FRUIT of their LABOR

From: China Daily

Meng Kaoshe and Li Zhenhua are both competitors and partners.

The two farmers of Linmeng village, about two hours drive from the world-famous Terra-cotta Warriors in Shaanxi Province, are supplying apples to Sodexho, a global provider of food and facility management services.

Meng is responsible for collecting apples from growers, while Li is a veteran raiser of the fruit. "I am not fully willing to sell my fruit to him (Meng)," Li says. "He is too fussy."

Actually, Meng holds the "Apple Bible" - a series of strict standards that range from size to color, from pruning to fertilization, from picking to packaging - all set by France-based Sodexo.

The diameter of each apple should be between 75 and 80 mm and 80 percent of the fruit skin should be red, Meng notes, citing some basic criteria as examples.

Li says that he can accept that small apples must be abandoned, but questions why some larger ones do not qualify. Meng explains that the apples are mostly for employee canteens of large enterprises or set menus of cafeterias, so uniformity is required. "Moreover, apples of this size are more delicious and packaging and transportation are more convenient," adds Meng.

Li, for his part, does admit that his income has increased greatly since 2003, when Sodexo began to purchase apples from the area, and now does not have to worry about sales.

His revenue from apples recorded annual increases of 20 percent since the stable and made-to-order purchases from Sodexo not only expanded sales but also facilitated him to plan growing in line with orders and avoid overproduction. Direct procurement also reduces the number of middlemen and increases purchase prices.

According to Rachel Long, purchasing director of Sodexo Eastern China, the most challenging task for the company is training local farmers to grow fruit in an environmentally friendly way and package apples using scientific methods.
Due to the highland climate - abundant sunlight and relatively large temperature differences between day and night - apples from Shaanxi Province are juicy and sweet with red and light skin.

Sodexo buy apples while advocating the use organic fertilizer and shows growers how to use it, not only to prevent pollution of apples but also to protect and conserve land and water.

In addition, damage to the fruit during transportation was before rather high. After introduction of scientific packaging, losses have declined and transportation costs have been reduced.

Income increase

Linmeng village and its neighboring areas in the mountainous region switched from wheat and corn cultivation to fruit planting in 1995. But due to a bottleneck in sales and sharp middlemen who offered very low prices, villagers had to work as migrant workers in cities to support themselves and their families.

In 2003, Meng's brother, who was working in Shanghai after university graduation, found information that Sodexo was recruiting providers in remote rural areas, aiming to not only purchase high quality organic agricultural products, but also to support local growers in their climb out of poverty by offering transparent information, enhanced planting and management skills and elimination of exploitation by middlemen.

After on-site investigation, the French food and facility manager decided to establish a long-term presence in the area and set up stable contacts like Meng to be responsible for various villages.

"Many global companies are now purchasing raw materials in China's middle and western regions," says Luo Yunbo, dean of the food science and nutritional engineering school of China Agricultural University.

McDonald's buys potatoes from Inner Mongolia Autonomous Region and Ningxia Hui Autonomous Region, while Kentucky Fried Chicken's potatoes are from Qinghai Province.

"The purchases help the giants reduce procurement costs while supporting local farmers through a stable sales channel, which is a win-win strategy," says Luo.

In Linmeng village, more than 40 families specialize in growing apples, with annual production from each household averaging from 2 to 3 tons.

Sales revenue of each family was 20,000 Yuan to 50,000 Yuan from 2004 to 2006, comprising about 50 percent of their income. The average rural household revenue of Shaanxi was between 20,000 Yuan to 30,000 Yuan, according to the provincial government.

"We purchase around 250 tons of apples here from September to February - the harvest season - every year for Shanghai," says Long.

Li is negotiating with Meng, hoping for a higher price and more sales this year. He plans to send more money to his daughter, who is studying in Chinese People's Public Security University.

"Thanks to the apple sales, I can afford her tuition and accommodation in Beijing," says Li, whose daughter became a postgraduate student at the university this semester.

Sodexo

Founded by Pierre Bellon in 1966 in Marseille, Sodexo is based on the Bellon family's experience of more than 60 years maritime catering for luxury liners and cruise ships. Operations initially served staff restaurants, schools and hospitals.

After an initial public offering on the Paris Stock Exchange, Sodexo experienced robust development. As one of the world's top 500 companies, it has a presence in 80 countries and regions, with 332,000 employees of more than 130 nationalities at 28,300 sites.

Its businesses have expanded to serve many types of clients, including prestige operations, defense contractors, correctional institutions, healthcare providers, seniors and people with disabilities, education institutes and public authorities.

Entering China in 1995, the food and facility operator now serves over 500 sites in 30 Chinese cities with over 13,000 employees.

Its clients in China include Nokia, P&G, Haier, DHL, Beijing Kerry Center Hotel, Beijing International School, China National Offshore Oil Corp and Shanghai Baosteel Group.