South Australia’s Purus Group is redefining the way food and beverage producers engage with the China market – and in the process are de-risking the entry process.
CEO Craig Katz founded the company in October 2013, and in the first 12 months of its operation he visited China 11 times to ensure every aspect of its business model had been fully researched.
“Capitalising on my international trade and marketing, when I moved to South Australia in 2012 I soon realised that there was a disconnect between the aspirations of food exporters and the realities of the Chinese market,” Craig said.
“In 2013 I joined a trade delegation to China with the then Minister for Agriculture, Food and Fisheries, Gail Gago, and what I saw and heard reinforced my belief and led me to launch the Purus business model.
“That model improves on every aspect of the food supply, marketing and distribution value chain to the benefit of all participants, from producers to buyers, retailers, consumers and even government. The Purus model provides the entire value-chain platform to which we add products for specific segments of the Chinese retail market. This is a much better approach than sourcing products then trying to create a platform that suits them all.
“The Purus Group has three brands – Vantage, Nuvara and Purus Assure - to source and supply quality products to Chinese consumers at very clearly defined levels, from hypermarket right through to the high end, comparable with Harrods in London, or David Jones Food Halls in Australia.
“As someone who is patriotic to South Australia and was integral to the development of the State brand, I believe that for those companies where it is appropriate it is important to state the provenance of their products. Although we are representing producers and suppliers from Australia, we will, where possible, highlight those producers who are based in South Australia through using the State brand within our various marketing touch points that we are responsible for. We discuss using the State brand with suppliers but, while we cannot force suppliers to add the brand onto their packaging, we can and will use on our marketing materials.
“At present we are probably 40 per cent South Australia, 40 per cent Victoria and 10 per cent other. While we are continually looking for new products and suppliers, we will always try and represent as many from South Australia as we can as the state does have some fantastic products but more importantly, suppliers who understand the difficulties in getting products into China and are willing to work with us to alter their ingredients or packaging as required.
“Chinese consumers are very conscious of standards in areas such as sustainability, environment, fair trade, product ingredients and healthy diet. So our model emphasises those standards via our three brands, educating the buying public and giving them confidence in their purchasing. That is one of our points of difference from the end-user perspective.
“Another point of difference is that we do not deal with distributors. Some areas of trade with China have many layers, each adding to the end price. So we deal direct with retail chains and the all-important import agents, so there are only three parties to any transaction. This is transparent and helps ensure a fair price on the supermarket shelf”.
The first of the Group’s brands – Vantage – was launched just before Christmas through China Resources Vanguard, China’s largest food retailer with 450 outlets.
The Australia-China Free Trade Agreement should be a boon to this young business. Craig believes the immediate impact will see Australian goods becoming more affordable, and thus more accessible to a larger base of Chinese consumers.