A battle to change perceptions
United States-headquartered company Sealed Air is often referred to as the inventors of the Bubble Wrap, the famous packaging material that everyone finds irresistible to pop. Here in China, the current challenge for the company’s Food Care division lies in a similar activity — popping the thought bubbles of misperception by local consumers.
While many Chinese consumers have become increasingly skeptical about the quality of food products, many still perceive that unpackaged meat in wet markets are the fresher alternative compared to those in hygienic air-tight bags. Karl Deily, president of Sealed Air’s food care division, said that remolding the way consumers in China think about packaged meat will be key to improving the company’s growth in this high potential market. Sealed Air looks to be one of the first companies to attempt to do so, and while many foreign enterprises in China are beginning to question the advantages of being “an early bird” or “a first mover”, Deily is committed to the cause and optimistic of the situation.
“From my perspective, it’s getting easier to do business in China now compared to 25 years ago. Today, people here are getting more receptive to new ideas and the world is becoming a smaller place every day,” said Deily.
Besides the fact that Sealed Air’s innovative packaging solutions stand to benefit from this, the company’s decision to adopt this strategy also stems from research findings from several projects in China. The first is the 2013 ‘China Pork’ project initiated by Sealed Air with the aim of revolutionizing the nation’s pork supply. The second is a partnership with the World Wildlife Fund (WWF) and the China Chain Store & Franchise Association (CCFA) to drive a food security initiative around poultry. The focus of this project is on global best practices for sanitation, packaging, and storage and retail distribution of fresh poultry products. At the invitation of the International Poultry Council, Sealed Air recently presented findings from this project at the International Poultry Council Conference in Xi’an, Shaanxi province.
Overall, these projects showed tremendous opportunities for companies such as Sealed Air to help customers reduce wastage, enhance food safety, modernize the food chain and improve the distribution process.
“When an economy or customers are focusing on food safety, that’s right in our area of expertise. Food safety, shelf life and minimizing food waste are fundamental to our business model,” said Deily.
Sealed Air’s food care division may have contributed upwards of 51 percent to the company’s overall global revenue last year, but it is estimated that the company’s annual growth rate for China this year would stagnate as a single digit figure. This is largely due to the slowdown of China’s macro economy, a plunge in fine dining expenditure because of the central government’s strict ban on extravagant spending, and the fluctuation of exports.
However, Deily is still upbeat about the outlook, pointing out that from a global perspective, a 6 or 7 percent growth rate is still acceptable considering how many other countries are experiencing negative growth.
“You can still drive everywhere in China and see lots of cranes. New buildings are still going up everywhere, new retail chains that are China-owned still provide many opportunities. Sealed Air believes there are several areas in the world that are strategically important for our growth, and China is certainly one of the places,” said Deily.
Karl Deily, president of Sealed Air's food care division, is optimistic about the challenge to change the mindsets of locals who don't believe in buying packaged meat.