Source: Tom Johnston, MEATINGPLACE, 11/6/18


Brazil’s JBS Group and Denmark’s Danish Crown agreed today to a collective $1.9-billion deal to supply Chinese e-commerce giant Alibaba Group’s Win Chain.

Win Chain said in a news release it will purchase $1.5 billion of products from JBS over the next three years, marking the largest-ever import order between China and Brazil. And Win Chain will purchase up to $400 million of product from Danish Crown over the next five years, marking Danish Crown’s first direct-to-consumer step into China.  

Win-Chain signed the contracts with JBS and Danish Crown today at the CIIE-exhibition in Shanghai.

As part of the partnership, Win Chain will provide JBS with Chinese market channel sales, cold chain distribution, commodity brand co-establishment plans, and big data support.

Win Chain’s contract with Danish Crown, meanwhile, expands on an earlier agreement the two sides reached in May, which has Win Chain buying the full capacity of Danish Crown’s processing plant that is currently under construction near Shanghai. The 17,000-square-meter plant will produce 14,000 metric tons of processed products per year.

Apart from sales and marketing trade, the deal expands to the realms of processing, packaging, cold chain, branding and data to help transform Danish Crown from a raw material supplier to a brand in China.

“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," Danish Crown CEO Jais Valeur said in his company’s release on the news.

Danish Crown has exported pork to China for years, but until now customers have mostly been Chinese distributors and processing companies. Changing consumption patterns in China have allowed the company to execute on its strategy to get closer to the Chinese consumer, he said.

“The Chinese market is evolving very rapidly at the moment, and there are actually three things happening all at once. First, e-commerce is exploding, with consumers buying the products they want online and having them delivered to their front door only a few hours later. In my view, Shanghai now has the world’s most advanced market for e-commerce. Next, instead of buying fresh meat at the so-called 'wet markets’, consumers have started purchasing retail-packed products in the supermarkets, in exactly the same way that we shop in Denmark. Finally, a growing number of Chinese are eating out, similar to the trend we are seeing in the U.S. and Europe. We are now moving further up in the value chain in China, and I see significant potential in this,” Valeur said.

Since the launch of the "grand import" strategy in March this year, Alibaba has arrived at a number of cooperation agreements in succession with international fresh food suppliers with Win Chain as the global fresh food gathering platform. For example, in October, Win Chain teamed up with Cargill Animal Protein China in signing a strategic cooperation to be the partner of all products under the Cargill Sun Valley brand in mainland China. 

"Win Chain is connected to the global premium supplier resources at one end, and the best new retail channels in China at the other, such as Tmall, Fresh Hema, and RT-Mart. It will provide 'from farm to dining table' and one-stop solution covering all links of fresh food for relevant suppliers," Win Chain co-founder Jin Guanglei said.

Jin noted that, in the future, more top suppliers in the world can be merged to China's new retail channels through Win Chain, so that more quality fresh products will be offered to Chinese consumers to satisfy the needs of a "consumption upgrade."

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