The food industry is one of the most important sectors of a national economy as well as of the European Union. It is regarded as a traditional sector with low research intensity making innovative food companies an exception. In addition to that, the growing demand by the consumers for healthier products is stimulating the development of a new category of high quality food products. Under this trend of prioritizing quality and health, consumers tend to pay more for high quality food products such as “green food”, low-fat, “organic food”, or functional food products.
Creta Farms, one of the biggest producers of pork meat in Greece with the vision to utilise the best Mediterranean ingredients and create the most delicious and healthy taste experience, was one of the first Greek meat manufacturers to create a plan for entering the Chinese market. Creta Farms with more than 20 years of technological know-how, focusses on unique olive-oil food technology for meat and dairy products and has 20 international patents. After 4 years of research in collaboration with Greek University specialists, the company has developed a special animal feed with olive oil which enhances the welfare of the animals. Additionally, Creta Farms has developed a technology of direct injection of extra virgin olive oil into selected lean meat, producing premium, succulent and extra juicy products with reduced meat fat content.
The role of PRAXI Network
Creta Farms decided to expand to China with its innovative and unique pork meat products. At that time, China was (and still is) the largest pork consumer in the whole world and also the largest pork producer worldwide. The company contacted PRAXI Network to get consultation and support for its expansion to the Chinese pork meat market. PRAXI Network in collaboration with Chinese experts, created an extensive report about China’s pork meat market and proposed a detailed entry strategy The report it-self was aiming to help the company better understand the China pork market, and contained the national and foreign key-players, the main drivers and trends, and a detailed overview of China’s commercial and regulatory environment.
The results of this market analysis were very valuable and helped Creta Farms to decide about the suitable entry market strategy. The report has showed among other, that many market access opportunities have been opened up for global actors. Creta Farms products proved to have a big competitive advantage and added value on the Chinese market, which was the ability to combine the time-saving convenience of processed meat products with the natural olive oil feeding and breeding technologies, which highly improve the quality and the nutritional characteristics of the meat.
Another crucial step for consolidating a robust entry strategy was to investigate the cooperation opportunities with the Chinese stakeholders. PRAXI Network, had a significant role in the internationalization and extroversion activities of Creta Farms. PRAXI Network has organised a company mission in China and has been the liaison between Creta Farms and local stakeholders, such as associations, institutions and firms. The meetings held between Creta Farms and the local stakeholders have significantly helped the company to understand the local environment, as well as the local trends and capabilities and create therefore the most appropriate entry strategy.
The detailed market report and the business trip to China, were enlightening for Creta Farms management. The two main conclusions of the whole initiative were:
- that imported products have the distinct advantage of traceability of origin and ingredients, which is a key feature of the general uncertainty in the domestic market. Even though imported products cannot be delivered as fresh as domestic pork meat, EU’s imported products are more trusted than their domestic ones because of their excellent image. With increasing prosperity in the urban areas and increasing awareness of the importance of a healthy and high protein diet, there is still big growth potential for imported products.
- the second conclusion was that, at that moment, the only possible option for the fresh pork meat was a transfer of technology and know-how, with the production to be based in China.
This would mean that Creta Farms should investigate partnerships with Chinese meat associations to enter the Chinese market.
The Creta Farms story is indicative of how an innovative company can develop its entry strategy to a demanding and very challenging market, as the Chinese, by taking into consideration the potential obstacles and opportunities and by having a reliable collaborator who can help the company in its strategic steps.