U.S. can capitalize on Chinese orange juice market potential

 

Various Fresh from Florida labeling upon orange juice and citrus containers.

GAINESVILLE, Fla. — Opportunity awaits American and Florida marketers who want to sell 100 percent not from concentrate Florida orange juice in China if they take a cue from American restaurant giants like Kentucky Fried Chicken and Pizza Hut, a new University of Florida study shows.

Zhifeng Gao, an associate professor of food and resource economics at the UF Institute of Food and Agricultural Sciences, led a study in which researchers surveyed shoppers as they entered grocery stores in four major cities in China: Beijing, Shanghai, Zhengzhou and Shenzhen.

After questioning 1,053 consumers, the researchers found Chinese usually will buy an orange juice drink that is made with only 10 percent real juice. They also found that Chinese consumers know little about the benefits of Western-style juice products, such as their high nutritional value.

Two approaches to encourage the Chinese consumer to drink 100 percent not from concentrate (NFC) Florida orange juice are to educate them about its health benefits and to reduce the price, the study shows. For example, a search of www.taobao.com, a website Gao describes as the Chinese equivalent of Ebay, shows the retail price of a 1.75-liter (nearly half a gallon) paper carton of 100 percent NFC orange juice ranges from $8.55 to $12.75 in China.

Researchers also found that although 86 percent of the respondents agreed there’s a difference between “fruit juice” and “fruit juice drink,” about 78 percent didn’t know that most fruit juice products in the Chinese market only have about 10 percent juice content.

These findings are important for American orange juice manufacturers and marketers.

“We can emphasize that Florida is the biggest orange juice producer in the U.S.,” Gao said. “The product is healthy, safe and natural. There are many ways to educate the Chinese, but to make it practical, we need more research to see which approach is more effective in promoting Florida orange juice.”

In 2010, China — the world’s most populous nation at 1.36 billion residents — surpassed Mexico as the second largest market for U.S. agricultural exports, with a value of $15 billion a year, according to the study, published in the journal Agribusiness. That value went up to just under $30 billion in fiscal year 2014, according to the U.S. Department of Agriculture.

With an expanding economy, the Chinese are showing a proclivity for high-fat foods such as dairy, meats and oil, but fewer staples like rice and flour, Gao said. Chinese consumers like Western-style foods, including fine dining and fast-food. The popularity of these foods shows Chinese are willing to change their consumption patterns.

“For the Florida orange juice industry to succeed in the Chinese market, producers and marketers may learn from the success of Kentucky Fried Chicken in China,” Gao said. “KFC’s story in China suggests two things that may contribute to the future success of Florida orange juice in China: advertisement and adaptation.”

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By: Brad Buck, 352-294-3303, bradbuck@ufl.edu

Sources: Zhifeng Gao, 352-392-1826, zfgao@ufl.edu