RANDERS, Denmark – Danish Crown, which accounts for almost 10 percent of Danish exports to China, announced plans to bring a processing plant to the people. The company said it will invest DKK300 million ($43.9 million) in a processing and retail plant based in Shanghai.
China is the world’s largest consumer of pork, but the ways in which Chinese consumers purchase meat are shifting, according to Danish Crown. Chinese consumers traditionally have purchased pork through “wetmarkets” where pigs are sold cut into large pieces that the consumer can see and touch. But a growing number of consumers in China are dining out and purchasing their groceries online for home delivery.
“Actually three things are happening,” CEO Jais Valeur explained. “Firstly, much of the consumption is moving into foodservice or restaurants similar to the USA or Europe. Secondly, we see a vast increase of e-commerce where groceries are bought and delivered at home. This is growing immensely in China and cities such as Shanghai likely have the world’s most advanced e-commerce market. The third trend is that consumers in supermarkets have also started buying retail packed products precisely as we know from Denmark.”
Valeur added that Chinese consumers have a lot in common with consumers in the West — they’re pressed for time; they want convenience items and meat quality and animal welfare increasingly have become important to them.
“It is therefore evident that we should try to capitalize on this by our own production,” Valeur said. “Is this a chance we are taking? Yes, it is, but this is one of the chances we should take as a big company and try to see if we can get closer to the market, closer to consumers and further up in the value chain in China — rather than just being a raw material supplier.”