Despite Canada’s tortured relationship with China, the giant market still holds enormous opportunity for Canadian agriculture, says Doug Horner.
“We are still going to see significant growth in demand coming from China,” said Horner, the former Alberta agriculture minister who now heads the Canada China Synergy Group, which advises Canadian companies on how to approach the Chinese market.
“The opportunities for us are very, very large in China.”
Horner sees the Chinese consumer developing a greater hunger for the sorts of food products Alberta produces, but encouraged people watching a University of Calgary School of Public Policy presentation and discussion to learn what the Chinese consumer wants.
“We can’t move to value-added unless we understand what the customer wants us to move to,” said Horner.
“We have to understand how they’re going to buy it and how they’re going to use it…. It’s getting them to draw your product versus trying to push your product.”
Canadian exporters might have become skeptical about the future of sales to China due to a long-standing diplomatic dispute and China’s seemingly linked actions against Canadian canola, pork and beef.
But Horner pointed out that Canadian exports of many products are surging despite the dispute, including ones earlier affected. Canada’s political relationship might be strained, but business is still possible.
“It’s going to take a long time to repair (the relationship), but that doesn’t mean business and exports aren’t going to happen.”
Not only has China developed a prosperous middle class, but its millennial generation is 350 million strong and hungry for the sorts of foods that are popular with millennials here.
They buy much or even most of their food online. They like packaged ready-to-eat meals. They like ready-to-cook meals. They like health food.
“Those 350 million millennials are the market for Alberta’s agriculture in the future,” said Horner.
China’s government is clearly in control of Chinese society and its economy, but it is happy to see people continue to get richer and assume a taste for what were formerly seen as luxuries — as long as they don’t mess with government imperatives.
“They’re probably more capitalist than we are. They are more materialistic than we are,” he said, describing Chinese consumers.
But when planning to make sales to China, Canadian processors need to understand what Chinese consumers want and how they want to get it.
“You can’t sell a 10-ounce steak that you think somebody is going to barbecue to somebody who doesn’t have a barbecue and has no idea how to cook a 10-ounce steak,” said Horner.
“You have to think about what does the consumer’s plate look like over there versus here.”
When it comes to selling agricultural production goods or services to China, Horner was more cautious. Protecting intellectual property is a serious concern for Canadian companies trying to operate in China, he said.
And while the Chinese once believed they needed expertise from places like Canada to develop their hog, poultry and dairy industries, they now believe they have enough knowledge within China.
In terms of what China needs most, it’s probably expertise with land and water reclamation because so much of China’s environment has been polluted by earlier development.
For exporters, understanding China first and exporting next makes sense since it is truly unique.
“This is not the same market as selling into the United States, into California or New York or into Quebec or Ontario,” said Horner.
“This market is definitely different.”