Fishy innovation – young Chinese food technologists knocking themselves out

After my recent post on innovative products based on Chinese vinegar designed by young food technologists, I am posting a similar blog about a contest for new fish-based foods. The contest has been organised by the National Engineering Research Centre of Seafood (Dalian, Liaoning). The assignment was again to create snacks, or in Chinese terms: leisure food.

First prize

Xianyousuoshu

xianyousuoshu

Fish meat wrapped in a mixture of mashed potatoes and minced shrimps and a little cheese. The name needs a some explanation. It is a pun on the Chinese expression xinyousuoshu, literally: ‘all hearts belong to someone’, meaning all people have someone they love. In the product name, xin ‘heart’ has been replaced by ‘xian’ fresh, umami, and shu ‘belonging’ to shu ‘potato’ (same sound, different character). So, the literal name translates in English like ‘umami belongs to potatoes’. If this product will ever make it to the shelves of overseas supermarkets, the producer will probably have to think of more palatable brand name.

Second prize

Millefeuille of squid

millefeuille

This is more or less literally what the name says: layers of dough with pieces of squid in-between.

Niyoubing

niyoubing

There we go again, a pun as a product name that poses a challenge for the translator. The name literally means something like: ‘you squid biscuit’. However, pronounced with different tones, you get an expressing meaning: ‘you are talking nonsense’. Great. The product is indeed a biscuit with squid flavour. According to the description it is both sweet and savoury.

Zunyushao

zunyuxiao

The name promises ‘baked trout’. According to the inventor, this product is based on an existing Japanese snack using sea bream. It also contains matsutake mushrooms and a again a little cheese to add a milky flavour.

Third prize

Fisherman’s Whorf cookies

fishwhorf

These are cookies with a fishy layer, but the description fails to mention the raw materials.

Home Bei

homebei

Home is written in Latin letters. The character bei refers to (shan)bei ‘scallops’. These are scallop flavoured potato crackers.

Yumizhixiang

fishpastefrag

The literal meaning of this name is ‘flavour of fish paste’, however zhi ‘of’ has been replaced with a homophone meaning ‘cheese’. The snacks are produced by steaming fish paste coated with cheese.

Haixian Yuanwuqu

yuanwuqu

This ‘seafood round dance’ uses rounds of squid, egg, scallops and crab meat as raw materials. According to the inventor, it this product should have a huge potential market. Who will give him an opportunity to test it out?

Fine trumpets

trumpets

In Chinese, laba ‘trumpet’ can also be used for objects with a wide mouth, hence the funny name for tartlets like these. The inspiration has come from a sweet Cantonese dim sum called ‘egg tart’, but uses whelk protein in the filling. It is positioned as a health snack by its inventor.

As with the vinegar-based products, the novel foods presented in this post give a valuable insight in the minds of young Chinese food technologists currently graduating and looking for jobs in the industry. I like these contests, so will post all of them, as they appear in the Chinese media.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975.

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New foods launched in China in 2015

Innovative product launches in China is one of my favourite themes in this blog. You can find lots of them in various posts. While we all know that China currently is the world’s largest growing market for food ingredients, both for exporting and sourcing, what is still less known is that no region on the globe sees so many new foods and drinks being launched as China. And innovation in end products is a major creator of demand for new ingredients.

In this last post of 2015, I have delved in the news items on new products that I have retained during my daily scanning of the news streams from China. Apparently, I believed these products were somehow worth saving. Well, I am presenting the to you, my readers, today. Please don’t feel obliged to like them as I did when I saved them. However, please also do not judge them too quickly as funny or useless. Instead, try to see them as reflections of how Chinese food technologists think about developing new foods, drinks, or ingredients.

An interesting finding, after arranging the novel products according to market segment, is that dairy company Mengniu stands out as China’s top food innovator of 2015.

As for time of launching, there seems to be no real favourite month or season for putting new products on the market. However, there are now launches found for the final quarter of 2015. Perhaps the winter blues are affecting food technologists in China.

Moving on to region, Beijing and Inner Mongolia come out on top with 3 launches each. However, all new products of the latter have been launched by one company: Mengniu. A distinctive feature of the new foods and drinks from Beijing is that most of them have been developed in cooperation with a research institute or university. Using the traditional Chinese division between North (of the Yangtze River) and South, nearly all (13 out of 15) of the novel products have been launched in the North. Considering that the home town of Mengniu, Huhhot, is located close to Beijing, as is Tianjin, then almost half (7) of the products have been developed within a large circle around Beijing.

I wish you all the best for 2016 and can assure you that new posts will appear here as frequently as in the year behind us.

Primary produce

Selenium strawberries

The Yegu Group (Beijing) has put the first batch of its selenium enriched strawberries on the market. The Yegu Group has been cooperating with the Beijing Bureau for Agriculture in the development of this product. Apart from the additional fortification with selenium, these strawberries are also produced biologically. High selenium fruits and vegetables are usually produced by adding selenium to the fertiliser, or growing them on selenium rich soil. (February)

Cereals and staples

Potato mantou – a revolution in Chinese staple food

In case you have forgotten what mantou are, please revisit my dedicated post introducing this exciting product. The China Academy for Agricultural Sciences and Haileda Food (Beijing) have jointly developed a type mantou that consists for 30% of potato. This is yet another step in the process of changing the potato into a major staple of Chinese cuisine (also see my post on that topic). The researchers have announced that they next step in this R&D project is to increase the percentage of potato to 40% and then to 50%. Other potato products will also be developed, like: noodles, or bread. (June)

Meat and derivatives

New duck blood products

Huaying Cherry Valley (Xinyang, Henan) is investing in improving duck blood processing. The company has a special subsidiary to develop a range of products from duck blood, including blood powder and blood bean curd. The company produced more than 10,000 mt of duck blood in 2014. This is an interesting example of how a traditional food can be successfully developed into a commercially produced product. Interested in learning more about duck products: see my post on that topic. (April)

Dairy

Mengniu launches cereal milk

Mengniu Dairy (Huhhot, Inner Mongolia) has launched a version of its DeLuxe milk mixed with cereals. It is marketed as the ideal food for office people who have to work late. DeLuxe is Mengniu’s range of milk products fortified with osteoblast milk protein. (January)

Mengniu launches yoghurt ice cream

Mengniu Dairy has launched a line of yoghurt ice cream under the Dilan brand. Mengniu intends to position this ice cream as a healthy food choice. I mentioned this product in an earlier post, focusing on the innovative advertising. (August)

DilanYoghurtIce.png

Mengniu launches new organic formula

Mengniu Dairy has launched a new type of organic infant formula under the Ruipu’en brand on June 5. With this move, Mengniu hopes to better compete with the international brands. According to analysts, the launch of this new product is a logic next step after Mengniu’s acquisition of Junlebao (2010) and Yashili (2013). The company’s focus is clearly moving from a general supplier of dairy products, to one of high end infant formulae. (June)

Ruipuen

Milking a new dairy product

Yukunlun Natural Food Engineering Co., Ltd. (Xinjiang) has launched donkey milk powder as a consumer product. CEO Zhang Ming has spent RMB 70 mln developing donkey milk-related products since 2007. So far, he has managed to break even on his investment. Zhang buys donkey milk from farmers at RMB 28 per kg. The retail price for donkey milk powder is around RMB 4000 per kg, double the price of imported cow milk powder, according to Zhang. (May)

Non-alcoholic beverages

New mineral water

A new manufacturer of mineral water, Dipu Beverage Co., Ltd. (Yanling, Henan), has been established. Its water is said to be rich in calcium, magnesium, potassium and sodium. (September)

Prickly pear juice

Shengshang Green Food Co., Ltd. (Yangling, Shaanxi) has launched a line of prickly pear juice drinks. The plant has a capacity of 30,000 hls p.a. The prickly pear (Rosa roxbunghii) is a local product, but has so far not been used for industrial processing. (August)

PriclklyPear

Alcoholic beverages

New apple wine producer

The joint apple wine project of the Shanghai-based Famous Wines Net and Lanhai Fruit Co., Ltd. (Shaanxi), Malanshan Apple Wine, has started production. The current capacity is 12,000 hls of wine p.a. The plant has a storage capacity of 16,000 hls. This figures are expected to rise to 20,000 hls and 32,000 hls respectively by 2016. Apple wine is positioned as a healthier alternative for the spirits that usually drunk in the Shaanxi region. Shaanxi is one of China’s major apple regions. The traditional product in that sector is apple juice concentrate for export. However, this market is very volatile and adding another product, that is also marketable in China would be welcome. (May)

Cocktails gaining popularity

Bairun Flavour & Fragrance (Shanghai) has announced that it will increase its investment in its subsidiary Tianjin Cocktail (Tianjin) from RMB 280 to 500 mln. The reason for this decision is the sharply increased demands for ready to drink cocktails. Shanghai Bacchus, one of the leading companies in the Chinese alcopop market, has increased its purchase of Bairun cocktails to 6 438,400 cases in 2014, 8 times the volume of 2013. Note that another innovative aspect of this item is that it is initiated by a producers of flavours, rather than one of alcoholic beverages (July)

Bacchus

Yanjing wheat beer

Yanjing Brewing (Beijing) has launched China’s first wheat (white) beer. The company uses Australian barley and wheat malt in the ratio 55:45. (August)

Arrowroot wine

Fushangfu Arrowroot Wine Co. (Zhanyi, Yunnan) has launched a new type of arrowroot wine, using locally produced arrowroot as raw material. The wine is marketed as a health drink rich in flavones, amino acids and puerarin. It also contains amounts of zinc. calcium and iron. (February)

ArrowrootWine

Ingredients

Banana powder

Chengli Group (Hainan) is the first in China to launch a banana powder to be used as a food ingredient. It is not only a useful flavor, but simultaneously adds many nutrients a food. It can be used in beverages, cakes, ice cream, candy and even infant formula is mentioned as a possible food that can be enriched with this banana powder. (January)

Low salt yeast extract

Angel Yeast (Yichang, Hubei) has launched low salt yeast extracts as an ideal means to lower salt in many types of food. Angel’s food engineers have performed a series of tests with various levels of salt to arrive at the lowest salt level at which the taste enhancing function of the yeast extract is still not harmed. (March)

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975.

 

 

Harbin – where the West meets the East

It is about time to highlight another region in this blog. After Pu’er in China’s southernmost province Yunnan, I am taking you to the opposite in this blog, to Harbin, the capital of Heilongjiang, which shares a large border with Russia’s Siberia.

What Harbin has in common with Pu’er is that it is not a purely ethnic Chinese city. The name Harbin already betrays that it is not Chinese. A number of stories about the name’s original meaning; one is that it means ‘place to hang fishing nets to dry’ in Manchu, the language of the people with the same name. The Manchus were once a powerful nation, and the emperors of the last imperial dynasty of China, the Qing Dynasty (1622-1912) were Manchus, not Chinese.

Moscow of the orient

After the Russian Revolution, a large number of Russians fled to Manchuria, with Harbin as their unofficial capital. It gave Harbin its nickname ‘Moscow of the East’. A number of Russian buildings still survive, like the orthodox cathedral. Moreover, some Russian words entered the local dialect. The most famous one is lieba, from the Russian chljeb ‘bread’. It refers to a large round bread baked with beer yeast. This type of bread has become the symbol of Harbin cuisine.

Lieba

Watch this video for more information about the Russian influence on Harbin cuisine.

When the Japanese invaded Manchuria, they more or less let the Russians live there in peace, while the Russians accepted Japanese rule; they had no choice. In fact, for a short period, Russians, Chinese, Japanese, Koreans and several national minorities (in particular Manchus and Mongolians) lived in a peaceful coexistence in Harbin. This ethnic diversity has created an equally diverse local cuisine. Besides the afore mentioned bread, dairy products also became part of the diet of Harbin people, long before Chinese elsewhere started to appreciate the white gold. The potato, the typical staple of Western cuisine, has also grown roots in this city.

The consumption of coffee is also increasing rapidly in Harbin. Insiders report that there were more than 400 coffee shops in the city at the end of 2015, consuming about 60 mt of coffee beans per year.

Harbin Beer (better known as Hapi in China) is one of the top beer brands in China, though currently owned by Anheuser-Busch. The Harbin municipal government and Harbin Cultural Tourism Group are co-hosting the 2016 China-Harbin International Beer Festival, which will run from June 30th to July 17th at the Harbin Frozen World in Songbei district. There will be 11 beer tents, 16 food exhibition areas and four cultural exhibition areas. The total area of the beer festival is 600 thousand square meters

Agricultural region

Heilongjiang is one of the prime agricultural regions of China. The chernozem soil in Harbin, called “black earth” (Heilongjiang literally means: ‘Black Dragon River’) is one of the most nutrient rich in all of China, making it valuable for cultivating food crops. According to the municipal statistics of 2013, Harbin alone was good for more than 2% of the national grain output, 1% of the meat and 4% of dairy products.

BlackEarth

Heilongjiang is one of the major grain-producing areas in China, ensuring food security for the country. The grain output of the province reached 67.6 billion kgs in 2014, leading the country’s provinces since 2011 and accounting for one-tenth of the national total.

In recent years, the province has pushed forward agricultural modernization, promoted the green food industry and established marketing platforms for Internet Plus agriculture.

A sophisticated Internet Plus marketing platform has been established for rice products in the province. Heilongjiang rice is of high quality but used to sell poorly.

The following table shows the development of the total turnover of the Harbin food industry during the past few years.

Year Turnover(RMB bln)
2008 40
2010 50
2011 70
2012 90
2013 95

The processing of agricultural produce was still the most prominent activity in the Harbin food industry in 2013, as is shown in the following breakdown.

Activity ratio (%)
Processing of primary produce 68.0
Food production 15.3
Beverage production 8.6
Tobacco products 8.1

(tobacco is part of the food industry in Chinese statistics)

Top companies

Wondersun Dairy Industry Co., Ltd.

Wondersun is part of Heilongjiang’s biggest Agricultural State Owned Enterprise called Beidahuang Group. The company is ranked as fifth among China’s dairy enterprises and holds 7 subsidiary companies and 41 factories. Wondersun’s liquid milk ranks among the top ten in the country and was assessed as one of China’s most valuable brands in 2003. The company has formed a strong sales network that covers the whole country. Wang Jinghai, president of Wondersun, believes Heilongjiang is ideal for raising cows and producing dairy. The company is expected to sell products worth RMB 50 mln in 2015 through e-commerce channels and has set a sales goal of RMB 300 mln next year.

Heilongjiang Dairy Group Co., Ltd.

Heilongjiang Dairy Group was established in 2004, and the companies registered capital is 213 million RMB. It is one of the key national enterprises in the agricultural industry in China. The main shareholder is the Haerbin HIT group with 10 other small shareholders. The company has four brands, and the brand Longdan and Jinxing have a high reputation in the entire country.

Beidahuang Group

Beidahuang has 16 agriculture branch companies and Haolianghe Fertilizer Company. It is also the parent of Beidahuang Grains Co., Ltd., and Harbin Longken Malt Co., Ltd.. The company owns 624,000 hectares of land. The main crops are rice, soybeans, corns, wheat and brewing barley, supplemented with crops cash crops like red beans, kidney beans, pumpkin seeds, lucerne, medicinal herbs and flax. Haolianghe Fertilizer Co., Ltd. has an annual production of 200,000 mt of carbamide and other fertilizer products. Beidahuang Grains Co., Ltd. has an annual production of 1.4 million tons of refined rice and 100,000 mt of other byproducts. The yearly malt output of Harbin Longken Malt Co., Ltd. is 200,000 mt.

Harbin as gateway to China

Harbin has been on the radar of foreign investors from the beginning of China’s economic reforms.

Nestlé was one of the first Western multinationals to invest in China, with a joint venture for the production of infant formulae in Acheng, a suburb of Harbin in the 1980’s. This subsidiary of Nestlé has withstood all turbulent developments of China since then.

Nestle

Another multinational, McCain, started a potato processing venture in Harbin in 2005. The venture included a 7.5 ton/hour plant and two associated potato storage facilities. McCain Foods has been preparing for its expansion in China for a long time before it finally chose Harbin. The company stated that Heilongjiang Province produces the largest output of potatoes yearly. With its unique geological position adjacent to Russia, Harbin may prove an ideal investment location for companies who want to tap the Far East market, he said. The company decided to double its capacity in 2012.

Other foreign investors in Harbin include a yeast plant of Burns Philp. That makes sense, as bread has been part of the local cuisine for a long time. Even thought lieba is a kind of sourdough, yeast bread was easily adopted as a quicker alternative for the traditional Russian style bread. I myself have organized a number of baking seminars, when I was promoting yeast and bread improvers of Gist-brocades (now part of DSM) in China.

China has reacted quickly to cash in on the opportunities created by the trade war between Russia and the EU/US. This will be an extra large boost to the importance of Harbin as China’s northernmost foreign trade hub for food and agricultural products. Harbin’s ‘Russian’ background will certainly facilitate this development. The China Harbin International Economic and Trade Fair was renamed into Sino-Russian Expo in 2014.

The World Dairy Expo & Summit will be organised again in Harbin, april 21 – 24, 2016. The 2015 edition attracted 15,728 visitors from all over the world.

HarbinExpo

Organic and green food

Heilongjiang is China’s primary region for organic agriculture and Harbin is again a centre for this industry.

The municipal government has build a large modern food storage and distribution system for organic produce. The system includes a food logistics centre with an annual handling capacity of more than 1 mln mt, three distribution centres with a combined annual handling capacity of 1.5 mln mt and 11 grain depots each with a storage capacity of 200 000 mt.

HlGreenFood

McDonald’s sources the rice it uses on the mainland from Harbin. The city grows some of China’s top-quality rice. It has more than 600,000 hectares of paddy field producing 3.25 mln mt of rice a year as well as some 200,000 hectares of soybeans, none of it genetically engineered. It is not necessarily organic rice, but at least is produced according to China’s ‘green’ specifications.

Harbin also has annual corn output of more than 10 mln mt. The hybrid breed contains three times more protein than common breeds.

In addition to farming, the city government also invests in livestock breeding and processing. It has nearly 500,000 cows, 3 mln beef cattle and 11 mln pigs, and produces 880,000 mt of meat, 365,000 mt of eggs and 1.5 mln mt of milk a year.

The first flagship store for green food from Heilongjiang opened in Hong Kong in February 2014 offering more than 200 products. Of the 64 suppliers, 27 were based in Harbin.

Agreeable culture

Harbin is an interesting alternative to for international investors in the Chinese food and beverage industry. On top of the advantages introduced above, the people of China’s Northeast are known as easygoing and honest. The good people of Harbin are outstanding hosts, entertaining their guests with supersize dishes of fish and meat, to be washed down with lots of baijiu, traditional Chinese spirits.

HbDish

It may take a little longer to negotiate a deal. They take their time to get to know you and do not feel the urge to put on a business-like act when dealing with foreigners, as you often see in other parts of China. However, once the believe they have figured you out and the impression is positive, you are in.

Mulan – a food production centre in ‘greater Harbin’

The county of Mulan, in Harbin’s northeast, is an important site on the Silk Road Economic Belt. Its connection with Harbin has been strengthened by the completion of the Mulan-Songhuajiang Bridge.

Mulan has a population of 280,000 and covers an area of 3600 square meters. It administers six towns and eighty-six villages. There are thirty reservoirs along the Songhua River in the county and the forest coverage rate is nearly 50%. Mulan has been awarded various titles, such as “National Ecological Agricultural County”, “National Green Rice Production Base” and “National Rural Tourism Demonstration County”.

Mulan is also known for its, rice, coffee and beer. Located in the black soil area of northeast China, it enjoys distinct seasons, adequate sunlight and moderate rainfall, which contributes to the excellent quality of its crops. Hundreds of kinds of precious herbs grow in the 670,000 hectare forest and the abundant grassland feeds flocks and herds. With the improvement of agricultural infrastructure, Mulan has seen remarkable progress, especially in rice and red meat processing.

With the support of related policies and modern agriculture reform in Heilongjiang, the county has seized all opportunities to construct a grain production base, developing grain processing efficiency and funding a green food industry. It built an 8-square-meter agricultural production park to bring together various agriculture projects for cooperation.

In August, 2014, the Chinese Academy of Agricultural Sciences (CAAS) Grain Processing Technology Institute (Harbin) settled in the industrial park, the first national organization instituted by CAAS in Heilongjiang. It focuses on grain processing, product innovation and inspection services. This move inaugurates a new cooperation method between national research groups and local food industries.

In future, Mulan plans to expand the market to Russia, North Korea and Japan with the help of the Heilongjiang Silk Road Belt and, in three to five years, become the leading food research center of Northeast Asia. That development would improve Heilongjiang’s influence in the area. The government intends to pay more attention to ecological protection and sustainable development under emerging circumstances to create a better Mulan.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

Eurasia Consult Consulting can help you embed your business in Chinese society.

Peter Peverelli is active in and with China since 1975.

Potato growing & processing in China

Few people know that China has already been the world’s largest potato production and consumption country since 1978.

The humble potato, a staple of many a European nation, used to have only a supporting role in Chinese cuisine, even though it has been grown in China for about 400 years. Known as tudou (literally: ‘earth bean’) in colloquial Chinese, or malingshu (‘horse bell tuber’) in more formal texts, the potato traces its history in China to the Ming dynasty, and was popularised by French missionaries in the eighteenth and nineteenth century.

As the name indicates, potatoes used to be seen as a vegetable in Chinese cooking. In home style cooking, in particular in Northwest China, where the potato is an indigenous crop, chunks of potato are added to stews, particularly with beef.

Chefs have created some deep fried delicacies, including tasty little patties and a finely shredded version of the French fry, which is sheer indulgence. Most common in the home and (home style food) restaurants, is the “tudousi“. This dish might come with strips of pork, slices chili, and pickled vegetables.

Image

Some cooks are even combining the foreign potato with very traditional Chinese flavours like the famous yuxiang (fish flavour) spice mix, creating dishes like yuxiang potatoes, shown in the picture below.

YXpotato

The ultimate dish in this series should be: Sweet and Sour Potatoes, a potato variation on the most typical of Chinese dishes in overseas Chinese restaurants: Sweet and Sour Pork.

SweetSourPotatoes

However, potatoes have started to challenge the great staples: millet, wheat and rice in China in recent years. The arrival of Western style restaurants and in particular fast food chains, have introduced potato dishes to virtually all urban Chinese. The countryside can be expected to follow soon.

Potato growing

Insiders expect that China will produce 96.82 mln mt of potatoes in 2017. The top regions, Inner Mongolia, Gansu, Yunnan, Sichuan and Guizhou, are good for 45% of the national volume. The following table shows the regional output of potatoes in 2015.

Region Volume (mt)
Gansu 2,146,000
Inner Mongolia 1,883,000
Sichuan 1,612,000
Guizhou 1,503,000
Yunnan 1,444,000
Chongqing 1,017,000
Heilongjiang 565,000
Shaanxi 561,000
Ningxia 423,000
Hubei 415,000
Liaoning 383,000
Shanxi 362,000
Qinghai 362,000
Hebei 348,000
Hunan 285,000
Jilin 237,000
Fujian 231,000
Zhejiang 163,000
Guangdong 162,000
Anhui 49,000
Tibet 5,000

The top 5 regions are indicated in the following map.

Image

 

Potatoes are getting so important in China that the Zhengzhou Commodity Exchange (ZCE), one of China’s two agricultural commodities exchanges, intends to introduce potato trade. ZCE is reporting problems with obtaining the necessary permits from the China Securities Regulatory Commission and other relevant central authorities, that are said to need time to “consider more about the development of the market”.

The ZCE has been mulling over the launch of the product for quite a long time. The exchange disclosed its plan to introduce potato futures trading in early 2012, saying the contract was set to be launched by the end of that year. Later that year, the agricultural authorities of Gansu province said all preparations for potato futures had been completed.

Potato growing as poverty relief

Guizhou and Gansu province are expanding the amount of land they have planted in potatoes in accordance with a Ministry of Agriculture plan which calls for around 6.7 mln hectares of them by 2020. One out of 100 towns or villages in under-developed Guizhou province is Lutang, which now has much of its land for potato growing. The head of the village, Zhang Wei, says they have 1.15 mln kgs of top quality potatoes that they plan to distribute to farmers for free to use on 200 hectares of land. Local authorities say that as many as 60 percent of the households in the area living with poverty see the potato planting as a good method to help them generate income and two special cooperatives have been set up to keep prices stable and to ensure income. The planting area is expected to reach just over 660 hectares by 2018.

Frozen French fries

Only 10% of the national output is further processed into various (semi)finished products.

In the last three years, China’s rapidly changing lifestyles and eating habits have resulted in a booming fast-food industry. Chinese consumers, especially those who live in large urban areas, have accepted Western-style fast-food restaurants that serve French fries and other popular side dishes as a way of life in China.

203,000 t of frozen french fries were produced in China in 2012, up 21.56%. Another 130,000 mt were imported, indicating that there is still ample space for growth. A small volume, 14,100 mt, was exported.

Frozen French fries require raw materials compliant with strict requirements, such as shape, starch content, sugar content, and color. Therefore, processors usually contract with farmers to produce potatoes which meet certain quality conditions. After a poultry disease outbreak and other problems in that industry, which affected Kentucky Fried Chicken and McDonald’s, the largest buyers, production of frozen french fries has decreased considerably. Although the scare seems to be over, production is not expected to rise considerably soon.

Foreign investors

Still, a market like this is bound to attract international investors.

  • JR Simplot established in 1992 in Beijing’s Fengtai district, is a joint venture between US-based JR Simplot , McDonald’s and Beijing Agricultural, Industrial and Commerce General Company and primarily produces french fries and hash browns for McDonald’s and other East Asian customers. It was fined a record RMB 3.9 million for water pollution in April 2015.
  • McCain Foods started construction of a French fry processing facility in Harbin (Heilongjiang) in 2004. The new company, which was registered in the Harbin Economic and Technological Development Zone, was McCain’s first processing facility in Asia.
  • Aviko has a production facility in Minle (Gansu) since 2008, and in June 2014 signed another project in Zhangjiakou (Hebei), near Beijing. The latter is a partnership with Snow Valley Agriculture.
  • Conagra has acquired TaiMei Potato Industry Limited, a potato processor in Shangdu (Inner Mongolia) in July 2014.
  • Farm Frites has signed an agreement with Inner Mongolia Linkage Potato Co. Ltd. in September 2014, to set up a joint venture in Chifeng (Inner Mongolia). The Joint venture will build a new french fry factory and target the premium segment of the Chinese french fry market. Inner Mongolia Linkage Farm Frites Co. will be for 75% owned by Linkage, while Farm Frites will own 25%.

Top 3 brands

Instead of looking at volumes, this blog prefers to introduce ‘top brands’ from a popularity perspective. Here are the top 3 french fries chain outlets according to a Chinese consumer site.

1 Calbee Crazy Potato Calbee

2 Tudou Xinyuan (Potato Wish) TudouXinyuan

3 Mofa Tudou (Magic Potato) MagicPotato

 

Potato starch

China’s 2013/14 season potato starch production is forecast at 350,000 mt, a slight decrease from the previous year. Imports are forecast at 41,000 mt, up 10%. China╒s Ministry of Commerce announced in February 2013 that anti-dumping duties on EU potato starch imports would be imposed for another five years. Top Chinese producers of potato starch are:

Company Location
Huaou Starch Inner Mongolia
Lantian Potato Gansu
Beidahuang Potato Heilongjiang
Yundian Starch Yunnan
Weston Potato Qinghai

 

Potato chips

Insiders estimate China’s 150 potato chip plants produced 375,000 mt in the 2012/13 season, up 10%.

Potato chips have become a popular snack food in China. Most international players are studying their options, and some of them, like Pepsi (Lay’s), have started local production. However, not any potato will do. Each must be precisely the right variety, grown into an ideal shape and size and available on the exact schedule necessary to supply the chip factories in Beijing and Shanghai. Potatoes grown by local farmers don’t always make the cut. Unless they are handled as delicately as eggs, they risk bruising — a common side-effect of China’s manual farming techniques and crude distribution methods. To ensure the yellowish color of its Lay’s chips, Pepsi also requires potatoes to

be low in both sugar and water content. The ideal specimen is about as large and round as a baseball. Even now, Pepsi’s two farms still produce only about 40% of the potatoes Pepsi needs in China.

Other major potato chip brands (manufacturers) in China are: Calbee (Calbee), Lay’s (Pepsi), Oishi (Liwayway) , Shanghai House (House), Carrefour (Jishijia). P&G has negotiated with a potential partner in China for the local production of Pringles.

Top 3 brands

Here are the top 3 potato chips brands according to another Chinese consumer site.

1 Lay’s Lays

2 Capico Capico

3 Pringles Pringles

Capico is the only domestic brand in this list. Its producer, Dali Foods (Fujian) got listed on the Hong Kong Stock Exchange in November 2015. Dali is also one of China’s top producers of biscuits.

The following screenshot shows how the major brands seem to imitate Pringles’ packaging, while offering their chips for a significantly lower price.

PotChipsComp

Exports

The first Chinese potato chips were exported to the US in the course of 2015. However, it was not Capico, but Chak Chak, produced in Fuxin (Liaoning). Chakchak chips stand out by their bright colours, produced using natural anthocyanin. It is interesting to observe that an innovative product like Chak Chak can beat a generic version of the product (Capico) in getting accepted on the global market.

Chakchak

Potato as staple?

A discussion has started in China to improve the status of the potato as staple food. Vice-Minister of Agriculture Xu Xinrong posted a remarkable statement on the ministry’s website on January 9, 2015, entitled ‘strategies for turning potatoes into a staple’. In this concept, potatoes will gradually become China’s fourth largest staple food, after rice, wheat and maize. Xu Shaoshi, minister of the National Development and Reform Commission (an organization under the State Council), picked this up and added that potatoes will be mixed into bread, steamed buns and noodles to suit Chinese consumers’ taste and habits. the Ministry of Agriculture is planning for 50% of China’s annual production of potatoes to be consumed as a staple food on the domestic market by 2020.

As an emerging staple food in China, potatoes have to compete with bread, as introduced into our post on the position of bread in China elsewhere in this blog.

The Institute of Agro-Produce Processing Science & Technology of the China Academy of Agricultural Sciences is developing new applications of potatoes as staple food. One of the products in the pipeline is flour consisting of 35% whole potato powder and 65% wheat flour. Using machines also developed by the Institute, a range of pastas can be produced. In cooperation with Haileda Food (Beijing) it has developed a type mantou that consists for 30% of potato. The product was launched on June 1, 2015. The potato buns are yellower and harder than traditional versions. But they are more nutritious, containing extra vitamins and dietary fiber and less fat. The researchers have announced that they next step in this R&D project is to increase the potato content to 40% and further to 50%. Other potato products will also be developed, like: noodles, or bread.

 World Potato Congress in China

The 9th World Potato Congress (WPC) has been held in Yanqing county in northwest Beijing from July 28 to 30. More than 3000 representatives from over 30 countries around the world gathered in the capital for the top event by the global potato industry. More than 50 domestic and foreign well-known experts presented academic reports about the industry. Latest products and technologies were displayed during the event. There was an experience area showcasing potato food such as potato chips and potato mud to visitors. China Potato Expo, China Potato Congress and an international symposium on potato products and industrial development ran parallel to the WPC.

China Potato Expo 2016 will be held in Kunming (Yunnan), June 27 – 29.

Experimental zone in Beijing suburb

Yanqing county in the northern suburb of Beijing is an ideal area to grow high-quality potatoes. The climate is perfect and the soil should produce bumper yields of the vegetable. Already the county has cultivated more than 10 varieties of potatoes at the seed stage. It is also the home of the newly established China branch of the International Potato Centre, a global scientific research organization that seeks to reduce poverty and achieve food security on a sustained basis in developing countries. The centre will be China’s first international agricultural research institution and will serve the rest of the Asia-Pacific region.

The Chinese Academy of Agricultural Sciences and the Beijing Xisen Sanhe Potato Co, one of the country’s largest seed merchants, have also set up shop in Yanqing, where they have been working on new strains of potatoes. The research and development at their facilities, and the new International Potato Centre should help increase production not only in the area but in the rest of the country. Plans are also underway to open a high-tech scientific park for potato research in Yanqing. The project will be a joint venture with neighboring Zhangjiakou in Hebei province.

Beijing Hengde Jiahui Equity Investment Co。 is looking to fund agricultural and food firms focusing on the potato industry, and has set up a center in Yanqing county.

Dutch potatoes in Inner Mongolia

HZPC of the Netherlands has signed an agreement with Geruide Potato Co., Ltd. (Inner Mongolia) to establish a potato growing base in Taipusi (Inner Mongolia). The joint venture is expected to start on January 1, 2016, and is projected to produce 50,000 mt of potatoes p.a. Although not officially announced, I assume that HZPC’s move is based on the expectation that it will become the main supplier of the above mentioned foreign potato processing plants in the region.

Potato songs

Feng Xiaoyan, 52, a potato farmer-turned-entrepreneur, has even commissioned multiple potato-themed songs to help promote the consumption of potatoes. On a recent day, Ms. Feng appeared on a local television station to sing a warbling tune expanding on the tuber’s delights. “Fry up a plate of slivered potato, eat a slice of potato flatbread! Potatoes are our fortunate eggs, potatoes are our fortunate eggs.”

Potato research institute

Yunnan Normal University intends to set up a Potato Research Institute. The univeristy stated that the establishment of the Potato Research Institute is in line with the national development strategies of positioning the potato as a staple food, and is also in accordance with Yunnan’s development plan for a green economy, food safety, and plateau agriculture. It has set up a virus-free potato seed repository, with more than 1,200 germ plasma cultivated in China and abroad. It’s one of the largest in China in terms of potato genetic diversity.

Drinking potatoes

Mengjian Biotech (Inner Mongolia) has developed a health drink made from potatoes. The beverage has a high content of Superoxide Dismutase (SOD). It is not clear when the drink will be available for consumers.

Eurasia Consult Food knows the Chinese food industry since 1985. Follow us on Twitter.

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Peter Peverelli is active in and with China since 1975.