As the popularity of cherries continues to blossom in China, investors from the Middle Kingdom are hand-picking Australian farms to shore up supply. With a positive season expected for this Southern Hemisphere summer, www.freshfruitportal.com catches up with top industry representatives who welcome the Chinese marketing approach and the possibilities it represents.

Scott Coupland from the New South Wales (NSW) Cherry Growers Association has noticed a lot of talk in China about Australian grown cherries, with producers responding well to the heightened interest.

"We pick the fruit mid-November and always have it into mainland China market before Christmas, and definitely before Chinese New Year," he says.

He says Chinese investors have been coming to his state's cherry-growing hub of Young in a bid to secure supply. While investors have also put money down on farms in high-volume cherry competitor Chile, the mostly seafreight fruit from South America is already 40 days' old by the time it reaches consumers.

In contrast, Australia's competitive edge comes from airfreighting fresher, premium quality cherries.

"They [the Chinese] have food security concerns but they won't secure enough to fulfill their demand in China," Coupland says.

"I think there are quite a few growers who would be happy to have partnerships and investment in their horticulture because it's capital intensive.

"So part-shares in farms, partnerships with Chinese investors are attractive because it allows equity for new technology."

He says the new investors in Young employ local knowledge and people, use local networks and are integrating into the community.

"It’s a breath of fresh air. They they are exposing the local growers to a more global business mindset.

"Local growers have had a strong focus on the domestic market. Eyes are opening to a new market out there; it's a big one and needs new sales ideas, new ways of marketing, a 'whole' supply chain approach to supply lines in Hong Kong, with new packaging and distribution logistics.

"The Chinese will pack and market their own fruit from the 50 acres of orchards they now own, but they will also buy from me and other growers. What's new is that there hasn't been anyone doing this in the cherry industry in mainland Australia. They'll take our local knowledge back to manufacturers in China. The Taiwanese might follow and want a slice of the pie in our district too.

Coupland adds a greater focus on China will bring about changes in the type of product Australian growers sell.

"There will be less varieties but more trees of each variety we grow. Chinese investors will look at what we grow well. About 50% of our Young district production is a big, dark, hard and sweet cherry that the Chinese market favors," he says.

Tasmania-based Reid Fruits marketing and business development manager Lucy Gregg, says overseas investment makes sense when it means purchasing established orchards rather than buying land and starting from scratch.

"That allows market entrance straight away and gives a return-on-investment straight away," she says.

"The demand for cherries is consumer driven; Asia's consumers having a good socio-economic situation.

"The opportunities for Australian growers are that there could be access to capital for orchard expansion. It does help to have some investment into the business."

An investors' view

One company that has invested in Young's cherry sector is Top Choice International, which has so far bought two orchards in the area this year.

"I can't say whether it’s a success yet. It's a challenge. I like the country life. It's why I invested in the orchard," says Brian Chen, a Chinese national who is heading up Top Choice's Australian export program.

"I've worked closely with the growers and I’ve become a grower myself. In the future I will definitely be buying more cherries from other growers."

Chen is confident there are opportunities in Asia for Australian cherry growers to expand their businesses.

"You can’t occupy the whole market. I’m interested in my own business and growing it and working to improve business opportunities outside of Australia," he says.

"But I’ve observed the local knowledge closely and I think Australian growers are opening up to a mindset that is focused on more than just the domestic market.

Coupland echoes Chen's comments, with the belief that an oversupplied domestic market will smarten up.

"What we're going to find is the price will go up a bit, which will be good because supermarkets here drive the price down. We’ve had inefficiencies and waste in the past, across the whole supply chain," he says.

"Supermarkets and all distributors will be forced to look at their own margins and at the way they distribute and market the product now. The whole industry, even growers, will try to improve."

Chen believes this situation gives growers more choice.

"In the future I think growers will prefer to sell to the global market. I will make the price higher for growers in leaner years so that as a grower community we can reduce our losses if we work together," he says.

"In times of poor crops, when there is less volume and when growers raise the price from AUD$55 (US$47.95) a box to AUD$70 (US$61) for example, I’ll raise it to AUD$80 (US$69.75) because we have more customers in the Asian market who are willing to pay for quality fruit.

"I want to try to improve my relationship with the growing industry for the long term because I’m an exporter but now a grower as well."

Distribution and protocols

Looking ahead, Asia’s appetite for fresh quality fruit may see further investment in the industry through partnerships with wholesalers who have a ready network in place for distribution.

Coupland explains efforts are already underway to learn more about widening distribution through partnerships.

"In China's Shandong province we go over and look at the cherry growing industry there, and we've been to Turkey as well.

"We see growers in Turkey that market their product throughout all of Europe. We have to ask ourselves the question: Is it best for us to find a marketer? Is there a grower in China or someone there with a network already in place?"

Overall export volume is likely to grow in the upcoming campaign, but Cherry Growers Australia CEO Simon Boughey says the sector still faces protocol issues.

"We’ve had lots of enquiries in relation to getting quantities," he says.

"A biosecurity management program for protocol markets such as China means a focus on airfreight. Chile has some of their fruit on the water for 30 days.

"The quality of fruit from Australia is the highest in the world. We need to keep working with the federal government to get a more commercial protocol to export to China."

Photo: www.shutterstock.com

www.freshfruitportal.com