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China, seafood, and cold chain: the perfect match?

We know China is a simply enormous market for seafood, with imports predicted to hit $20 billion annually by the next decade. From fresh to live to frozen, China simply can’t get enough seafood.

The trick is getting it into the hands and mouths of hungry consumers. Cold chain, i.e. temperature-controlled supply lines, is essential in keeping produce fresh – or, in the case of some species, alive – during transit.
65% of all seafood in China passes through the nation’s chilled supply network.

Trouble is, China’s cold chain remains relatively undeveloped compared to more mature markets like Europe and the US. Instead of cooling off though, the market is going to heat up. Cold chain in China has enormous growth potential – thanks to the influence on those monster seafood imports.

In practical terms, this opens up the market to manufacturers and suppliers of world class chilled logistics solutions and food storage equipment. 

Let’s take a look at the sector in a little more detail.

Cold chain in China: underdeveloped but growing fast

For context, cold chain refers to temperature sensitive supply chain procedures, covering storage and transport, of perishable goods. When done well, chilled logistics increases shelf lives and maintains product quality.

As of November 2016, China’s total freezer capacity, a good measure of an effective cold chain network, measured around 93.5 million cubic metres. While this was a 12.5% increase in capacity, compared with 2014’s numbers, it still lags behind more established nations’.

The US, for instance, has an average freezer capacity of 0.36 cubic metres per capita. In China, this currently floats around 0.07 cubic metres per capita.

However, this sector has been earmarked for terrific growth. Research and Markets, an international research company, has predicted a CAGR of 17.13% for China’s cold chain industry between 2017-2021. What’s more, growing demand for seafood has been identified as a major growth driver for Chinese chilled logistics.

Quality control is a major sticking point for Chinese consumers, as product substitution is rife nationwide. Imported, foreign-sourced seafood, with clear labels of origin, subsequently does much better on the market. Japan’s Mashura Nichiro exports 90% of its lobster to the Chinese market as a result, and other companies follow suit., such as Canada’s Clearwater Seafoods.

The rise of cold chain is expected to play right into exporters’ hands, as it means more of their quality produce can reach all of mainland China in good condition – not just the key coastal regions.

In fact, the growth in demand for fresh and frozen seafood is already paying off for China’s top 100 cold chain service suppliers. Their revenues grew 17.5 % in 2014-2015, reaching $2.5 billion, indicating just how lucrative the sector is for outside suppliers.

E-commerce signals shake up in seafood logistics in China

E-commerce is changing global trade networks, so why should seafood in China be any different? JD Fresh, amongst China’s leading online fresh food retailers, has begun standardizing its sourcing, storage, and transportation processes to ensure products stay in top condition from catch to cooking.
JD runs its own temperature-controlled warehouses and logistics and partners with specialised freight movers to keep its supplies flowing. Will this model be adopted and rolled out by JD’s competitors, such as Alibaba’s TMall? It’s very, very likely, if they aren’t doing so already.

Apart from e-commerce changing both buying habits and delivery methodologies, the need to develop and expand temperature sensitive logistics comes right from the very top. The General Office of the State Council, China’s cabinet, recently published guidelines on the sector’s development, stressing the importance of food safety.

Seafood & cold chain provide opportunities for foreign firms throughout China

Demand for frozen seafood has doubled in China across the last decade. Billions of dollars’ worth of fresh, frozen, and live seafood makes its way through Chinese ports every year, but moving it to distributors and onto customers is a key concern.
The Supreme Council’s guidelines calls for a significant increase in the use of cold chain to transport perishable foods by 2020, influenced by the massive level of imported produce China relies on to feed its populous.

This includes setting up temperature tracking systems, and improving the logistical infrastructure in major importing regions.

As such, the sky is the limit for manufacturers of chillers, reefer trucks, and assorted logistics equipment and machinery – as well as full transportation service providers to capitalise on rising seafood demand.

Consumption of seafood is only going to get higher in China, and with it an increased need for chilled logistics.

Meet China’s fresh and frozen seafood importers at World Seafood Shanghai (SIFSE)

If you are in the business of chilled transportation, and want to enter a rapidly growing market crying out for international expertise and equipment, then be at World Seafood Shanghai (SIFSE).

Last year’s show attracted 51,829 Chinese seafood professionals, including those looking for transportation services. 

Do not miss out on putting your products in front of a captive, dedicated audience. Get in touch now to book your stand at World Seafood Shanghai (SIFSE), China’s leading fish and seafood exhibition.


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