Loren Zhao Fresh Bridge Supply Chain

Loren Zhao, Fresh Bridge Supply Chain

During this week’s Asia Briefing: Avocados, a special webinar produced by Fruitnet for Asia Fruit Logistica, Loren Zhao of Fresh Bridge Supply Chain took part in a live Q&A hosted by Asiafruit editor John Hey. Below is a transcript of the interview.

Welcome Loren, please can you begin by introducing your company and giving us an overview of what you do?

Loren Zhao: Hi John, I am the co-founder of fruitday.com and the founder of Fresh Bridge Supply Chain in China now. The supply chain business is to help to connect growers with customers in China with professional services.

China is of course a hot-spot for avocado demand in Asia, and one that many suppliers are pinning their hopes on, right?

LZ: Yes. That's why we also invested in Avocado ripening system in Shanghai.

Your company has been doing quite a lot of innovative work in the avocado field. Can you give us a brief overview of some of its core activities?

LZ: Fresh Bridge started offering avocado ripening services at the end of 2019. We started with ripening for our own demand, and also providing the service for avocado exporters and growers from New Zealand, Peru and Chile. Recently, we also saw strong demand from our local avocado growers from Yunnan.

Loren, while China is a rapidly emerging market for avocados, it did not perform so well last year. To what do you attribute this trend?

LZ: There were maybe many reasons that caused this performance last year. But from the customer's view, I think most the fact that Chinese consumers cannot purchase an avocado in the right situation was one of the main reasons.

It seems pre-ripened and ready-to-eat avocados are key to growing consumption in China, but this market has been slow to take off. Why is that?

LZ: China is a big market with huge potential for avocados. But the taste behaviour needs time to build. Around 6-7 years ago the market enjoyed a fast start. But the consumers realise the fruit is not a traditional fruit to eat separately, but as a food. The traditional Chinese food needs time to accept avocado into it.

Loren, in the Asia Briefing: Avocados video, Paulina Theologou from Westfalia mentioned that smaller-size avocados are more in demand in China/Asia. Is that your experience too?

LZ: Yes. The main reason is smaller avocados have a lower average price on e-commerce platforms. So that will attract more new consumers to purchase for the first time.

One of the key aspects of growing a category is understanding the target consumer. What is known currently about Chinese consumers when it comes to avocados?

LZ: As we know, avocado consumers are mostly the younger generation, especially younger than 45 years old. Other key consumers are housewives or parents who purchase for their kids, because they believe the nutrition and benefit of avocados are good for babies and kids.

Do any traditional Chinese dishes include avocado? Or if not – what new avo-based dishes are becoming more popular?

LZ: We haven’t seen much happening so far [in this area]. Maybe we should try to put avocado into a spicy hotpot next time! Most of the promotions in China are based on western style. I hope we can involve more Chinese food chefs in promotions in the future.

How important is it to do just that, to integrate avocados into Chinese cuisine and diets – for instance hot food in winter – rather than blindly copying Western-style menus?

LZ: Chinese food is different to western-style food. Especially during winter time in north china, consumers like to eat hot foods the whole day. So far, avocados have mostly been introduced to China to eat with soybean sauce or wasabi. I think this has limited consumer purchases in cold weather. We learned from Japan that avocados were introduced to many Japanese restaurants, and this is something we need to do with our Chinese food in the future.

Is Hass the right variety for the Chinese consumer, or could a different type have much more potential in the future?

LZ: Hass still dominates the market now. I believe there will be new variety in the future that can compete with Hass if it has longer shelf-life, better taste and good quality. So far, however, Hass is still the dominant variety in China.

Has Covid-19 changed consumers' purchasing power or habits when it comes to buying premium avocados?

LZ: More than half of the avocados [sold in China] were sold to food and beverage channels. Covid-19 affected the consuming power of restaurants and hotels, and most consumers got to like avocados in restaurants and while travelling, So Covid-19 will also slow the [fruit’s] introduction.

We've talked quite a bit about the consumer market. Let's look at the supply situation for avocados in China now. Mexico, Chile and Peru are the country’s main suppliers of imported avocados. How are they performing and do you expect them to continue to dominate the market?

LZ: Chile and Peru were growing very fast in the past few years. They have helped to lower the retail price of avocados, and also helped Chinese consumers to purchase avocados 12 months a year. But other countries will be ready for the market soon, for example Colombia, South Africa, Kenya and so on. They export the same Hass variety, so it will be difficult to maintain the market share in the future.

Interesting. We heard in the Asia Briefing episode how important year-round supply is to developing demand. Are you seeing a consistent year-round supply now?

LZ: Yes. And China is also starting to grow local avocados in Yunnan now.

How is China's domestic avocado production developing? What do you see as the key opportunities and challenges?

LZ: Local production of avocados has increased a lot recently due to the higher return and local government financial support. The local avocados don't need ocean shipment, so they have a short delivery time from orchard to customers. But we still need to help them to learn about post-harvest and growing techniques. So far, we haven’t seen local avocados that can compete with imported fruits in terms of quality.

How important is China's domestic production in developing the avocado category overall? And what will it mean for imported avocados?

LZ: The local production area is mainly in Yunnan, in the south-west of China. I don't know the production numbers but I have heard that the volume will be more and more in the near future. The retail price we saw recently on Tmall is only 50 per cent of that for imported avocados. It will be good to introduce avocados to tier-three, -four and -five cities consumers.

As we all know, China’s fresh retail channels are expanding rapidly to the south and west of the country, with Pingduoduo, Meituan, Didi and Alibaba. Local avocado production will be a new weapon for the new e-commerce players for sure.

We also heard about those newer suppliers you mentioned, including Colombia and New Zealand. Indeed, you work closely with Darling Group in NZ. How do you see the prospects for those supplier countries?

LZ: New Zealand exports a small volume but good quality to China. We have been working with Darling Group for many years and are glad to keep working with them on avocados. Their products are known to consumers with bigger sizes and higher oil rates, and this helps us to target premium channels in China.

In addition to basic storage, repacking and ripening services, we are also helping them to build an online social media [following] via Tiktok, Bilibili and other channels in China. As a new-style service provider, Fresh Bridge is exploring the opportunity to connect brands with consumers in this way.

So do you still see good prospects to grow the market for 'premium' avocados post-Covid?

LZ: Yes. Chinese consumers are still willing to pay for premium products. For example, we can learn from Zespri and Driscoll’s’ success in China.

Loren, many thanks indeed for joining us today for this live Q&A. We really appreciate you sharing all your excellent insights on Asia Briefing: Avocados. And we wish you every success with your innovative work to develop the avocado market in China!

LZ: Thank you, John. I hope we can do something new here for China and the international avocado industry.

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