A promising but challenging market
Imitation may be a form of flattery, but Canada’s seafood importers are not impressed by competitors using their national brand in China.
Poor enforcement of labeling laws is one of the main obstacles preventing Canada from increasing seafood sales in China, according to Maggie Xu, trade commissioner for seafood at the Agriculture and Food Trade Commissioner Service based in the Canadian embassy in Beijing. Xu said Canadian seafood imports face “lower quality seafood products from other sources claiming to be Canadian when they are not, which is damaging the high-quality reputation of Canadian products and misleading consumers.”
The fact that genuine Canadian product faces “fierce” competition from Chinese and international suppliers like Chile and the United States makes the problem even more serious. Quality differentiation is therefore “more important than ever” for Canada, whose top three product categories in China are crabs (live and frozen), shrimp and lobster (live and frozen). Canadian seafood imports to China are valued at approximately USD 3 billion annually.
While domestic food-safety scandals mean imported food enjoys prestige in China, importers keen to promote a national brand have experienced troubles. New Zealand struggles to distinguish itself in leveraging a reputation for fresh, clean product, according to Scott Brown, head of Shanghai-based advisory Redfern Chinese, which advises New Zealand seafood exporters. Lobsters from New Zealand command a premium price but are often sold as Australian due to a lack of awareness among distributors in China.
Other cases of mislabeling can be inadvertent — New Zealand catch offloaded at Vietnamese ports, for example, makes its way to China as Vietnamese product, he explained.
Brown nonetheless sees it as vital that New Zealand emphasizes “points of difference” to capture more of what’s been a “very good and successful business with good margins.” Though China buys more than 10 percent of the country’s seafood exports, the figure hasn’t reached it potential due to a lack of coordination among companies, said Brown.
“This has meant a weak positioning of the New Zealand brand here,” he explained.
Brown sees live imports as a silver bullet, if unorthodox, way to edge the competition in non-crustacean fish.
“Live fish can command five times the price, yet only Russia and North Korea are currently importing live,” he said. They could be hibernated, he added. “Swim them in. We have to take the seasonality out of it.”
Despite battling misleading labeling, Canada’s seafood promotion team working out of its Beijing embassy drive sales by seeking out Chinese partners for Canadian firms and troubleshooting regulatory issues, such as often-changing import regulations set by the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).
A key challenge for Canada in promoting sales beyond core cities is cold-chain logistics in central and other inland provinces, which “is not very well-developed yet so it can affect the quality of the product during transport,” said Xu.
Xu’s office targets high-end restaurants and hotels in Beijing and Shanghai and key seafood trade centers like Dalian, teaching local chefs to use Canadian ingredients. Chefs nationwide have meanwhile been supplied with a Mandarin language seafood cookbook with Chinese celebrity chefs using Canadian seafood in creations like Fragrant Green Tea Geoduck and Lobster Inspired by the Three Plum Flower Stories.