Fruit growers are fruit growers all around the world — so goes the saying.
The sheer scale of production and increasing exports from Asia, however, is starting to dominate the global fruit trade.
Its influence will only continue to grow in the forthcoming years, and, while the role of the U.S. to date has been rapidly increasing in the development of these markets, the likes of Chile, New Zealand and Australia have all also been active in them for more than 10 years.
The U.S. does import from some of these countries — notably Thailand and India — and U.S. exports (especially apples, grapes, pears, cherries and citrus) have been growing impressively.
In the future, we are likely to see more fruit imported into the U.S. from a diverse range of Asian markets.
It might well be, though, that the relationship with the U.S. is not just a supplier/buyer of physical product, but also as a source of expertise and technology to Asia. Even here, the U.S. will find it a demanding and highly competitive market.
The development of the fruit sector in Asia has traditionally revolved around what happens in the likes of India and China, which totally dominate at the big-picture level.
What is starting to happen in the rest of the region is also highly impressive.
Production in a whole range of countries such as Indonesia, Malaysia, the Philippines, Vietnam and Thailand is beginning to show dynamic growth.
Even countries such as Myanmar, previously an essentially closed market after years of military dictatorship, has started to open up.
Exports across the region are also starting to develop.
While these have traditionally been focused on neighboring local markets, a wider range of export markets will be supplied in the future. These will take into account long distance markets such as the European Union and the U.S.
One of the key features of the development of the supply chain in Asia is the rise of modern forms of retailing.
In India, this accounts for only 5% of the market at the moment, but in China it is already around 25% and growing fast. The Pacific Rim markets such as South Korea and Taiwan are also seeing the rapid growth of more modern forms of retailing.
There will be niche opportunities for the U.S. in higher added-value food products in markets such as Hong Kong and Singapore.
That is not to say there are no other opportunities for the U.S. supply chain to profit from the huge macroeconomic growth being seen in Asia. Far from it, in fact.
U.S. retailers, for example, led by Wal-Mart, are already eyeing the future potential of these markets.
Everything appears difficult, but the adage that, at the same time, nothing is impossible, is never truer than in Asia.
Legal systems, distribution and logistics, finding good people, keeping good people, respect for IP systems, financial arrangements and understanding consumer behavior and culture can be challenging in any market.
In Asia, they are especially difficult, but the size of the prize is large and tempting. It can only be accessed by having a genuine long-term yet flexible view. Asia is no place for the short-termer.
As export and organized modern urban retail markets develop in Asia, there will also be an increased need for high-class traceability, accreditation and food safety systems, supply chain logistics, environmental technologies, CSR strategy, innovation and processing technology.
This is where the U.S. is inherently strong.
A foreign education is highly valued in Asia. Many U.S. agri-food universities and colleges are already actively marketing and recruiting in Asia.
The U.S. is not alone, though, in wanting to export knowledge based services to Asia. Many others in the likes of the United Kingdom, Canada, New Zealand and Australia would like a slice of the action too, as will others in the EU, such as the Netherlands and France.
Asia’s growing influence on world produce and other agri-food markets presents an opportunity and a challenge to the U.S. industry.
The U.S. is already interlinked to Asia in terms of economic recovery. Asia is poised to supply more produce, fresh and processed, to international markets.
The U.S., and to some extent the EU, might have not been the top priority to date as opposed to other regional Asian markets. It is, however, only a matter of time before the U.S., in its full scope of horticultural activity and expertise, comes much more strongly onto the Asian radar.
John Giles is a divisional director with Promar International, an agri-food supply and demand chain consulting company and a subsidiary of Genus PLC, Basingstoke, England. He is also chairman of the Food, Drink & Agriculture Group of the Chartered Institute of Marketing. He can be reached at firstname.lastname@example.org.
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