For several years now, the Chilean cherry industry has been discussing market diversification. Despite efforts by various organizations involved in cherry exports, China remains the primary destination for cherries, accounting for 88% of total exports during the last season. Total shipments for the 2022-23 season exceeded 415,000 tons or 83 million 5kg boxes, with a positive variation of 17% compared to the previous year. Out of this, 365,201 tons were destined for China/Hong Kong.
The chart above compiled by iQonsulting shows the destinations of Chilean cherries. While specific data on India is not available, it is represented in the 1% of ‘other destinations’ in the Far East. But why has this distant country been considered an alternative for diversifying the export of this fruit?
One only needs to look at the demographic data to begin answering this question. India is one of the most populous countries in the world, with a population of 1,407,563,842. It is also one of the top 10 economies globally. In simple terms, just like in China, there is a significant number of people capable of demanding a large quantity of products, and cherries seem to be gaining ground among them.
In 2020, ProChile published a comprehensive report on the fruit market in India. The country imports blueberries, cherries, kiwis, apples, avocados, walnuts, and grapes from Chile. Regarding cherries, Indian consumers prefer Chilean fruit over other sources, accounting for 53.5% of the total imported in 2019, followed by the United States (21.8%) and Australia (11.6%).
Interesting information from a report prepared by ProChile’s Market Intelligence reveals the profile of Indian consumers:
Discerning consumers: India has a population of approximately 1.38 billion, with 19% belonging to the middle class, who are the main consumers of fruit. This segment has become more demanding and seeks high-quality goods.
Basic requirements: Price is very important, followed by quality and proven health benefits.
Consumption culture: India has been a price-sensitive market, but consumers are now willing to pay extra for high-quality products, especially if they offer health benefits.
Regarding fruit demand, the document indicates that “(Cherries) are also considered a niche product. Chilean cherries are preferred, followed by those from the United States, due to their appearance and taste.” Furthermore, regarding consumption trends, it states, “Cherries have been primarily consumed in confectioneries and the Horeca sector. Due to awareness of their health benefits, direct consumption of cherries is increasing.”
Finally, regarding the target segment, cherries are consumed by the middle and upper-middle classes, aged between 28 and 50 years old. The main consumer states are concentrated in major cities such as Delhi, Mumbai, Bangalore, Pune, etc., where the market is continuously growing.
Concentrating efforts on India
For industry associations, government bodies, exporters, and even producers, India has been gaining attention as a potential destination for exporting cherries. In 2021, the Chilean Exporters Association (Asoex) promoted their cherries in India for the first time.
The launch event was led by Juan Angulo, the Chilean Ambassador to India, and took place at Foodhall, Chanakyapuri, where an attractive display of Chilean cherries was set up, resulting in excellent sales.
“Chilean cherries are appreciated for their flavor and superior quality, and Chile is one of the largest exporters of cherries in the world. Consumers worldwide love the fantastic taste of cherries for their juicy and sweet flesh. I am delighted to see them in India,” said Juan Angulo, former Ambassador of Chile to India at the time.
Time has passed, and efforts are being made from different sectors to diversify the market for Chilean cherries towards India. Antonio Walker, the former Minister of Agriculture and current president of the National Society of Agriculture, refers precisely to this.
“India is a tremendous challenge. We must do for India what we have done for China. It has a completely different cultural reality. India is more protectionist and has a different approach to trade openness. But India’s population is set to surpass China’s, so we have a market that we can exploit much more. I think the Ministry of Foreign Affairs and the Ministry of Agriculture are focusing on India, and we appreciate that because we have to conquer that market. It could be one of the largest in the world if we do it right,” Walker said.
But what does the industry say? In the coming years, Chile is expected to surpass 100 million exported boxes of cherries. Additionally, in 2024, a late Chinese New Year (February 10th) will offer a wide marketing window for cherries before the festival.
Are exporters looking at India?
“The main market remains China, and once logistics improve, Vietnam will enter strongly. India is already somewhat more consolidated, but diversification only reaches 10%, so there is still a lot of work to be done. But it’s growing, and investments are being made in new markets to expand the opportunities for Chilean cherries. As an exporter, we have a trip to India, Korea, and Vietnam coming up soon to improve possibilities and explore alternatives to avoid excessive transit times,” said Erick Araneda, Commercial Manager of Exportadora Magna.
Sebastián García, Category Manager of Cherries at Copefrut, also spoke about market diversification, stating the need to understand potential new destinations for Chilean cherries.
“I see it as a very important challenge. We have work to do as an industry to open new markets. We need to understand the objective of diversification and where to diversify. There are markets we are exploring, such as Southeast Asia, where we don’t know how far they can go, and others like the United States and Brazil that are already more established. We must understand how to serve those markets, the challenges that exist there, and the demands of consumers. It’s something we have to learn to take advantage of it in the best way,” said García.
Logistics and marketing
India has one major obstacle to becoming a major destination for Chilean cherries: the lack of adequate infrastructure to receive, transport, and maintain such a delicate fruit like cherries. However, significant investments have been made in this regard in recent years.
“Just as China didn’t have refrigeration facilities at one point, we need to establish ourselves and distribute there. I know a very nice story about Australian melons being sent through normal import channels to Indian supermarkets, but the import volume didn’t increase. Then a delegation went to see what was happening and discovered that distribution is very different in India. There, hand-pulled carts are a very popular way of distribution and sale of fruits and vegetables, and there are people who control these food carts, thousands of them. They distribute from a distribution center to those who sell in neighborhoods. The melon producers noticed this and did business with those in charge of these distribution centers, increasing melon sales by 1000 percent. Today, they are major suppliers of melons through cart distribution,” said Isabel Quiroz, Founder and Director of iQonsulting.
Through this example, Quiroz also provided constructive criticism regarding market diversification.
“I feel that sometimes we are very traditional in continuing to contact the same import channels, and we don’t study the social fabric of how distribution is done in these new countries, how people buy in neighborhoods and big cities, not just in supermarkets, which reach very few people. I think we have a lot of work to do because India is coming, and we need to be prepared,” Quiroz said.
The study conducted by ProChile sheds light on the differences in the Indian market. Here are some textual parameters included in the study that give a general overview of exporting to the Asian country:
Importer: There are no exclusive importers for each product, and most fruit is imported by importers who sell fresh fruit in general.
Supermarkets: The culture of supermarkets is relatively new. The largest supermarket chains are Big Bazar and Easyday, both owned by Future Group, Reliance Retail, Godrej Natures Basket, and Food World (formerly known as Spencers).
Specialty stores: The most popular gourmet store chains are Le Marche and Food Hall. There are small retailers in different areas that have their specialized stores selling dried fruits and spices. In cities like Delhi and Mumbai, there are also premium outlets for dried fruits.
Restaurants: Restaurants play a very important role in popularizing a product. Including fruits as ingredients or garnishes in food and conveying their benefits educates the end consumer and increases demand for the product. In the case of grapes, they are considered basic fruits in India, so people don’t prefer to order them when eating out. Restaurants will not be helpful in promoting grapes in India.
E-commerce: Grofers and Bigbasket are the leading online stores in India, with over 5 million registered users. Amazon’s grocery store is also gaining popularity.
It is necessary to closely understand the reality of the Indian market and consumers, which, as indicated in the ProChile report, have numerous differences compared to the main destinations for Chilean cherries. On the other hand, India needs to improve its infrastructure to accommodate increased shipments of Chilean cherries.
Another significant issue is the long travel periods. A sea freight from Chile to India takes a week longer than to China, presenting a tremendous challenge. Reaching this new market not only involves commercial, phytosanitary, logistical, and governmental arrangements but also ensuring the best possible practices in the orchard, considering the impact on post-harvest and fruit quality at the destination.