China develops organic meat sector

A visit to Beijing’s higher-end retailers confirms the trend. A city centre outlet of the Ito-Yokado chain sells laminated trays of Suneda organic pork slices at Chinese Yuan Renminbi (CNY)180 (US$28.41) per kg. Also on sale is certified organic Jing Qi Shen (‘Manner of Organic’) pork slices from its black pigs at CNY150 (US$23.68) per kg. The store also sells 100g packs of imported Spanish ham, produced by Cinco Jotas from corn-fed pigs, at a price clearly targeting wealthier consumers (CNY338, or US$53.34).

Another outlet for Beijing’s nascent organic meat market is Lohao City, a chain of seven organic-themed stores. The Shine’s Group markets vacuum-packed beef and sells veal for CNY75 (US$11.8) to CNY88 (US$13.9) per 500g. Processed at the company plant in Tianjin, two hour’s drive west of the capital, Shine’s Group veal is also served at two company-owned Beijing restaurants, and the group hires in breeding and animal husbandry advice for its milk-fed veal from The Netherlands-based VanDrie group.

Also targeting the Beijing market, at Lohao City stores, is Taiwan-based Wild Pork Kingdom (WPK). Affiliated with UK-based animal welfare group Compassion in World Farming and the Food Animal Initiative, WPK rears its animals on an 8.3 hectare farm in Hebei, the province neighbouring Beijing, with its standards monitored by international certifying company SGS.

Founded in 2007 by Taiwan native Bob Wang, the WPK farm cross-breeds Changbai Mountain with Beijing Black Pig pigs. Animals for slaughter are kept outside from the age of five weeks. Wang slaughtered 1,000 pigs in 2011, but plans to finish 8,000 annually by 2013. Aside from Lohao, the firm will sell through restaurants and hotels, said Wang.  “I believe that good animal welfare and a happy, healthy environment will produce good pork,”​ he added.

In contrast with these high prices and care in production, the more proletarian Jinkelong supermarket chain prominently displays local processed meat brands, such as Shineway, which has done particularly well among low-income groups. Jinkelong’s own-brand packs of pork sell at CNY40 (US$6.3) to CNY50 (US$7.9) per kg – but they are not organic.

Beijing’s lower-income masses, who typically earn around CNY2,000 (US$315) a month, still eat cheap processed meat such as Shineway’s CNY2 (US$0.3) sausage meat sticks.

But the future could be in niche high-value areas such as organic meats. The Chinese meat output is limited by China’s shortage of land – and an emphasis on protecting grain yields. Market analysts Frost & Sullivan noted that beef production declined slightly to 6.387 million tonnes (mt) in 2011, while consumption stood at 6.403mt.

Confusing standards​

Increasing demand for beef is forcing a segmentation of the beef market between low and high level, as well as a split in packaging. “All kinds of​ [chilled] meat cuts, beef products, small packaging meat, and Western cooked meat rush into different sales channels to meet the unique needs of different consumers,”​ said Frost spokesman Jeff Zhang. Per capita consumption is still merely 4.1kg per person in China compared to a 10kg global average. And China’s beef prices are rising: as of December 2011, they had reached CNY39.78 (US$6.28) per kg, more than double the average in January 2006. Meanwhile, China is maintaining its import bans on US beef, made in 2003 on mad cow disease grounds, and has also banned imports from the EU and Brazil.

Despite the price potential, the development of standards for China’s organic meat market is chaotic, according to Wang Xiaorui, livestock analyst at Beijing Orient Agribusiness Consultants. This claim is echoed by local consumers, who complain of the confusing labelling system in China, which requires both the green-orange national organic logo and the logo of the third-party certification body to be displayed on packaging.

While the China Organic Food Development & Certification Centre (OFDC) can certify as an IFOAM-accredited body, only two other certifiers have been accredited by the China National Accreditation Board for Certifiers (CNAB): the independent WIT Assessment and the semi-state China Organic Food Certification Centre (COFCC). The latter has most market share.

In a filing to the International Task Force on Harmonisation and Equivalence in Organic Agriculture, Liu Zenhui of the China Product Certification Centre explained how Chinese standards are based on IFOAM (International Federation of Organic Agriculture Movements) and European Union organic criteria to “promote the international organic trade”​.

However, other non-organic players have muddied the water with similar sounding programmes that do not meet national organic standards. Established in November 1992 under the Ministry of Agriculture, the China Green Foods Development Centre oversees two ‘Green Food’ standards: A, and the more stringent AA. However, Green Food standards are less associated with production per se than with the testing of products for chemical residues. Green Food standards do not meet IFOAM criteria.