CHANGE
New Zealand’s horticultural sector will need to keep a close eye on the role
sustainability attributes play in the purchasing decisions of Chinese consumers
if it is to maximise returns from the rapidly-growing Chinese fruit and vegetable
market, Rabobank’s senior horticultural analyst Hayden Higgins says.
While food safety,
quality and nutrition
credentials are the
most significant
factors influencing Chinese
consumers’ food purchasing
decisions, awareness of other
product characteristics - including
sustainability attributes such
as water usage and emissions
- is growing. Chinese consumers
are looking for food products
which are high quality, nutritious
and have strong food safety
credentials - and New Zealand’s
fruit and vegetable producers have
been able to command a price
premium in the Chinese market by
supplying products which possess
these attributes. While China has
historically shown little interest
in point-of-origin sustainability
attributes if the product comes
from outside of China, we are
starting to see some changes in
this area with Chinese consumers
becoming increasingly aware of
wider sustainability issues. It will be
vital for New Zealand’s horticultural
sector to keep abreast of Chinese
consumer views on sustainability
issues, such as water usage and
pollution. The sector will be wise
to monitor this situation carefully,
as we expect to see point-of-origin
sustainability attributes become
increasingly relevant in the Chinese
market. A strong knowledge of
78 SEPTEMBER 2018
CONSUMERS
consumer trends in the Chinese
market is essential for New Zealand
producers, given it is New Zealand’s
largest single export destination
for horticultural products. And
while the US and EU markets
are the biggest global importers
of fresh fruit and vegetables,
the Chinese market is by far the
quickest growing. During the
period between 2010 and 2017,
we’ve seen New Zealand fruit and
vegetable exports to China increase
in value by almost $400 million
dollars. China is now the most
significant market for New Zealand
fruit and vegetables by size,
growth potential and proximity and,
accordingly, we’d expect to see the
New Zealand horticultural sector
continue to place a strong emphasis
on developing further growth
opportunities in this market. China
had made moves in recent years
to address some of its own natural
resourcing challenges, increasing
awareness of sustainability issues
among Chinese consumers.
The Chinese government has
undertaken a range of initiatives
to tackle water and environmental
issues, increase regulation of
food standards and look towards
reducing greenhouse gas
emissions. These measures have
increased consumers’ knowledge
of broader sustainability issues, and
this has led to greater awareness
CHINESE
of sustainability attributes in food
products. A recent Agricultural
Economic Research Unit (AERU)
study looking at the purchasing
decisions of kiwifruit shoppers in
Shanghai found consumers are
now indicating a willingness to
pay more for kiwifruit possessing
sustainability attributes. The survey
found respondents indicated they
were willing to pay considerably
more than the average per kilogram
price for kiwifruit produced in New
Zealand. Sustainability attributes
were also found to be important
to consumers, with respondents
indicating a willingness to pay more
for kiwifruit produced responsibly
and with a focus on lowering
pollution, reducing water utilisation
and minimising GHG (greenhouse
gas) emissions. While the findings
of this survey, and others in the
Chinese market, suggest there is
a willingness to pay a premium
for the sustainability attributes of
kiwifruit and other fruit and vege
products, intentions do not always
correlate into actions. Consumers
may be positively interested in
sustainability attributes, but neutral
when it comes to actions and, as
yet, there is little evidence out of
China to suggest consumers are
actually paying higher prices for
these attributes. Despite this, the
bank’s view is that awareness
of sustainability attributes will
continue to grow and play an
increasingly significant role in
Chinese consumers’ decision
making. New Zealand brands
currently have a strong reputation
and a high level of trust in the
Chinese market and it’s our view
that supportable sustainability
credentials will be key in
maintaining and strengthening this
trust with Chinese consumers.
Brands that hold, or develop, strong
sustainability characteristics have
a strong future and New Zealand
producers should prepare and
position themselves in the Chinese
market accordingly. While New
Zealand producers could learn from
sustainability developments in
other markets, it is important that
any positioning for sustainability
be market specific, not generic.
We’ve seen sustainability attributes
become more and more prominent
in several other markets around
the world and New Zealand
producers can certainly learn from
developments in these markets.
However, it will be crucial that
any positioning developed for
the Chinese market is focused
on the specific attributes that are
important to Chinese consumers.
Rabobank New Zealand - part of
the global Rabobank Group, the
world’s leading specialist in food
and agribusiness banking – has
32 branches in New Zealand.