Little Can Adventures

A can of yellow peaches, a box of luncheon meat, a can of eight-treasure porridge... Canned food has become commonplace in the lives of Chinese people, even somewhat unremarkable.

But the story of canned food is not necessarily familiar to most people: this seemingly very traditional food processing industry is actually one of the earliest in China to integrate with the international community; a small box of Chinese canned food has already been sold to nearly 200 countries and regions; canned food was originally an "imported product", but China has been the world's largest producer and exporter for many years.

In 2022, China's canned food exports reached a new high in recent years. From the perspective of foreign trade, among the thousands of industries that China exports, there are many similar "less visible" traditional industries that have made long-term and stable contributions. How have they managed to maintain their footing and advantages in the face of many years of fierce competition in the international market?

Let's take a look at the insights from small cans.

"Made in China" canned food has a solid reputation in Europe and America, with exports reaching a new high in nearly six years in 2022.

From 2019 to 2022, exports increased by more than 20% - this is the achievement of canned food exports from Chenzi Trade Co., Ltd. in Zhangzhou City, Fujian Province. Unlike many canned food production companies, this company started in 2003 with international trade in canned food, and now its products are sold to 145 countries and regions, with mushrooms, lychees, corn, sardines and mackerel canned food as its flagship products.

Why canned food? Why not other trades?

"In many places abroad, I've observed that canned food generally accounts for 20% to 30% of consumers' shopping carts, making it a very high-frequency daily consumer product for families." Chen Junxing, chairman of Zhangzhou Chenzi Trade Co., Ltd., said this was the source of his inspiration for selecting trade products.

Compared with the domestic market, canned food remains a common choice for many families and individuals in Europe and America today. According to statistics from the "Thirteenth Five-Year Plan" period by the China Canned Food Industry Association, the per capita annual consumption of traditional canned food in China is about 5.5 kilograms. However, third-party data provided by the association shows that Europe accounts for 7 of the top ten countries in global canned food consumption, with Sweden ranking first, with a per capita annual consumption of 33.4 kilograms, while the UK, Portugal, France, Belgium and the United States consume 21-23 kilograms. This also explains why many European and American families have a can opener in every household.

In fact, canned food was originally an imported product symbolizing high-end consumption in China. In the 1950s, China exported canned food for the first time, starting with a small amount of fruit canned food, with varieties and quantities increasing year by year. Currently, China is the world's largest producer and exporter of canned food, accounting for about 1/4 of the global output, and its products are exported to nearly 200 countries and regions around the world.

"Although canned food is a traditional food processing industry, it is one of the earliest industries in China to integrate with the international community, and it has long been export-oriented, playing an important role in foreign exchange earnings in the past and in stabilizing foreign trade today." Liu Youqian, chairman of the China Canned Food Industry Association, said.

Zhejiang Taizhou Yiguan Food Co., Ltd. is an "old brand" among fruit canned food companies. More than 90% of the company's main orange, yellow peach, and loquat canned products are exported, with Japan, the United States, and Western European countries and regions as the main markets. "Since the epidemic, exports in various categories and regions have fluctuated, but the overall situation has remained stable, with annual exports reaching US$90 million." Huang Hongge, general manager of the company, said.

Orange canned food is a "star" product in China's canned food export list. Huang Hongge introduced that the global export volume of orange canned food is about 350,000-400,000 tons, while China's export volume has remained above 250,000 tons for many years. "Relying on the advantages of raw materials and production processing brought about by the development of the citrus industry, Chinese enterprises have quickly emerged among global competitors."

China's exported asparagus canned food accounts for 70% of the global export total; tomato canned food production ranks among the top in the world; braised pork and canned mackerel are unique to China... China has many canned food products that rank among the best in the world. In 2022, China's canned food exports reached 3.125 million tons, with export value reaching US$6.89 billion, both setting new highs in the past six years. "China is rich in resources, canned food production increases year by year, and the quality and reputation are excellent, and the price still has a comparative advantage, which has created favorable conditions for exports." Liu Youqian said.

Continuous technological innovation and the search for suitable paths have allowed Chinese companies, as "latecomers", to continuously accumulate advantages.

Established in 2000, before the epidemic, 85% of Ningbo Today Food Co., Ltd.'s products were exported to international markets, with annual exports reaching 700-800 million yuan - Ningbo Today Food Co., Ltd. is a large tuna processing and production enterprise, and its chairman, Chen Yifang, has witnessed the company's development along with the industry. "Processing and production are stable, market demand is large, and development has been rapid in the past 10 years." Chen Yifang said.

Food processing enterprises are highly dependent on raw materials, and the development of China's distant-water fishing industry has brought significant opportunities to enterprises like theirs. "Before tuna processing, it must go through fishing, transportation, and port unloading. Chinese vessels have new equipment and good freezing conditions, ensuring the freshness of raw materials and providing quality assurance for processed products." Chen Yifang said that the combination of industrial advantages, logistics and infrastructure advantages, and price advantages has created fertile ground for the development of the enterprise.

If we look at the more than 200-year history of the canned food industry, Chinese enterprises are "latecomers." How did they win "a place" and accumulate advantages?

——Through continuous technological innovation. Peeling and segmenting oranges, halving and pitting yellow peaches... Canned food processing is a typical labor-intensive industry, with a large demand for labor, and also faces the challenge of rising costs, but technological innovation has brought about change.

"Initially, China imported citrus peelers from Spain, but they were not suitable because of the different varieties of citrus fruits in China and abroad. We cooperated with scientific research units and focused on research and development for more than ten years, and finally developed automatic peeling equipment suitable for Chinese citrus fruits. In the past two years, the level of automation and intelligence in processing procedures such as citrus segmentation has also been continuously improved." Huang Hongge said that 10 years ago, it took 4,000 workers 90 days to produce 20,000 tons of orange canned food, but now, with the same 90 days, 2,000 workers can produce 30,000 tons.

"Automated production and intelligent manufacturing have spread rapidly in the canned food industry." Liu Youqian said, "During the Thirteenth Five-Year Plan period, the industry basically achieved automated processes for major varieties, which not only improved the production efficiency of enterprises, but also expanded production capacity and saved labor costs."

——Relying on solid industry accumulation. In international trade, the trade pattern of a region and a category will not be easily changed, but Chinese enterprises can always find suitable paths and opportunities.

Chenzi Trading Company started with international trade and then chose a market path contrary to the "mainstream": starting from the Asian, African, and Latin American markets, gradually accumulating and solidifying its presence in places less touched by major leading enterprises. "First, ensure product taste and quality, make the cost-performance ratio high, then try in small quantities, and once an opportunity arises, seize it immediately." This is Chen Junxing's experience in market expansion over the years. There are many successful examples: some due to disasters leading to local supply chain disruption, some due to factory closures because of the pandemic, some due to trade barrier restrictions. Various unforeseen events forced major importers to seek alternative suppliers. "Relying on our strong industrial foundation and supply chain capabilities, we immediately digested orders and 'took over' the market," said Chen Junxing.

Focusing on the long term and being fully prepared, Chinese enterprises are welcoming opportunities.

Targeting emerging consumption trends and developing new products, more and more companies are starting to consider branding.

China is a major canned food manufacturing and exporting country, but not a strong brand nation – this judgment represents the clear consensus of the entire industry. "Many manufacturers are OEM processors for foreign canned food brands, focusing on production and products, with insufficient market demand orientation and brand building," said Liu Youqian.

More and more companies are starting to consider branding. Three years ago, Chenzi Trading Company made another decision: to invest in physical enterprises and develop products, preparing to integrate into the domestic market's grand circulation. That is to say, a trading company started its own factory. Chen Junxing found that the overall foreign market is relatively stable, and it is more difficult for innovative products and brands developed by China to enter, but the domestic market is willing to accept innovation, with many changes and opportunities, which provides new ideas for enterprises. "We first aim at technological innovation and emerging consumption trends, develop and test new products for the domestic market, and then introduce more mature innovative products to the international market along the accumulated foreign trade channels, which might be our way to break through."

Jinri Food also began to focus on the domestic market, paying more attention to brand building. Chen Yifang said that currently, the company is developing tuna products that suit the taste of the Chinese people, improving packaging forms, and gradually moving towards deep processing of products. For example, for a long time, fish oil exported from China to foreign countries has been refined domestically, but after being exported and branded with international labels, it is eventually sold back to China.

"Now everyone is increasingly realizing that ultimately, we must build our own brands and increase added value," said Chen Yifang. In the past, it was impossible to directly access overseas markets, but now the vast domestic market provides opportunities to forge products and brands. Isn't this an important step for further breakthroughs in the international market in the future?

What excites many canned food enterprises is that with the rise of pre-prepared foods, the canned food industry in the Chinese market has ushered in a long-awaited opportunity – because the most important sterilization and sealing steps in canned food processing are crucial in the standardized production of pre-prepared foods. Since the pandemic, the emergency reserve function of canned foods has also received more attention from consumers. More and more canned food companies have started producing canned Chinese dishes and nutritional health canned foods, and the packaging forms of canned foods have also shifted from cans and tins to plastic packaging, pouches, and paper packaging...

"If pre-prepared foods are done well, the market prospects are broad, and there is great potential in the international market," said Liu Youqian.

Before the interview, Chen Junxing received the latest data: in less than a month this year, one of the company's new products had sold over 2 million yuan through new retail channels, which greatly boosted everyone's morale. "Now that we've also caught the wave of pre-prepared foods, we're truly confident!"