Can Export Food Agencies Really Earn Millions Annually?

When Mr. Zhang received a six-digit US dollar payment from an overseas customer for the first time, he stared at the bank statement and double-checked the decimal point position three times. This businessman who originally engaged in domestic snack wholesale accidentally represented the export of a Sichuan chili sauce to Southeast Asia two years ago, and now 90% of his company's profits come from food export agency business. "The profit from selling 100 boxes of chili sauce domestically is not even a fraction of the profit from exporting one container." Behind this, what kind of wealth logic is hidden?

The profit structure of food export agencies is like a Russian matryoshka doll and at least contains three layers:

• Exchange Rate Difference: When the RMB depreciates, the US dollars settled overseas will generate additional income after conversion. In a certain quarter of 2023, Ms. Li earned 7.2% more profit just from the exchange rate difference;
• Policy Bonuses: The export tax rebate for agricultural products can reach up to 13%, and some free trade agreements also have tariff exemptions;
• Channel Premium: Lao Gan Ma's fermented black bean sauce, which is sold for 8 yuan domestically, can be sold for 3.5 euros (about 27 yuan) in German supermarkets.

High profit is bound to be accompanied by high risk:

• An agent had 2 million yuan worth of frozen strawberries destroyed on the spot due to failing the FDA surprise inspection;
• A Middle Eastern customer suddenly required that all packaging be added with Arabic labels, resulting in Mr. Wang having to pay an additional 120,000 yuan for reprinting fees.

According to the latest customs data:

• The export growth rate of plant-based foods (such as oat milk) reached 83%;
• Functional candies (vitamin soft candies) are in short supply in North America;
• The export volume of prefabricated dishes in containers has doubled year-on-year;
• The premium rate of halal-certified foods in the Middle East reaches 150%;
• The profit margin of organic infant food supplements exceeds 60%.

Many practitioners have learned lessons with real money:

• Blindly believing that "foreigners like Chinese internet-famous foods", only to find that snail noodles are unsold in warehouses in Europe and the US;
• Ignoring the cost of cold-chain transportation, resulting in the landed price of frozen foods losing competitiveness;
• Using domestic standards for export testing and encountering non-compliance with 22 pesticide residue indicators in the EU.

When domestic food is so competitive that "each pack of spicy strips only earns 3 cents", the overseas market is paying a premium for authentic Chinese flavors. Could the next container contain your profit code? Welcome to share your export stories or questions in the comment section, and we will select three readers to receive a free 2024 Export Food Compliance White Paper for free.