An Australian organic dairy business is seeing big potential with its exports to China, writes Sophie Loras.
Headquartered in Country Victoria, True Organic was formed in 2002 by the Organic Dairy Farmers of Australia and today represents a Co-operative of Certified Organic Dairy Farmers of Australia who collectively supply 70 percent of all Australian certified organic milk.
The co-operative has been exporting to Asia for the past three years – leading with the Singapore and Hong Kong markets and followed by Malaysia, Thailand, the Philippines, Indonesia and Brunei. True Organic made its first foray into the mainland Chinese market 18 months ago and has already seen export volumes increase by 50 percent in its first year. It expects sales in China to double in the next 12 months.
True Organic products currently available in China include its long life milk and Gouda, Edam, cheddar, mozzarella and pecorino cheeses and most recently, retail packs of milk powder, sold in around 100 stores across China – predominantly in Beijing through the April Gourmet and Jenny Lou supermarket chains and City Super in Shanghai.
True Organic’s General Manager, Bruce Symons, says the company’s distribution partners have helped make the route to exporting to China relatively smooth.
The company has also received additional support from Australian government organizations particularly the Victorian government which organized three trade missions and exhibitions to China throughout 2010 off the back of Expo.
Mr Symons says he also hopes to explore some of China’s second-tier cities, including Tianjin and Wuhan, through future Victorian-led missions.
While True Organic is fully certified organic in Australia, the business is still in the process of obtaining its Chinese organic certification and currently cannot carry an organic label in China. However the business anticipates sales in China to increase substantially once the full Chinese certification comes through.
Mr Symons says other Asian organics markets are not showing the same growth potential as China. He says in China, where there have been well documented incidences of products being added to milk, e.g. melamine, the idea of food safety and the benefits of organic products are more highly valued and better understood than other markets.
“We should be able to enjoy continued growth in China and expect it to be our biggest export market in the years to comes,” says Mr Symons. “Of all our export markets, China has the most potential,” he says.
“Everyone you talk to in China, every supermarket chain you visit, plans to grow retail stores by 20 percent to 30 percent in the next 12 months so if you get in there, and the supermarkets keep growing their stores and you are already in the distribution channel, then naturally, you hope your business will grow along with it,” says Mr Symons.
“China is an intoxicating market to be in because there’s just so much going on, and contrast that with Japan where there is no retail growth,” says Mr Symons.
“So in that respect it is exciting because everyone in China is in a strong growth stage and you can go along with it.”
Mr Symons’ advice to other Australian organic businesses looking at the China market is to visit regularly.
“Like any market, it’s big and complex and the more you visit the more you can make the right decisions – and that’s the same for whatever industry you are in, because everything is changing so quickly in China – you need to get in there and try to find out what’s going on.” ■
To learn more about the potential of China’s organics market, click here.
