TUESDAY 20 MARCH 2018 TIME: 16:00 16:20H GLOBAL BERRY CONGRESS WTC ROTTERDAM Speaker: Oliver Huesmann CEO Fruitconsulting

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1 CHINA - AGRICULTURE - DEMAND - SUPPLIER SUCCESS STORIES What are the possibilities for the fruit and vegetable producers in China TUESDAY 20 MARCH 2018 TIME: 16:00 16:20H GLOBAL BERRY CONGRESS WTC ROTTERDAM Speaker: Oliver Huesmann CEO Fruitconsulting

2 What is the current situation of China in the World Only 10% arable land 1.4 Billion People

3 What happens inside the Chinese Market? The Chinese middle class is very willing to buy imported food. This provides a much higher level of safety than local products. Surveys have shown that only 10% of consumers trust domestically produced food. By 2030 China will be importing 60% of food. The Chinese market is constantly growing and is familiar with products from the EU, Africa Australia or America. The driving force behind this is the growth of the middle class with 50 million people per year, ready to buy imported products. The salary structure in the rest of China, is indicating strong growth. 30 % of the world's middle class will come from China alone.

4 How is the Import Export with China

5 What is the situation of Chinese agriculture? Only 6% water supply for 20% world population. 60 to 80 % of China's groundwater is polluted Urban migration of the farmers Abandonment of agricultural land More than 40 % of China's farmland contaminated Unprofitable agriculture (tomato 45 KG per m2 Netherland and only 3.5 KG per m2 China) China consumes 1/3 of the world's manufactured nitrogen Inadequate training of young farmers in modern and organic farming Hoping for support from abroad to rebuild their own agriculture

6 Geographical division agricultural areas

7 Geographical division agricultural areas BERRIES

8 Agricultural area in relation to population

9 Agricultural area in relation to population Only 80 m2 per Person

10 Shrinking area of cultivated farmland

11 Shrinking area of cultivated farmland Reason for 60% IMPORT?

12 China has a growing appetite!!!

13 Chinese are Consuming More Calories

14 Chinese are Consuming More Calories 2000 kcal or 134% more

15 Chinese are Consuming More Calories

16 What do the Chinese eat? RICE or FRUIT? VS

17 What do the Chinese eat? Changing food choices / Changes in eating habits Rising incomes are one of the forces stoking China's demand for imported food. China's coastal cities brought a marked increase in the standard of living of urban residents, including an appetite for imported food once unaffordable to most Chinese households. Lax food safety standards have produced periodic food scares and boosted demand for imported goods. Cities increasingly attract foreign visitors and expats who retain existing eating habits from home.

18 How do the Chinese want that? EXCLUSIVE

19 How do the Chinese want that? EXCLUSIVE

20 How do the Chinese want that? FOTO ALIBABA FOTO GUANXIN FOTO GOLDEN WING MAO

21 How do the Chinese want that? Jam Cake Production Sweet Juices &Concentrates Dairy Wine Jellys Products for health Snacks Others

22 How do the Chinese want that? The 3 main reasons in their purchase decision are: 1. Packaging 2. the Origin of the product 3. the active ingredients for their health LUXURIOUS - SAFE - HEALTHY

23 How hungry is China for the Fruit & Vegetables? Average consumption of fruits & vegetables per person and year in China is 56 kg of fruit and 120 kg vegetables. This means that China has a total annual consumption of tons of fresh produce. This represents a total freight volume of foot containers. If the forecasts are correct that in only 15 years near 60% of food has to be imported into China, this would mean that by 2030, more than of 40 foot containers or more than 204 Million pallets travel to China.

24 Where do these large numbers of consumers live? The distribution of the purchasing power in China

25 Where do these large numbers of consumers live? We have in China more than 100 cities with more than 5 million Consumers and more 70% of these consumers are currently not regular receiving imported fruits more than 70% of this customers are not regulary

26 How is China's food consumption growing by 2050? Today, many of China's rural households, especially in inland and western regions are still waiting for the benefits of economic reforms to reach them. China s undernourished population rate fell from 24 % in 1990 to 9 % in This will drop to 5% by Food consumption in China will increase 40% by 2030 and continue to grow until 2050.

27 How will China guarantee these fresh fruit quantities? By opening doors for imports and settling new protocols with producing countries. By attracting foreign investment in National agriculture through advertising. By industrial optimization and reconstruction of Chinese agriculture By detoxifying the environment to use the resources more effectively and by then... import

28 What are the opportunities for Fresh Producers in China? The possibility of establishing Companies in China (Import Agency, Commercial Office, Transport Company, etc.) FOC The rental of agricultural fields for cultivation. Subsidies and aid for the restructuring of the agricultural sector, by the Agricultural Bank of China. Also for foreign companies Subsidies and aid for the Distribution and Logistics sector with cold chain.

29 What are the opportunities for Fresh Producers in China? A legal stability with protection of trademarks and patents. A stable economy with low delinquency. China's default rate stands at 1.74% at the end of 2016 Continuously new export agreements closed by the government A market in the hinterland of many millions of new consumers

30 Who are the current successful ones in China? In the berry industry are this the big known companies. These have meanwhile gained shares in the market. Due to food safety, significant amounts of imports are also to be seen. In the Chinese winter time, then come the producers of the southern Hemisphere who introduce their products in China. In addition to, for example, two of the big players like Camposol or Driscoll's, it is mainly smaller Producers from Chile, Peru and Mexico who do a lot of marketing in China and thus have great success. China is a Paradise for medium-sized companies in all areas of fruit and vegetable, trade, cultivation, greenhouse, distribution, etc.

31 RESUME More than People with a growing nutritional awareness Great demand for imported safe and modern food near 60 % of total consumption A constantly growing market with 40% growth rate by tons of annual fruit and vegetable consumption

32 RESUME They love Berries and China is tangible for everyone You just have to consider one rule: Investment - Discipline - Time

33 And I ask you Can we afford not to be in CHINA?

34 Consultants for Fresh Producer & Fresh Logistics