, which is based in Qingdao, hopes to start processing re-fresh, packaged cod products for retail in Shanghai early next year, said Peng Song, its general manager.
“We have in mind selling re-fresh cod and redfish. I think cod, both Atlantic and Pacific, can be very big in the Chinese market,” he told.
If this model works, it could then be applied in other Chinese cities, he said. “I think we would be the first company in China to do this,” he said, during the China Fisheries & Seafood Expo.
The company is also starting to sell frozen cod products into Chinese retail, wholesale and foodservice.
“For the big, longline Pacific cod, we cut it into steaks. For the Atlantic cod, we make loins, portions and J-cuts,” he said. “I do think this item will boom in China, in a very short time.”
Chinese in coastal cites do eat Pacific cod, he said, as the same species that is caught by Russians and American vessels is also in Chinese waters.
But, the species is not sold as “cod” and consumers are unfamiliar. “The catching is inconsistent, so people do not like to promote it. The species may not be new, but to name it Pacific cod, Atlantic cod, that is new,” he said.
The company is also putting the Marine Stewardship Council (MSC) logo on its cod retail bags.
“We now have most of our products MSC approved. I think that is the future,” said Song.
“The MSC is also fully traceable, from catch-to-plate. That is a powerful message for the Chinese consumer, who is worried about food safety,” he said.
“I think we would be the first company in China to do this,”
Promoting the traceability angle of the MSC logo is the best way to expand in the China market, he said, due to the concerns over food safety in China.
Shift to domestic sales
Beiyang Jiamei now generates around $35 million from domestic sales, as well as the same amount from re-processing and exporting.
For the re-processing business, cod, haddock and arrowtooth flounder are the main species, he said.
The company only started doing domestic sales in 2011. Beiyang Jiamei is selling into wholesale, into retail and foodservice, and also via online stores on JD.com and Tmall.
Beiyang Jiamei’s main brand is “Sea Mix”, but it also has another for families, “Dinosaurs”. Also, the company is launching a high-end brand, “Prime Catch”, for crab and other more expensive items.
A big focus of the domestic business, including e-commerce, is coldwater shrimp. Beiyang Jiamei imports around 5,000 metric tons of coldwater shrimp a year.
Due to the quota cuts for coldwater shrimp in Canada, the company is now importing more vannamei from Ecuador and also red shrimp from Argentina.
“We use coldwater shrimp to open the door to the supermarkets. Then, we try and introduce our other products to them. Coldwater shrimp will remain the most important item to us,” he said.
“Needless to say, the high prices of coldwater shrimp mean vannamei has taken a share of the market,” said Song.
“The price is RMB 91.50 ($13.53) per kilogram. This is the same price as L1 [Argentine shrimp] or 30/40 from Ecuador,” he said.
“In China, if you entertain a guest, you want the bigger size to create a good impression”, meaning the vannamei and Argentina shrimp has a strong appeal, he said.
Questions & Answers
Q.Which specific product category is Beiyang Jiamei Seafood focusing on for its new expansion into the Shanghai retail market?
Which specific product category is Beiyang Jiamei Seafood focusing on for its new expansion into the Shanghai retail market?
The company plans to start processing re-fresh, packaged cod products for retail in Shanghai. They specifically mentioned Atlantic and Pacific cod, and also redfish, as key items for this domestic market expansion.
Q.How does Beiyang Jiamei Seafood intend to address Chinese consumers' food safety concerns with its new retail products?
How does Beiyang Jiamei Seafood intend to address Chinese consumers' food safety concerns with its new retail products?
Beiyang Jiamei plans to put the Marine Stewardship Council (MSC) logo on its cod retail bags. The general manager stated that the MSC certification provides full traceability from catch-to-plate, which is a powerful message for consumers worried about food safety.
Q.What is Beiyang Jiamei Seafood's strategy for introducing new products into supermarkets?
What is Beiyang Jiamei Seafood's strategy for introducing new products into supermarkets?
The company uses coldwater shrimp to gain entry into supermarkets. Once established, they then try to introduce their other products to those retailers. Coldwater shrimp remains their most important item for this strategy.
Q.What is Beiyang Jiamei Seafood's current financial split between domestic sales and re-processing for export?
What is Beiyang Jiamei Seafood's current financial split between domestic sales and re-processing for export?
Beiyang Jiamei currently generates approximately $35 million from domestic sales. It also generates the same amount, $35 million, from its re-processing and exporting business, indicating an even split in revenue streams.