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Alibaba signs contracts with Danish Crown and JBS

The Chinese e-commerce giant Alibaba has made serious steps into the meat processing market as in Shanghai, huge contracts have been signed with Denmark’s Danish Crown and Brazil’s JBS.

Both meatpackers signed agreements with Alibaba’s subsidiary Win-Chain, the company’s data-driven aggregated global sourcing platform for perishable food. Both meat processors did so at the China International Import Expo (CIIE), held 6-10 November, 2018 in Shanghai, China.

Danish Crown and Alibaba

Danish Crown agreed on weekly deliveries of 250 tonnes of Danish pork from the company’s new factory in China for 5 years. In a press release, the Danish company stated that the agreement is worth at least € 300 million (RMB 2.5 billion). This means that all capacity at its new plant will be used to supply Win-Chain.

Happy faces at the signing of the deal between Danish Crown and Alibaba’s Win-Chain. Photo: Danish Crown
Happy faces at the signing of the deal between Danish Crown and Alibaba’s Win-Chain. Photo: Danish Crown

Danish Crown CEO Jais Valeur commented, “It is fantastic for Danish Crown to land such a big contract with Win-Chain and the Alibaba Group. At one fell swoop, our products will be made available on Win-Chain’s digital platforms and also in the Alibaba-owned supermarket chains throughout the Shanghai region.”

Cooperation since August 2017

Danish Crown has been cooperating closely with the Alibaba Group since the 2 companies signed an agreement in August 2017 on the sales and marketing of Danish Crown products on Alibaba’s Tmall, the largest B2C platform for international and Chinese brands and retailers.

As from summer 2019, this cooperation will be extended to embrace a far wider range of products which will all be processed and packed at the Danish Crown factory in Pinghu outside Shanghai.

What does China’s pork market look like? Read Dr John Strak’s analysis

600 million annual customers

Richard Wang, managing director fresh meat at Win-Chain, said: “Danish produce enjoys an excellent reputation and Danish Crown products already have a large and loyal customer base in China. Danish Crown’s integrated farm-to-fork production ensures produce of a uniformly high quality, and Chinese consumers are also attracted by the strong focus on innovation and sustainability. We look forward to working closely together to bring quality Danish meat products to the over 600 million annual active consumers on Alibaba’s platforms.”

Danish Crown has been successfully exporting pork to China for a number of years, but until now, customers have mostly been Chinese distributors and processing companies. Getting closer to the Chinese consumer is one of the cornerstones of Danish Crown’s strategy.

In spring, Danish Crown broke the ground for the group’s first processing facility in China. The 17,000 m2 new facility will be sited less than 100 km from Shanghai. It has been designed to produce 14,000 tonnes of processed products a year.

China’s pig industry is changing rapidly. Read all about it in our country focus analysis

Meat deal of JBS and Alibaba

Brazil’s JBS, one of the world’s biggest meat producers closed a deal with Alibaba to export animal protein (beef, pork and poultry) in the next 3 years. The deal has a value of US$ 1.5 billion.

The document was signed by Renato Costa, president of JBS Meat Brazil, and Richard Wang, executive of Win-Chain, a subsidiary of Alibaba that is dedicated to the fresh food industry and that coordinates the company’s supply chain.

Packaging, cuts and portions

Mr Costa said, “The signing will significantly expand our beef business and will generate even more value to the Friboi brand, which we launched in China during the CIIE. We develop products with packaging, cuts and portions specially dedicated to the Chinese market.”

Alibaba has launched earlier initiatives related to the pig market. Like pig voice recognition for instance.

The arrangement aims at starting exports in the next 30 days and should build up the largest business already made in this segment between Brazil and China.

Major destination for JBS products

China has been a major destination for JBS products and, under this agreement, JBS expands its business in both the B2C and B2B markets in China, mainly for beef, and further enhances the Friboi brand launched in the country during the CIIE.

JBS’ strategy to grow in Chinese market is focused on meeting the specific demands of local customers. Mr Costa said, “JBS understands the complexity of the Chinese market and has the capacity to produce on a large scale and fully meet local demands.”

JBS is one of the global leaders in the food industry and has around 230,000 employees in more than 15 countries. Worldwide, in over 150 countries, the company has a portfolio of brands, including Friboi, Moy Park, Pilgrim’s Pride, Primo, Seara, Swift and Gold’n Plump, among others.

This article was written together with correspondent Daniel Azevedo.