SHANGHAI – Danish Crown and JBS S.A. signed an agreement to supply meat to Win-Chain, an aggregated sourcing platform owned by Chinese retailer Alibaba. The two companies signed the contract during the China International Import Expo (CIIE) in Shanghai.
Sáo Paulo, Brazil-based JBS S.A. signed on to a three-year deal valued at $1.5 billion to supply beef to China. China’s COFCO Meat, a subsidiary of the COFCO Group, used the CIIE as an opportunity to ink deals to buy more beef and mutton from JBS Australia and New Zealand-based Anzco Foods, according to Reuters.
For Danish Crown the deal, valued at €300 million, calls for weekly deliveries of 250 tonnes of Danish pork for five years.
“The Chinese market is evolving very rapidly at the moment, and there are actually three things happening all at once,” said Jais Valeur, Group CEO. “First, e-commerce is exploding, with consumers buying the products they want online and having them delivered to their front door only a few hours later. In my view, Shanghai now has the world’s most advanced market for e-commerce. Next, instead of buying fresh meat at the so-called ‘wet markets,’ consumers have started purchasing retail-packed products in the supermarkets, in exactly the same way that we shop in Denmark.
“Finally, a growing number of Chinese are eating out, similar to the trend we are seeing in the US and Europe,” Valeur added. “We are now moving further up in the value chain in China, and I see significant potential in this.”
The agreement with Win-Chain marks the second partnership between Danish Crown and Alibaba. In August 2017, Danish Crown signed an agreement to sell pork on Tmall, and Alibaba e-commerce site.
“Danish Crown’s integrated farm-to-fork production ensures product of a uniformly high quality, and Chinese consumers are also attracted by the strong focus on innovation and sustainability,” said Richard Wang, managing director, Fresh Meat, Win-Chain. “We look forward to working closely together to bring quality Danish meat products to the over 600 million annual active consumers on Alibaba’s platforms.”
Pork sold on the Tmall site was sourced from Danish Crown’s processing facility in Ringsted, Denmark. But in 2019, the company expects to open a pork processing facility in Pinghu, a city that borders Shanghai. The 17,000-sq.-m. plant has been designed to produce 14,000 tonnes of processed products a year. The primary customer base is the 25 million-plus people living in Shanghai, but Danish Crown pork also will be available to the rest of the Chinese population, which currently stands at almost 1.4 billion people, the company said.