Meeting the demand of China’s changing and growing appetite is a tall order.
With the rising desire for fresh, healthy, convenient and delicious meal solutions across China, new protein sources like salmon are quickly gaining popularity.
When consumers in China salmon, studies show that they want it in restaurants or on the go. In other words, people are not interested in purchasing this particular fish from a fishmonger and cooking it at home. In fact, 80 percent of salmon consumed in China is through restaurants, and only 20 percent is prepared in home kitchens.
The demand for salmon has increased drastically in China over the last five years. China’s annual salmon consumption is now over 10,000 metric tons, and projections put the value of China’s salmon industry at CNY 9 billion ($1.36 billion) by 2018.
The journey of salmon from water to plates is impressive, and it takes the cooperation of a diverse set of industries to make it happen.
So, where does it come from and what does it take to get salmon from the water to the plate?
It’s perhaps best to start at the end of the journey, or at least where Chinese consumers make the point of purchase. As mentioned, few consumers are putting salmon on their weekly grocery list and experimenting with new recipes. The demand is coming from consumers who want it cleaned, prepared and ready to eat.
As with all fresh seafood, innovation, efficiency and convenience are key, and a few companies are leading the charge. Mr. HEMA Fresh, for example, was once only an O2O platform that offered expedient food solutions to consumers. In a step toward creating a more convenient and immediate user experience, however, it has recently opened four brick and mortar “experience stores” in Shanghai.
What makes this model unique is that the impressively large, 4,500 square meter stores also contain a well staffed and state-of-the-art kitchen. The model is such that customers can order and pay online from a menu of customizable meals, as long as the ingredients are found on the store’s shelves. The meals are then prepared in an ultra efficient, assembly line manner, on site in the store’s kitchen, then delivered within a five kilometer radius in 30 minutes or less.
According to one article, the capacity for one Mr. HEMA Fresh kitchen that employs 35 staff, can make and deliver 1,500 orders every day during lunch the lunch rush. Projections are set to double that number, servicing 3,000 meals per day. And salmon and fresh seafood are always on the menu so as loyalty builds, so too will demand increase.
The fish, of course, doesn’t appear out of thin air. Online B2B platforms like Gfresh make Mr. HEMA’s business model possible. And meeting the demand of freshly prepared salmon as basically a fast food option will only to create more demand over time.
When it comes to transporting time sensitive products like fresh seafood, the only way forward is to create new convenient and, perhaps most importantly, reliable methods of connecting suppliers to end users.
So, moving backward up the supply chain, from where will the salmon be sourced?
Again, innovation is key. Chinese consumers don’t seem necessarily fussed over farmed salmon versus wild, which is good for meeting the rising demand. Innovative techniques and ever-higher standards of fish farming practices are producing consistently healthy and nutritious fish. Therefore, there isn’t the same stigma around farmed salmon that is found in North America.
And because of the sheer amount of investment and research into salmon farming practices, cultivated salmon is found in places never before thought possible. For example, one might never have thought that China would be able to supply its own salmon, but the largest lake in China, Qinghai Lake, has become a source for spawning and fish farming.
Located in the Qinghai province, the massive lake covers an area of 4,000 square kilometres. Normally lakes are unsuitable for salmon farming, but Qinghai lake is saline based and therefore works as a breeding ground.
Of course, demand is much higher than what the lake can supply and salmon is sourced from around the world. Norway has traditionally been one of the most reliable sources for salmon to China, but politics have interfered over the years.
Canada is another supplier of bulk salmon to China’s markets, and companies there are finding innovative ways to cultivate the fish, instead of seeking only wild supplies.
Gfresh partners with a company called Marine Harvest, for example, which doubles down on their commitment to providing larger supplies of salmon than ever before. Calling it the “Blue Revolution”, the company sees great potential in aquaculture as a food solution to the planet’s ever increasing and hungry population.
Companies like Marine Harvest are paving the way in innovative farming practices. They raise Atlantic salmon on the Pacific side of the country and the appeal of Canadian fish comes from the rigorous standards of cleanliness and safety.
It will take partnerships like these, linking companies across the world, in order for supply to meet demand. And when it comes to fresh food, it’s never as simple as going from point A to point B. With a product this fragile, there are always increased health risks, higher safety measures and timeliness issues to consider.
In that spirit, innovation is key. Online platforms like Gfresh, innovative store models like Mr. HEMA Fresh and unconventional approaches like those taken by Marine Harvest, must work together to meet ever rising demands.