Asian Citrus, China's largest orange plantation owner, is readying to launch high-value, freshly squeezed orange juice for wealthier Chinese consumers happy to spend more on convenient food products. The company has already started producing small volumes of juice and will test the product in Hong Kong and Guangdong region in 2007.
Like many food and beverage producers, Asian Citrus is closely watching the rapid rise in incomes in China, and looking forward to what is predicted to become the world's third largest consumer market by 2025. By this time, 59 per cent of Chinese will live in cities and aggregate urban disposable income will have soared to CNY22.6 trillion up from 4.8 trillion in 2005.
The juice market has already seen rapid growth in recent years but much of the juice consumed in China is still made from imported concentrate and mixed into juice drinks. Asian Citrus wants to develop a market for premium, freshly squeezed juice "like the kind available in Starbucks".
The group already has four species in its first plantation and will add a fifth when the second plantation starts bearing fruit next year. This will give it a larger base to adapt its juices to different tastes.
The company will initially outsource production to a small factory but if the premium juice takes off, it is likely to invest in its own plant for production of the more complex, not-from-concentrate juice such as that produced under the Tropicana brand. NFC juice can be stored for nine months to a year but requires much more advanced technology.
In the meantime, the group will be concentrating on upping its sales to supermarkets. Asian Citrus has exploited its size - although it only accounted for 2.5 per cent of all oranges produced in China last year, it is still the country's largest plantation - to improve its bargaining power with supermarkets. This year it doubled its sales to supermarkets, to 20 per cent of its total volumes, allowing it to increase profits on higher selling prices.
When the company sells directly to supermarkets it achieves 15 per cent more in profits, adding the gains typically made by a wholesaler to the farmer's/grower's profit.
Orange consumption among the Chinese population was only 3kg per capita in 2002-03 compared with more than 30kg in Europe and the US. A large part of the higher orange consumption in western markets is down to the juice intake - the Chinese only consume 0.1 liters per capita compared with 18.5 liters in North America.
Source:佚名