About 10 years ago, an unscrupulous importer taught the F.C. Bloxom produce company a pricey lesson about the hazards of doing business in China.
After paying for multiple shipments, the importer unexpectedly stiffed the Seattle-based distributor for $180,000 and skipped town to avoid legal consequences, said Antonio Esteves, its export director.
The experience didn’t entirely sour F.C. Bloxom on the Chinese market, but the firm is now more wary about potential customers.
“We are trying to be more careful,” Esteves said.
As part of that cautiousness, the company recently sought out new Chinese buyers for fruits and vegetables during an inbound trade mission organized by the state agricultural departments of Oregon and Idaho, as well as the Western U.S. Agricultural Trade Association, or WUSATA.
“At least we have a good start, because they do some due diligence,” said Esteves.
Representatives of six Chinese food companies recently arrived in the U.S. to tour farms and food processors in Oregon and Idaho from Aug. 4-7.
The Chinese firms were investigated by the USDA’s Foreign Agricultural Service as well as a contractor hired by WUSATA, a non-profit that’s funded by the federal agency.
“We check out the track record. We do our best to vet them before we ever bring them over,” said Andy Anderson, WUSATA’s executive director.
Aside from providing Northwest food producers with a measure of security, the trade mission allowed them to present their products to multiple Chinese buyers at once.
“Chinese business people generally want that face-to face. This is the way to do it,” said Aaron Foster, who handles technology and sales for All Berry & Fruits, which sells a variety of dried, frozen and puree products.
Inbound trade missions are usually the first step in a business relationship and are intended to facilitate introductions rather than sales transactions, said Theresa Yoshioka, international trade manager for the Oregon Department of Agriculture.
Once a Northwest company makes that initial contact, they’re encouraged to participate in an outbound trade mission to demonstrate a commitment to the market, she said.
“That really moves the relationship forward and gets you much closer to a purchase,” Yoshioka said.
Reliability is a major concern for Chinese buyers, who want to be assured that U.S. partners can provide them with a steady flow of product.
Price and quality are prime considerations, but distributors in China also don’t want to frequently replace suppliers in the U.S., said Henry Chen, vice manager of Guangzhou Yangchen Food Co., a large distributor in southern China, through an interpreter.
American products compete with those from Europe, Australia and New Zealand, as Chinese consumers generally consider foreign goods to be of high quality, he said. “People can tell the flavor.”
Jerry Liu, brand manager for the Sinodis food distributor, also cited supplier consistency as a top priority for his company.
Sinodis is looking for partners that are large enough to ship directly — not through a broker — and have a constant volume of goods available, he said.
However, the firm doesn’t preclude working with smaller producers, since major U.S. food manufacturers are often too inflexible to supply the China market, Liu said.
Major brands often aren’t willing to change their labels and meet other requirements unless they’re assured of a quick payoff within the first few years, he said.
“Usually, that’s not the case. You have to really develop the market first,” Liu said.
In China, the U.S. food industry is well known for its jams, chips and cream cheese, he said.
These goods are most famous in “tier one” cities, such as Beijing and Shanghai, with the highest population of affluent shoppers, he said.
More recently, though, food distributors have introduced foreign foods to “tier two” cities, which are smaller but where people are also trying to improve their lifestyles, Liu said.
While foreign foods are seen as superior, Chinese consumers aren’t aware of regional differences within countries.
“They really don’t have an opinion as to a specific part of the U.S. or Europe.”
