The company opened a sales office in Qingdao in its 2014/2015 financial year, in which it reported a record profit, with increasing frozen seafood sales in retail a target, CEO Mikael Thinghuus told.
“We have had activities in China for a number of years, production and quality control, but also wholesale sales on a large scale. What we are talking about now is a sales office, directed to retail,” he said.
The company is currently in Chinese retail with a few products based on the European assortment and packaging design, said Hanne Kvist, director of group market development and marketing.
Royal Greenland has an expanded range in the works.
“We are finalizing the assortment targeted at Chinese retail, but designs will not be revealed prior to launch. Key items will be based on coldwater shrimp and Greenland halibut,” she told.
The timing is right for such a launch and focus, said Thinghuus.
“My perception at least, is the Chinese retail market for frozen fish has changed quite a lot in the past four or five years. Some of our colleagues do a very good job on the frozen fish category on frozen fish. We think this is the right time to make this investment,” he told.
The company’s 2014/2015 report states the sales office is focusing “exclusively on sales to retailers, and ultimately sales to consumers via e-commerce”.
The 2014/2015 financial year has been used to prepare for the future retail sales by establishing the company, recruiting staff and developing the range, the report states.
This is due to rising demand for Royal Greenland’s products in China and Taiwan, “which has resulted in increasing prices, to the benefit of both the company and the fishermen”, the report continues.
The report notes that “Greenland halibut is a popular food in China”, and cuts of halibut can be found in most supermarkets in the northeastern part of the country.
The increased sales to the retail segment have compensated for the slowdown in dining out.
Royal Greenland’s ambition is “to establish itself as a strong brand in the awareness of Chinese consumers – and there seems to be considerable potential at the affluent end of the market, where there is a great demand for imported food”, the report states.
In connection with this move, Zhifa Zhang, known as Tony, has been hired as sales manager responsible for retail sales, the report states.
“We will make more hires, we already have made couple,” said Thinghuus.
The sales team in China “work closely” with the company’s production and quality organization, sitting in the same offices in Qingdao, he said.
Zhang will be working closely with Finn Laursen, sales director of Royal Greenland International, the report states.
The company’s market development and marketing department in Svenstrup, Denmark “will draw up packaging and marketing plans for the Chinese market in cooperation with Chinese advertising agencies”, the report continues.
In the 2014/2015 financial year, Royal Greenland for the first time achieved revenues of DKK 1 billion in Asia.
Around half of this is attributable to the sales office in Japan, while the other half was achieved through sales by Royal Greenland International in China and other Asian countries, according to the report.
The revenue growth of 18% was driven by price increases for the main species of Greenland halibut, shell-on coldwater shrimp and snow crab, the company said.
The total growth in volume terms is only just below 1%. Asia now represents 23% of group revenue.
In Japan, it remains difficult to increase sales in the wake of the many price increases, which were a necessary consequence of the devaluation of the Japanese Yen, but sales in local-currency have risen steadily, while earnings in the market are increasing.
