French regional food in China is Booming

Household consumption is picking up in France, but some food producers are not satisfied with it. They are therefore looking for new outlets in more promising markets. This is especially the case of French producers and suppliers of regional food (or product du terroir in French). This category of products has neither proper definition nor official label, but it represents the food specificities from each region of France. With an emerging middle class of more than 110 million of potential consumers at the end of 2015, China is a dream for many entrepreneurs. It has even become one of the favorite destination for French regional food exports.

Champagne, wine and foie gras, the three local products the most appreciated in China

Indeed, numerous producers are exporting French food and beverage like wine, champagne, raw meat delicatessen, sweet grocery products and milk products to China. But some category of products is more successful than others. For instance, the two French producers of wine and spirits, LVMH and Pernod Ricard, were able to grasp around 70% of the champagne market share in 2013. Even though sales of champagne lowered with the anti-corruption campaign launched at the end of 2012 by the Chinese government, their annual average growth rate could still reach 22.7% for the period 2014 – 2019, a study from the specialized website Mon Viti reports. Moreover, champagne is benefiting from a 2013 governmental policy that exclusively recognizes the title of “champagne” to the sparkling wines produced in the French Champagne region. This system helped to clearly differentiate Chinese wines from “authentic” champagne and therefore strengthen the latter.

Just beside champagne bottles on stores’ shelves, Chinese consumers can also find a great variety of French wine, which is becoming a more and more popular drink.  Since 2014, China is France’s third customer for this product: according to Business France, 95% of French wine exported (in value) to China is red wine, and 71% bears the label “Appellation d’Origine Protégée” (AOP) which protects the origin of the products. In China, a bottle of imported wine out of two comes from France. More precisely, wines from Bordeaux, Languedoc-Roussillon, Bourgogne and Côtes-du-Rhône can be found. But if French wine exports are doing well, brands are facing an enhanced competition from local producers and especially those coming from the wine-growing holding region of Ningxia (宁夏) in the North of China.

Going hand in hand with wine, French raw meat delicatessen is also trying to break into the Chinese market. For the company Delpeyrat which obtained in March 2015 an export approval for its dry-cured ham, China represents a significant outlet. The producer implanted in the South West Périgord region hopes to sell some 50,000 pieces in the year. In the category of products made from meat, the duck meat dish foie gras surpassed raw meat delicatessen in conquering the Chinese market. The enthusiasm of consumers for this product is such that in 2014, the cooperative Euralis launched the construction of a plant covering the whole chain of production of foie gras, with a capacity of 500,000 ducks to be grown in 2017 and twice that amount in 2020, explains its CEO to the newspaper Les Echos. But here again, the competition of Chinese products is broadly established: the group Jilin Zhenfang alone gathers half of the market shares by selling its production to private households, while French producers mainly target restaurants.

Numerous administrative and cultural obstacles remain, preventing a massive arrival of regional products in China

Accessing the Chinese market and its consumers are not easy for French regional food. Beyond the success of some star products quoted before, there exist many obstacles, among which the regulation of food product imports in China. For instance, some products which contain pork must obtain an export approval that can be very long to receive. This was the case for dry sausage exports until the producer Salaisons et conserves du Rouergue (SACOR) obtained the approval just a year ago. The familial enterprise based in the South East Aveyron region is the first French company to be allowed to export sausages in China.

To face administrative difficulties and provide advice in such complicated situation, different structures were created, that gather small producers. Since 2012, theMaisons Sud Ouest France (MSO, or in English, “South West France Houses”) sell products that are certified by a French label for quality in brick and mortar stores in China. Chen Di Partners has the same objective. In 2013, the company launched the challenge “Best of Origin” for the regions Midi-Pyrénées and Aquitaine, with the goal of commercializing products from three hundred French middle and small enterprises in China within two years. To complete the offer of MSO and to better promote local French food on the Chinese territory, Chen Di Partners associated with the Chinese e-commerce group Beexi and created an online dedicated shop, beexibox.com. However, despite the efforts of the MSO “90% of South West French products are not exportable”, deplores the MSO coordinator Magali Bladier in an interview to La Chine au présent.

Finally, the last obstacle adds up to these regulation problems: the taste. A significant part of French regional food is unknown from Chinese consumers and learning to appreciate these products will take them time. For French producers willing to export, this requires a great marketing effort. “Integrated exportation” is one of the solutions that has been adopted by foie gras makers and which consists in associating French products with typical Chinese recipes.

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