US Companies Want Share of China's New Year Sales

Thursday, 03 Feb 2011 12:20 PM

 

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Producers of American food and drink have discovered an antidote for post-holiday sales blues in the United States: China's huge, gift-laden celebration of its new year.

The 15-day celebration, known as Chun Jie, or Spring Festival, is China's biggest holiday and a time to gather with relatives, feast and give gifts. Food, clothing and money are traditional presents, but a growing number of Chinese — especially the booming middle class with more money to spare — are choosing gifts from overseas. And what better present to give in China than a tin of American toffee, a Washington apple or a bottle of Tennessee whiskey?

The new year "is a big thing for everybody here in China," said Beijing shopper Wu Shitao, 30, as he debated buying a bottle of Jack Daniel's whiskey. "You can say it's the ultimate holiday of the year. If you don't buy presents for your family and friends now, when else do you do that?"

Since November, U.S. companies have been loading millions of pounds of goods into containers to arrive in time for the winter shopping season and the Feb. 3 advent of the Year of the Rabbit. Nearly all is food or drink marketed by importers and retailers as premium products, often with an air of glamour.

Because it encompasses so many categories, it's hard to quantify the value or amount of items destined to be Chinese gifts. But a few figures give a glimpse of how it's burgeoned:

 • The Distilled Spirits Council of the United States says that while China isn't yet among its top 10 export destinations, liquor shipments have grown 518 percent since 2000, to $6 million, while Hong Kong's thirst rose 471 percent to $12 million.

 • And last year, Brown & Haley candy makers in Tacoma, Wash., shipped some 2 million pounds of Almond Roca — about 16 percent of the privately held company's total output — to China and Hong Kong, and 57 percent of that specifically for the new year.

"China is a remarkable market for us," says Pierson Claire, Brown & Haley president and CEO. "We've been exporting for, well, 60-plus years."

Through an odd bit of serendipity, the buttercrunch toffee has become a Chinese tradition, with shipments growing 20 percent a year, he said.

Washington Gov. Chris Gregoire did her part during a trade mission last fall by handing out samples of Almond Roca in a Shanghai supermarket.

 • Shipments of cherries from the Pacific Northwest soared from 5,500 20-pound boxes a year in 2005 to 950,000 last year, says Keith Hu of Northwest Cherry Growers. A specialty 2-kilo (4.4-pound) box can sell for $30 and up, he said. Because of Washington's summer growing season, its cherries aren't sold during the Spring Festival, but often are for other holidays.

The ancient festival, of course, is celebrated wherever Chinese live. But the scale is entirely different in China with its 1.3 billion people.

Spring Festival triggers the world's largest annual migration of people as they head home to be with family. More shoppers than usual have been crowding Beijing stores, where walls and shelves have been bedecked with "Spring Festival Promotion" banners.

Wang Zishan, 31, pushing a cart full of groceries in a Beijing market, planned to buy more expensive presents this season.

"I got a pay raise this year. So I would like to let my family feel the difference that my pay raise makes," he said.

Especially in bigger cities such as Shanghai and Beijing, such extra money has been good for Western products. Apple Corp. stores are jammed, with reservations needed to buy iPhones. Imported food often is seen as safer than China's, where there are problems in the food chain.

Many U.S. companies and marketing associations launch special promotions with importers, wholesalers and retailers.

Red is considered a lucky color in Chinese culture, good for American products such as apples, cherries, or items in red packaging. Orange, says Sunkist's Clair Smith, also plays well, with oranges from the California-based citrus cooperative sometimes referred to as "nuggets of gold."

On average, she said, Sunkist sells about 600,000 40-pound cartons of navel oranges to retailers and wholesalers for the two-week Spring Festival, about double the usual sales.

The Sunkist name is well-recognized in China "and coming from California is also a cachet," Smith said.

Premium wines, especially French, and some high-end California vintages are given by those who can afford it, but wine drinking hasn't caught on yet with most Chinese, says Linsey Gallagher, director of international marketing at the Wine Institute. The California trade group is trying to change that through trade missions, tastings and other promotions that ramp up for the holidays.

As with Sunkist, marketing "is designed to make the connection with the California lifestyle and wine," she said.

Though U.S. liquor exports to China are tiny compared to the rest of Asia, growth has been huge, says Paula Erickson, spokeswoman for Jim Beam. "One of our biggest categories that do well is cognac," such as Courvoisier, owned by Beam parent Fortune Brands Inc.

Washington apples have long been sold in Hong Kong and were allowed access directly into China in the mid-1990s. Starting in December, the highest-quality Red Delicious apples are packaged in individual wrappers or in red, nine-piece gift boxes with special labeling, says Rebecca Baerveldt Lyons, marketing manager for the Washington Apple Commission.

"We're really fortunate because that is the peak time of our season," she said.

Last year, Washington sent 54 million pounds of apples to Hong Kong and nearly 9 million pounds to the mainland.

Almond Roca has had the good fortune to be associated with good fortune in China. World War II sailors and soldiers from the Puget Sound area first took it to Asia where it quickly caught on. Claire said its pink tins — made a little redder for China sales — and the gold foil used on the candy pieces are symbols of luck and wealth. And the word "roca" translates to "making home full of joy."

"China is without a doubt our favorite country to export to," he said. "These are just lovely people who have a rich heritage and a rich respect for the brand."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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