Selling butter and cheese to the Chinese palate

Karl Long, the energetic 25-year-old from Greystones, Co Wicklow who is leading the campaign to sell Kerrygold butter and cheese…

Karl Long, the energetic 25-year-old from Greystones, Co Wicklow who is leading the campaign to sell Kerrygold butter and cheese to the Chinese, says China can be a land of opportunity but, like anywhere else, you need to be careful.

"Spend time here first before moving in. Don't take anything for granted. We needed distributors and it's worth visiting them yourselves. Check out their facilities. For example, if they say they have 60 square metres of refrigerated storage, check it out," he said.

Selling Kerrygold to the Chinese looks difficult enough on paper. The Chinese eat between seven and 13 kilograms of dairy products per person every year, while a European can eat up to 300 kilograms of dairy a year. China is the world's biggest producer of milk powder but it's just not a dairy country.

However, more wealth is translating into more foreign produce, including once-alien butter and cheese. "It's growing in China at the rate of 20 per cent a year and this is obviously a huge market. Even if we get a tiny fraction of the 1.3 billion people here we'd be delighted," said Long.

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The Irish Dairy Board has been in China for many years doing milk powder and bulk products for the service industry such as bakeries. Since January of this year, it's been pushing Kerrygold brands - 10 products in all, including Blarney gouda and Dubliner strong cheddar, red and white cheddar, cheddar spreads and mozzarella, and then salted and unsalted butter - at scores of outlets around China.

"The single most difficult thing is competition. The Irish Dairy Board sees a huge market here in China, but every other dairy board is thinking the same thing," he said.

"For example, the New Zealand Dairy Board has been here for 20 years. People think of Anchor and Mainland when they think of dairy brands. So we need to create a brand awareness," said Long.

The rise of the fast-food industry in China has done much to push cheese as a product in the country. Kentucky Fried Chicken, McDonald's and Pizza Hut all have cheese somewhere in the mix, and all three are hugely popular.

Long has been in China for 3 ½ years, having come over after the 2002 World Cup in Japan and South Korea to teach business English in Harbin, where he picked up Chinese, before working in logistics in Beijing.

Hired by Pat Ward, brands manager with the dairy board, the DIT Mountjoy Square marketing management graduate has been working for the board in China since October last year, including a couple of weeks training in Dublin, and is based in their agent's office in Beijing.

Working with local Chinese distribution partners, for the moment, the focus is not just on the big cities like Shanghai and Beijing, but Kerrygold is also expanding in Suzhou, Shenzhen, Guangzhou and Chengdu.

Long's Chinese is good and that has helped. "When I meet distributors in some second-tier cities where no one speaks English, my Chinese is an advantage. You might pick up on things that are translated in a different way. But translation works too, of course," he said.

Long also found it useful to get in touch with Enterprise Ireland and the Irish embassy here in Beijing, the consulate in Shanghai and Tourism Ireland before he set up.

Kerrygold was able to tap into a Dutch company called Pacific Dairy Ingredients, which was well-established in China in the dairy ingredients and powders business. It had done bulk business before with the Irish Dairy Board.

"A reliable agent is essential. They can get your products registered here. Any food product has to be registered," he said.

The retail industry is still at a very immature stage of development and there is a lot of red tape.

"There are listing fees from the small store right up to the superstores. Some people are looking for promotional fees, in-store maintenance fees. Once you have your product in-store, you have to provide an ongoing promotional scheme and they have to see that the product is moving," says Long.

And in a superstitious country like China, where gold is revered as a way of investing, as a gift and for making jewellery, having a golden wrapper does no harm when it comes to selling a few pats of butter.