Slow roast to China
Australia has won a stranglehold on the meat import business to China with our beef and lamb now starring on the menus in the country's finest restaurants.
Nearly 4800 tonnes of lamb and beef cuts from more than 150,000 beasts left our shores bound for China last financial year. This is an increase of 1500 per cent from the mid-1990s when just 300 tonnes were exported.
Lured by the prospect of even greater growth to come, top Sydney supplier Vic's Premium Quality Meat has opened in Shanghai.
Australian meat is found in many of Shanghai's world-class restaurants, which have opened during the frenzied growth of the past decade. Among them are Laris, with its gleaming white marble interior, and M on the Bund owned by Australian Michelle Garnaut - the first of the new wave of foreign restaurants on the famous strip along the Huangpu River.
In Beijing, Australian meat is the choice of the four- and five-star hotels sprouting as fast as the old hutong neighbourhoods are being demolished.
By tackling illegal meat smugglers and often primitive cold storage and transportation, at least five Australian companies are reaping rich rewards for several decades of intensive groundwork. The trade is aided by the Chinese embargo on meat imports from the US.
Australian companies are expanding their efforts from hotels and restaurants into the now ubiquitous supermarket chains catering for the unstoppable march of the Chinese middle class.
The opportunities for growth are rosy as Australian companies expand operations to the so-called second-tier cities; places such as Guangzhou and Xi'an, where demand for premium meat products is growing.
The meat trade is still second to the longstanding "rocks and crops" staples of Australian exports, says Julie-Anne Nichols from Austrade in Shanghai. "But it is growing and becoming a tremendously important area," she says.
Nichols credits the success of the Australian companies to the years they have spent investing in China and, most importantly, getting people on the ground.
"The companies have put huge investment into training, staff and operations. They have done the hard yards and it is paying off," Nichols says.
"They have been innovative, taken the market seriously and been prepared to stick at it for the long term."
Nichols says doing business in China is all about relationships and Australians have recognised this.
Tim Leviny, the general manager of Elders in China, moved with his wife and two sons to Shanghai six months ago. It has been an extraordinary journey for all.
"We walk out the front door where we live and we are in the heart of old Shanghai - there are people cooking on the side of the road, living in brick huts. It's amazing," Leviny says, "but it can be a tough city to get some things done. We needed 15 people to come and fix our internet and five people to come to our house to tell us what we already knew, that our washing machine was broken."
Elders bought an existing business in China four years ago and has been steadily ramping it up, freighting in vacuum-packed cuts and slicing and dicing them into steak, burgers and sausages then delivering them to four- and five-star hotels, restaurants and supermarkets. It is prime-quality meat, grass or grain fed with substantial marbling.
Leviny says this is becoming a "maturish" market and Elders is targeting the supermarket chains and selling over the internet for future growth. Foreign supermarket chains are expanding their dominance, encroaching on the roadside stalls and wet markets where the Chinese have customarily bought their produce.
When Nichols arrived in Shanghai four years ago, she says, it was extremely tough to buy a good steak.
"At my local Carrefour [supermarket] you used to be lucky to get Australian meat at all and it was usually the cheaper cuts; strips to use in stir-fry, that sort of thing. Now I can go to many supermarkets and find great Australian rib eye and fillets," she says.
Leviny says Elders is not just targeting expatriates in the supermarkets - it is after the expanding ranks of cashed-up locals.
Figures obtained by Austrade from the Economist Intelligence Unit, show the average consumption of meat in China in 2004 was 58 kilograms a person a year. Last year it was 64kg and this year it is predicted to be 67kg. The Australian figure is 120kg.
"Chinese people are very much aware of the food safety concerns of some of the local meat," Leviny says. "So if they can afford Australian meat, increasingly they will buy it."
Nichols agrees that a growing awareness of food safety is a "huge issue" in China.
"This new middle class is well educated, internet savvy and they know that local food is not as safe as it should be. So when they are shopping for their precious little child, they are starting to see Australian produce as a better option," she says.
Michael Lin, the managing director of one of the largest Australian players in China, Taste Plus, says his company has seen growth of between 15 and 20 per cent a year since it started importing meat into Beijing and Shanghai eight years ago. He says much of this growth will now come from the scores of smaller cities, such as Hangzhou, south-west of Shanghai, where hundreds of new hotels and restaurants are appearing.
Getting the meat to these places is not without its challenges, Lin says.
One of the biggest problems Australian companies face is China's transport and distribution systems.
"The companies we use to distribute the meat are often one-man [operations] with low-cost standards," Lin says.
All the Australians say they have difficulty finding local transport companies with an adequate understanding and capability of storing, cooling and distributing it properly.
"We have also battled with meat smuggling; beef coming in through 'grey channels' and not having to pay any duty. The government is cracking down on this, though, and we have seen a big difference," he says.
Some of the smuggled meat was American beef, which has been banned from China since December 2003, says Butch Walter, manager of Fineline Foods China.
"Australia has made the most of this and is without doubt the market leader in premium cut meat in China, with New Zealand second," Walter says.
He arrived in Shanghai 18 years ago where he set up a butcher's shop in the Hilton Hotel. "You couldn't buy smallgoods at all in Shanghai, no bacon; nothing."
Now you can buy "ultra premium lamb", which is hard to come by in Australia. Aurora Lamb is the newest entrant to the Chinese meat market.
It started bringing its 60-day grain-fed lamb into Shanghai in March. Aurora's Samantha Roughley says the company sends 80 per cent of its Tasmanian-grown meat offshore (not just to China, but also to Russia and Thailand). "Our lamb is twice as expensive as anything else on the market. And we are getting support for it. At first it was patchy; chefs would put it on as specials but now business is much more regular," she says.
Hamish Pollitt, chef at M on the Bund, has it permanently on his menu in a salt-crusted lamb dish, which is one of his signatures.
"Obviously being an Aussie working in China, there is a touch of pride in using home-grown products but most importantly we know exactly what standard we are getting and where it is coming from," Pollitt says.
"I think there is even more opportunity for some of the smaller specialty growers, such as Aurora and wagyu suppliers, to promote and sell their products here."
Leviny, describing a recent awards ceremony for the food and beverage industry in Shanghai, says it was amazing how many Australian chefs, restaurant and bar managers and hotel heads attended - and scooped - the awards.
From the raw product - the ribs, racks, rumps and fillets - to the garnished meal on the plate, "it really is a case of Australia feeding Asia", he adds.
"We walk out the front door where we live and we are in the heart of old Shanghai - there are people cooking on the side of the road, living in brick huts. It's amazing," Leviny says, "but it can be a tough city to get some things done. We needed 15 people to come and fix our internet and five people to come to our house to tell us what we already knew, that our washing machine was broken."
Elders bought an existing business in China four years ago and has been steadily ramping it up, freighting in vacuum-packed cuts and slicing and dicing them into steak, burgers and sausages then delivering them to four- and five-star hotels, restaurants and supermarkets. It is prime-quality meat, grass or grain fed with substantial marbling.
Leviny says this is becoming a "maturish" market and Elders is targeting the supermarket chains and selling over the internet for future growth. Foreign supermarket chains are expanding their dominance, encroaching on the roadside stalls and wet markets where the Chinese have customarily bought their produce.
When Nichols arrived in Shanghai four years ago, she says, it was extremely tough to buy a good steak.
"At my local Carrefour [supermarket] you used to be lucky to get Australian meat at all and it was usually the cheaper cuts; strips to use in stir-fry, that sort of thing. Now I can go to many supermarkets and find great Australian rib eye and fillets," she says.
Leviny says Elders is not just targeting expatriates in the supermarkets - it is after the expanding ranks of cashed-up locals.
Figures obtained by Austrade from the Economist Intelligence Unit, show the average consumption of meat in China in 2004 was 58 kilograms a person a year. Last year it was 64kg and this year it is predicted to be 67kg. The Australian figure is 120kg.
"Chinese people are very much aware of the food safety concerns of some of the local meat," Leviny says. "So if they can afford Australian meat, increasingly they will buy it."
Nichols agrees that a growing awareness of food safety is a "huge issue" in China.
"This new middle class is well educated, internet savvy and they know that local food is not as safe as it should be. So when they are shopping for their precious little child, they are starting to see Australian produce as a better option," she says.
Michael Lin, the managing director of one of the largest Australian players in China, Taste Plus, says his company has seen growth of between 15 and 20 per cent a year since it started importing meat into Beijing and Shanghai eight years ago. He says much of this growth will now come from the scores of smaller cities, such as Hangzhou, south-west of Shanghai, where hundreds of new hotels and restaurants are appearing.
Getting the meat to these places is not without its challenges, Lin says.
One of the biggest problems Australian companies face is China's transport and distribution systems.
"The companies we use to distribute the meat are often one-man [operations] with low-cost standards," Lin says.
All the Australians say they have difficulty finding local transport companies with an adequate understanding and capability of storing, cooling and distributing it properly.
"We have also battled with meat smuggling; beef coming in through 'grey channels' and not having to pay any duty. The government is cracking down on this, though, and we have seen a big difference," he says.
Some of the smuggled meat was American beef, which has been banned from China since December 2003, says Butch Walter, manager of Fineline Foods China.
"Australia has made the most of this and is without doubt the market leader in premium cut meat in China, with New Zealand second," Walter says.
He arrived in Shanghai 18 years ago where he set up a butcher's shop in the Hilton Hotel. "You couldn't buy smallgoods at all in Shanghai, no bacon; nothing."
Now you can buy "ultra premium lamb", which is hard to come by in Australia. Aurora Lamb is the newest entrant to the Chinese meat market.
It started bringing its 60-day grain-fed lamb into Shanghai in March. Aurora's Samantha Roughley says the company sends 80 per cent of its Tasmanian-grown meat offshore (not just to China, but also to Russia and Thailand). "Our lamb is twice as expensive as anything else on the market. And we are getting support for it. At first it was patchy; chefs would put it on as specials but now business is much more regular," she says.
Hamish Pollitt, chef at M on the Bund, has it permanently on his menu in a salt-crusted lamb dish, which is one of his signatures.
"Obviously being an Aussie working in China, there is a touch of pride in using home-grown products but most importantly we know exactly what standard we are getting and where it is coming from," Pollitt says.
"I think there is even more opportunity for some of the smaller specialty growers, such as Aurora and wagyu suppliers, to promote and sell their products here."
Leviny, describing a recent awards ceremony for the food and beverage industry in Shanghai, says it was amazing how many Australian chefs, restaurant and bar managers and hotel heads attended - and scooped - the awards.
From the raw product - the ribs, racks, rumps and fillets - to the garnished meal on the plate, "it really is a case of Australia feeding Asia", he adds.
Australia has won a stranglehold on the meat import business to China with our beef and lamb now starring on the menus in the country's finest restaurants.
Nearly 4800 tonnes of lamb and beef cuts from more than 150,000 beasts left our shores bound for China last financial year. This is an increase of 1500 per cent from the mid-1990s when just 300 tonnes were exported.
Lured by the prospect of even greater growth to come, top Sydney supplier Vic's Premium Quality Meat has opened in Shanghai.
Australian meat is found in many of Shanghai's world-class restaurants, which have opened during the frenzied growth of the past decade. Among them are Laris, with its gleaming white marble interior, and M on the Bund owned by Australian Michelle Garnaut - the first of the new wave of foreign restaurants on the famous strip along the Huangpu River.
In Beijing, Australian meat is the choice of the four- and five-star hotels sprouting as fast as the old hutong neighbourhoods are being demolished.
By tackling illegal meat smugglers and often primitive cold storage and transportation, at least five Australian companies are reaping rich rewards for several decades of intensive groundwork. The trade is aided by the Chinese embargo on meat imports from the US.
Australian companies are expanding their efforts from hotels and restaurants into the now ubiquitous supermarket chains catering for the unstoppable march of the Chinese middle class.
The opportunities for growth are rosy as Australian companies expand operations to the so-called second-tier cities; places such as Guangzhou and Xi'an, where demand for premium meat products is growing.
The meat trade is still second to the longstanding "rocks and crops" staples of Australian exports, says Julie-Anne Nichols from Austrade in Shanghai. "But it is growing and becoming a tremendously important area," she says.
Nichols credits the success of the Australian companies to the years they have spent investing in China and, most importantly, getting people on the ground.
"The companies have put huge investment into training, staff and operations. They have done the hard yards and it is paying off," Nichols says.
"They have been innovative, taken the market seriously and been prepared to stick at it for the long term."
Nichols says doing business in China is all about relationships and Australians have recognised this.
Tim Leviny, the general manager of Elders in China, moved with his wife and two sons to Shanghai six months ago. It has been an extraordinary journey for all.
"We walk out the front door where we live and we are in the heart of old Shanghai - there are people cooking on the side of the road, living in brick huts. It's amazing," Leviny says, "but it can be a tough city to get some things done. We needed 15 people to come and fix our internet and five people to come to our house to tell us what we already knew, that our washing machine was broken."
Elders bought an existing business in China four years ago and has been steadily ramping it up, freighting in vacuum-packed cuts and slicing and dicing them into steak, burgers and sausages then delivering them to four- and five-star hotels, restaurants and supermarkets. It is prime-quality meat, grass or grain fed with substantial marbling.
Leviny says this is becoming a "maturish" market and Elders is targeting the supermarket chains and selling over the internet for future growth. Foreign supermarket chains are expanding their dominance, encroaching on the roadside stalls and wet markets where the Chinese have customarily bought their produce.
When Nichols arrived in Shanghai four years ago, she says, it was extremely tough to buy a good steak.
"At my local Carrefour [supermarket] you used to be lucky to get Australian meat at all and it was usually the cheaper cuts; strips to use in stir-fry, that sort of thing. Now I can go to many supermarkets and find great Australian rib eye and fillets," she says.
Leviny says Elders is not just targeting expatriates in the supermarkets - it is after the expanding ranks of cashed-up locals.
Figures obtained by Austrade from the Economist Intelligence Unit, show the average consumption of meat in China in 2004 was 58 kilograms a person a year. Last year it was 64kg and this year it is predicted to be 67kg. The Australian figure is 120kg.
"Chinese people are very much aware of the food safety concerns of some of the local meat," Leviny says. "So if they can afford Australian meat, increasingly they will buy it."
Nichols agrees that a growing awareness of food safety is a "huge issue" in China.
"This new middle class is well educated, internet savvy and they know that local food is not as safe as it should be. So when they are shopping for their precious little child, they are starting to see Australian produce as a better option," she says.
Michael Lin, the managing director of one of the largest Australian players in China, Taste Plus, says his company has seen growth of between 15 and 20 per cent a year since it started importing meat into Beijing and Shanghai eight years ago. He says much of this growth will now come from the scores of smaller cities, such as Hangzhou, south-west of Shanghai, where hundreds of new hotels and restaurants are appearing.
Getting the meat to these places is not without its challenges, Lin says.
One of the biggest problems Australian companies face is China's transport and distribution systems.
"The companies we use to distribute the meat are often one-man [operations] with low-cost standards," Lin says.
All the Australians say they have difficulty finding local transport companies with an adequate understanding and capability of storing, cooling and distributing it properly.
"We have also battled with meat smuggling; beef coming in through 'grey channels' and not having to pay any duty. The government is cracking down on this, though, and we have seen a big difference," he says.
Some of the smuggled meat was American beef, which has been banned from China since December 2003, says Butch Walter, manager of Fineline Foods China.
"Australia has made the most of this and is without doubt the market leader in premium cut meat in China, with New Zealand second," Walter says.
He arrived in Shanghai 18 years ago where he set up a butcher's shop in the Hilton Hotel. "You couldn't buy smallgoods at all in Shanghai, no bacon; nothing."
Now you can buy "ultra premium lamb", which is hard to come by in Australia. Aurora Lamb is the newest entrant to the Chinese meat market.
It started bringing its 60-day grain-fed lamb into Shanghai in March. Aurora's Samantha Roughley says the company sends 80 per cent of its Tasmanian-grown meat offshore (not just to China, but also to Russia and Thailand). "Our lamb is twice as expensive as anything else on the market. And we are getting support for it. At first it was patchy; chefs would put it on as specials but now business is much more regular," she says.
Hamish Pollitt, chef at M on the Bund, has it permanently on his menu in a salt-crusted lamb dish, which is one of his signatures.
"Obviously being an Aussie working in China, there is a touch of pride in using home-grown products but most importantly we know exactly what standard we are getting and where it is coming from," Pollitt says.
"I think there is even more opportunity for some of the smaller specialty growers, such as Aurora and wagyu suppliers, to promote and sell their products here."
Leviny, describing a recent awards ceremony for the food and beverage industry in Shanghai, says it was amazing how many Australian chefs, restaurant and bar managers and hotel heads attended - and scooped - the awards.
From the raw product - the ribs, racks, rumps and fillets - to the garnished meal on the plate, "it really is a case of Australia feeding Asia", he adds.
"We walk out the front door where we live and we are in the heart of old Shanghai - there are people cooking on the side of the road, living in brick huts. It's amazing," Leviny says, "but it can be a tough city to get some things done. We needed 15 people to come and fix our internet and five people to come to our house to tell us what we already knew, that our washing machine was broken."
Elders bought an existing business in China four years ago and has been steadily ramping it up, freighting in vacuum-packed cuts and slicing and dicing them into steak, burgers and sausages then delivering them to four- and five-star hotels, restaurants and supermarkets. It is prime-quality meat, grass or grain fed with substantial marbling.
Leviny says this is becoming a "maturish" market and Elders is targeting the supermarket chains and selling over the internet for future growth. Foreign supermarket chains are expanding their dominance, encroaching on the roadside stalls and wet markets where the Chinese have customarily bought their produce.
When Nichols arrived in Shanghai four years ago, she says, it was extremely tough to buy a good steak.
"At my local Carrefour [supermarket] you used to be lucky to get Australian meat at all and it was usually the cheaper cuts; strips to use in stir-fry, that sort of thing. Now I can go to many supermarkets and find great Australian rib eye and fillets," she says.
Leviny says Elders is not just targeting expatriates in the supermarkets - it is after the expanding ranks of cashed-up locals.
Figures obtained by Austrade from the Economist Intelligence Unit, show the average consumption of meat in China in 2004 was 58 kilograms a person a year. Last year it was 64kg and this year it is predicted to be 67kg. The Australian figure is 120kg.
"Chinese people are very much aware of the food safety concerns of some of the local meat," Leviny says. "So if they can afford Australian meat, increasingly they will buy it."
Nichols agrees that a growing awareness of food safety is a "huge issue" in China.
"This new middle class is well educated, internet savvy and they know that local food is not as safe as it should be. So when they are shopping for their precious little child, they are starting to see Australian produce as a better option," she says.
Michael Lin, the managing director of one of the largest Australian players in China, Taste Plus, says his company has seen growth of between 15 and 20 per cent a year since it started importing meat into Beijing and Shanghai eight years ago. He says much of this growth will now come from the scores of smaller cities, such as Hangzhou, south-west of Shanghai, where hundreds of new hotels and restaurants are appearing.
Getting the meat to these places is not without its challenges, Lin says.
One of the biggest problems Australian companies face is China's transport and distribution systems.
"The companies we use to distribute the meat are often one-man [operations] with low-cost standards," Lin says.
All the Australians say they have difficulty finding local transport companies with an adequate understanding and capability of storing, cooling and distributing it properly.
"We have also battled with meat smuggling; beef coming in through 'grey channels' and not having to pay any duty. The government is cracking down on this, though, and we have seen a big difference," he says.
Some of the smuggled meat was American beef, which has been banned from China since December 2003, says Butch Walter, manager of Fineline Foods China.
"Australia has made the most of this and is without doubt the market leader in premium cut meat in China, with New Zealand second," Walter says.
He arrived in Shanghai 18 years ago where he set up a butcher's shop in the Hilton Hotel. "You couldn't buy smallgoods at all in Shanghai, no bacon; nothing."
Now you can buy "ultra premium lamb", which is hard to come by in Australia. Aurora Lamb is the newest entrant to the Chinese meat market.
It started bringing its 60-day grain-fed lamb into Shanghai in March. Aurora's Samantha Roughley says the company sends 80 per cent of its Tasmanian-grown meat offshore (not just to China, but also to Russia and Thailand). "Our lamb is twice as expensive as anything else on the market. And we are getting support for it. At first it was patchy; chefs would put it on as specials but now business is much more regular," she says.
Hamish Pollitt, chef at M on the Bund, has it permanently on his menu in a salt-crusted lamb dish, which is one of his signatures.
"Obviously being an Aussie working in China, there is a touch of pride in using home-grown products but most importantly we know exactly what standard we are getting and where it is coming from," Pollitt says.
"I think there is even more opportunity for some of the smaller specialty growers, such as Aurora and wagyu suppliers, to promote and sell their products here."
Leviny, describing a recent awards ceremony for the food and beverage industry in Shanghai, says it was amazing how many Australian chefs, restaurant and bar managers and hotel heads attended - and scooped - the awards.
From the raw product - the ribs, racks, rumps and fillets - to the garnished meal on the plate, "it really is a case of Australia feeding Asia", he adds.
