Vanguard’s Timothy Li from the company’s Shanghai office shares more about the current conditions in China and how the impact of COVID is rippling through the global produce community. This follows part one which looked at how lockdowns impacted day-to-day activities.
Q: There has been a lifting of COVID protocols in Shanghai as of June 1st. What changes are happening in the wholesale markets, supermarkets and restaurants?
A: Even with the lifting of protocols, we are not back to pre-pandemic wholesale market policies. Buyers can only check product quality by video with the seller which limits the selling process.
Most restaurants are still not allowed inside dining. Only supermarkets are back to normal operations. But some grocers in higher-risk areas still have policies limiting the number of people in the store at one time. Overall, we still need more time to properly return to pre-pandemic shopping and dining experiences.
Q: What impacts have we seen on consumers? For example, online shopping vs in-person. Dine-in or take away?
A: The main change is the move to online purchasing. Many of my friends don’t want to shop in the physical supermarket as they worry about crowds and COVID. With restaurants, there has been less change as people still like to dine in so they can meet friends, and it provides the normal social activity they craved.
Q: What have been the most significant challenges in China?
A: The differing policies between local governments create fear for jobs in certain regions. The Central Government encourages simplified COVID protocols to facilitate logistical efficiency in China.
However, ‘COVID Zero’ is the main goal for local governments. Some small cities cannot have transparent COVID policies. They prefer a ‘one-stop’ policy to prohibit transportation from pandemic-impacted areas or enhance self-quarantine requirements for drivers coming from pandemic-impacted areas. There is still much needed to have a country-wide, unified COVID protocol.
Q: We have completed shipments of Vanguard’s Peruvian grapes. Any highlights of the past season?
A: I am very excited about our recent Peruvian grape season since most of our customers had very good feedback, especially about our fruit's eating taste and Brix. Our brand series of Autumn Crisp is one of the top labels selling in China. Many buyers recognize it and plan to increase their buying volume next season.
Q: Looking ahead to Q4 are there concerns about future lockdowns?
A: My main concern is around the cash flow and profitability of smaller importers and wholesalers. The Shanghai lockdowns have resulted in little to no business for over two months, yet they still have labor and wholesale expenses. It limits their cash for future buying this year. The fresh wholesale market has always been impacted by lockdowns, and most importers cannot go through another lockdown season.