Industry Special: METRO China ensuring food safety 'from farm to fork'
Updated: 2012-10-11 07:17
By Li Fusheng (HK Edition)
Boasting a large variety of products, METRO China offers retailers one-stop solutions. Photos Provided to China Daily
Leading self-service wholesaler METRO China has been forging ahead rapidly since its first store opened in Shanghai in 1996.
After 16 years of development and excellent market performance, it now has 58 outlets across the country, with another four to be established within the year.
METRO China, with 8,500 employees, serves 3 million professional customers across the country, of which the most important are hotels, restaurants and cafes.
Statistics show that the company generated 1.5 billion euros ($1.94 billion) in sales revenue in 2011, an increase of 18 percent from 2010.
This is partly thanks to METRO China's unique business model, said the company.
Boasting a large variety of products, the company offers one-stop solutions.
The company has more than 3,000 products under six brands of its own - Aka, Fine Food, HoReCa Select, H-Line, Rioba and Sigma - and 1,000 types of goods imported from across the world.
Among its customers is Greenery Cafe, a chain restaurant specializing in Western-style food in China.
Because shrimp is a major ingredient of the restaurant's signature dish, the cafe's requirements in terms of size and quality are strict, making it difficult for the restaurant to find qualified suppliers in the market.
"METRO China came to us and solved this great headache by offering specific types of shrimp we want," said a representative of Greenery Cafe.
Since 2007, the restaurant has bought 200 tons of shrimp from METRO China, the representative added.
Another contributing factor to the wholesaler's success is its achievements in food safety, which also helped the company become the designated food supplier to the 9th National University Games of China last week.
"We have a unique combination of weapons to ensure safe food from farm to fork," said Uwe Hoelzer, president of METRO China.
The company has been helping more than 25,000 farmers and 1,000 food producers to improve production, processing, packaging and logistics management in line with such international standards as Global GAP, IFS, and ISO 22000 since it established Star Farm, China's first agricultural consultancy company, in late 2007.
"We founded it not to make money; we did it because we could not trust a supply chain without knowing who the farmer is because of middlemen in between," said Hoelzer.
Later, METRO China and Star Farm co-developed the Traceability System, which records every step food goes through on its journey from farm to table.
By scanning a product's barcode, customers will know every detail about it - where it was grown, when it was harvested, how it was transported, when it reaches the date of expiration, and so on.
Such information is the prerequisite of food safety and will help enhance customers' trust.
Now the company owns more than 2,500 traceable products, including meat, fish, dairy products, fruits and vegetables.
"This helps reassure us that METRO China's products are safe now that we can trace them, say vegetables, back to the very moment they were harvested," said Shen Guanzhong, owner of Louwailou Restaurant in Hangzhou, noting that food safety is a matter of prime importance for the food and beverage industry.
In addition, METRO China employs unbroken cold-chains to ensure freshness of products delivered on the way to local wholesale centers, such as the one from Shanghai to Chengdu, capital of Southwest China's Sichuan province.
As products arrive at wholesale centers, they are received, processed, stored and sold in accordance with the requirements of the company's Hazard Analysis and Critical Control Point system to ensure their safety and quality.
To maximize the effects of the system, METRO China also provides training courses to its customers.
Thanks to its food safety management system, METRO China has served as a designated food supplier for a number of international and national events, including the 2008 Beijing Olympic Games, 2010 Shanghai World Expo, and the 16th Asian Games in 2010.
Trader support solutions
In addition to expanding its own presence across the country, METRO China is also helping to sharpen the competitive edge of small and medium-sized retailers, another major section of its customers.
These independent retailers, which number around 2 million in the country, are facing fiercer competition as large international ones are attracting more and more customers, according to the company.
In last August, METRO China launched the Trader Support Solutions program in Wuxi, East China's Jiangsu province.
Through the program, local retailers can enjoy a wide range of free services.
For example, METRO China will help analyze their strengths, locate their target customers, suggest products to offer and improve their shops' layout. They can also solicit professional suggestions on other relevant issues, such as how to work out promotion plans, to increase their sales.
"This is a new 'triple-win' cooperation model, as it benefits retailers, METRO China and suppliers," said Hoelzer.
"These customers can purchase quality products from METRO China at competitive prices. METRO China can further increase its sales revenue, and suppliers can increase their profits by reducing the cost of trader management," said Hoelzer.
"Most important of all, through the program METRO China helps small mom and pop shops to survive and succeed in the fierce competition," he added.
Preliminary statistics from METRO China show that the program can help those small retailers and grocers increase their sales by 40 percent, their customers by 20 percent and their profits by more than 10 percent.
Now that the program has begun to bear fruit in Wuxi, Metro China plans to try it in Nanjing, capital of Jiangsu province.
(HK Edition 10/11/2012 page6)