Agriculturally Speaking...MDARD Leading Michigan Ag Businesses on China Trade Mission

By Jessy Sielski, Deputy Public Information Officer, Michigan Department of Agriculture and Rural Development

Building on previous trade missions to China with Governor Rick Snyder, Michigan Department of Agriculture and Rural Development Director Jamie Clover Adams now looks to parlay the department’s relationship-building successes abroad into long-term financial rewards for Michigan businesses, as well as more Michigan jobs.

On November 8, Clover Adams will lead seven Michigan food processing and agriculture companies and one commodity group on a trade mission to Shanghai and Shenzhen, China, where they will spend a week meeting with buyers, touring retail and grocery stores, establishing business relationships, and getting a personal view of Chinese import systems.

“Selling in China is not for the faint of heart, but that’s the whole reason behind this ongoing effort,” said Clover Adams. “Large companies can take care of themselves. What we are trying to do is open a thriving consumer market for small and medium-sized Michigan food producers and companies that otherwise wouldn’t have the resources, expertise, connections, and financial resources necessary to do so on their own.”

One of the things that puts MDARD in a unique position to lead a project like this is its partnership with Food Export Midwest in Chicago. “By working with MDARD and Food Export, Michigan companies can be comfortable knowing that they’re supported by the expertise, resources, market research, and technical information they need to minimize risk and cost,” said Clover Adams. “MDARD and Food Export ensure that potential buyers are vetted, and we help defray the costs associated with missions like this.”

Given the inherent challenges of a small Michigan business selling its products in a country that is more than 7,000 miles away, the benefits of such a venture may not seem obvious, but, as Clover Adams explains, “By the year 2050, the world population is expected to reach nearly 10 billion, and 40 percent of that will be in two countries: China and India. And there are a number of factors that make China a unique opportunity for Michigan businesses.

“First, we have the continued growth of the Chinese middle class. By 2020, the middle class in Eastern China, where we are focusing our efforts, is expected to reach 220 million people. Second, middle class incomes are rising by 10-15 percent each year. So, it’s a tremendous market opportunity. You’re just not going to get that kind of income growth along with the volume of people anywhere else in the world right now.”

During a trip to China in September, which focused on women in agriculture, Clover Adams also saw how women not only continued to be key decision-makers in the kinds of foods and food products that are purchased, but also how their roles in the food industry were evolving, opening up even more opportunities for Michigan businesses. “We met with a ‘women in wine’ group whose members import US wine into Shanghai,” said Clover Adams. “We also had the opportunity to meet with other women who were venturing into restaurants, bagels, coffee and other things. When you look at not just the rate of growth in China but also how things are changing there, the opportunities for Michigan businesses seem limitless. And bringing that revenue back to Michigan will ultimately lead to more jobs here at home.”

This mission to China will be fifth for Clover Adams, who has a clear vision of both short-term and long-term goals with the trade effort. “The Chinese really value guanxi (relationships), and it is critical to doing business there,” she said. “Governor Snyder is well known in the ‘tier one’ cities, and people there understand that he and I are committed to this relationship. That is evident through the creation of the Michigan-China Innovation Center. And all of this is going to start paying dividends for Michigan food and agriculture companies.”

Gaining access to one of the world’s most lucrative consumer markets does not come easy. “One of the biggest challenges of selling in China is the regulatory uncertainty,” said Clover Adams. “When geopolitical issues ramp up, it can have an impact on trade; however, by establishing trust and strong relationships with provincial governments—like we’ve been doing in China—it can help avoid certain obstacles that arise when political issues flare up.”

What makes Michigan food products so desirable to Chinese consumers are quality and safety. “During my earlier trips to China, when I had the opportunity to speak with restaurant owners, it became clear that having access to high quality, safe ingredients was an issue,” said Clover Adams. “One of the things I would like to do is bring a Chinese delegation to Michigan to see first-hand how our products are grown, processed, regulated, and inspected for safety. Then, when something comes from Michigan into one of their ports, they’re going to have that personal connection and be assured that there aren’t going to be any problems.”

Michigan companies participating in the trade mission include Cherry Marketing Institute, Dewitt (tart cherries); Cherry Central Cooperative, Traverse City (fruit juices, frozen fruits, dried fruits: cherries, apples, pomegranates, currants, blueberries, cranberries); Graceland Fruit, Inc., Frankfort (dried fruits: apples, cranberries, blueberries, cherries, carrots, orange peels); Michigan Blueberry Growers/Naturipe, Grand Junction (blueberries, strawberries, raspberries, blackberries); Old World Style Almonds, Beverly Hills (cinnamon roasted almonds, pecans, cashews); Nirvana Tea, Southfield (artisan tea); Shoreline Fruit, Traverse City (fruit juices & dried fruits: cherries, blueberries, cranberries); and Atwater Brewery, Detroit (microbrews).

“The prospect of selling in a country like China can feel intimidating, but MDARD offers a number of ways to test the waters before committing,” said Clover Adams. “We offer international trade seminars for example. And we have buyers missions held right here in Michigan, which gives business owners the opportunity to meet with potential buyers from other countries. It’s not free, but it is low cost, and it does lower the risk and time investment. And when you take into consideration the potential rewards, it’s really a rare business opportunity for Michigan food growers and producers.”