Chinese Billionaires See Food as New Frontier

on April 10 2014 | in Daily Headlines Trending | by | with No Comments

Wealthy Chinese who made money in technology or real estate are turning to food as their new frontier.

They are following in the footsteps of the rich and famous in the West, such as Britain’s Prince Charles, who launched one of the world’s first premium organic food brands, Duchy Originals, 24 years ago, and supermarket chains like Whole Foods Market Inc. that cater to people concerned about healthy eating and food safety. In China, the opportunity is even bigger. The potential for modern farming and the pricing power of quality food have attracted entrepreneurs and investors.

Chinese people have become increasingly willing to pay more for higher-quality food after a string of food-safety scandals. Recent incidents include farmers dumping 15,000 dead pigs in a Shanghai river and cases of rat and fox meat being sold as lamb. In response, healthy-food restaurants and organic produce markets have sprung up in China, and it has become fashionable for Chinese people to visit farms on the weekends or grow their own vegetables.

Since trusted brands are lacking, celebrity endorsements can be very valuable. Real-estate tycoon Pan Shiyi, co-founder of Soho China Ltd., has his own Pan-brand apples, which are grown in his hometown in Gansu province. His efforts to promote his apples on social media appear to be working. They sell for $5 per kilogram, six times the average apple price, and do well on online retail outlets including Taobao. This week, Mr. Pan has been touting his apples as the fruit of the Boao forum, an annual gathering of business and political leaders known as China’s Davos.

Many businessmen, including Mr. Pan, say they are seeking more than profits from food. When Ding Lei, founder of Chinese Internet portal NetEase Inc. started to raise pigs in 2009, he said his main aims were to raise awareness about food safety and protect farmers’ interests. But his pigs also turned out to be a useful marketing tool. Last week, Mr. Ding distributed pork products to four players of NetEase’s Internet game “Fantasy Westward Journey,” which created a lot of media buzz because it marked the debut of his much-hyped NetEase pork.

Other successful business leaders have helped popularize the safe-food drive. Vivian Wang, a former banker at Credit Suisse Group AG, opened Inno Café, which specializes in natural foods, last year in a Shanghai high-tech zone. She plans to grow parsley and sage on the walls of the restaurant to promote sustainable food production.

Read more at The Wall Street Journal.

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