Microsession: The Asian Consumer Market

BY JOYCE REINGOLD, Produce Business

Thomas Reardon, Professor of International Development and Agribusiness/Food Industry at Michigan State University

Thomas Reardon, Professor of International Development and Agribusiness/Food Industry at Michigan State University

Asia’s rapid urbanization and increased consumption of produce are creating massive opportunities for exports and joint ventures, Thomas Reardon, professor of international development and agribusiness/food industry at Michigan State University, told industry leaders.

Conference-goers had two opportunities to hear insights from Reardon’s experience in Asian markets — first at Tuesday’s Global Trade Symposium, and on show day in the educational microsession, “Understanding Asian Consumers and their Produce Preferences and Shopping Behaviors.”

“The Asian market on the demand side has changed fundamentally and rapidly over a few decades. It’s gone from maybe 20 percent urban three or four decades ago, to 40 to 50 percent urban in population today,” he said. “Because so much has changed so quickly, that’s part of the opportunity. South Korea did the same change of urban share in 20 years that the United States did in 100.”

Reardon said produce has always been valued in Asia, but overall it was a small part of food expenditure. “Now it’s up to 16 percent. That’s an important number because it’s the same in the United States. The internal market of these 4 billion people has become giant quickly.”

Opportunities also come from increased taste for variety. “The product, and the form of products is changing,” said Reardon. “I visited China in 2003, and when I talked about blueberries and avocados, I drew blank stares. No one had heard of any of it. Now blueberries and avocadoes are very up-and-coming in China.”

Food system changes include the growth of supermarkets all over the region. “This has meant a real valuable method of introducing a lot of these products. Supermarkets are trying to emphasize diversity. They’re also reducing seasonality. They want to see blueberries on the shelf the whole year.”

And an improved supply chain is another draw. “The basic supply system that allows you to get stuff in and move it around, and also sell at the retail level, has changed fundamentally,” he said, particularly in South Korea and eastern China.

For those eyeing the Asian market, Reardon said there are a lot of potential partners — and competitors. “The Chileans are really going wild doing bilateral deals with China and South Korea, at the same time we’re hemming and hawing about whether we’re interested in free trade.”

With increased competition, Reardon says U.S. suppliers can no longer “waltz in saying our stuff is better, and safer.”

“The second wave of globalization, on the fruit and vegetable side, requires really studying the market and coming in with the right partner and product,” he said.