祥宇 Xiangyu – China – In Olio Veritas

Producer: Mrs. Yuhong Liu
Brand: Xiangyu
Date of settlement: 1997

Location: Wudu district, Longnan region, Gansu Province, China

Olive grove: 1 000 ha owned + cooperative over 20 000 ha
Varieties: Leccino, Koroneiki, Pendolino, Picual, Picholine, but also the chinese varieties Ezhi-8 and Gheng’Gu-32
Harvest time: Hand picking in November
Production: 2 millions litres per year
Other products: a hundred products: sweet table olives, beauty & health, olive wood accessories…
Specificities : the first industrial producer based in Gansu, and market leader for domestic olive oil

China’s largest producer to conquer the world?

Founded 20 years ago, Xiangyu was one of the first companies to invest the emerging field of extra virgin olive oil in China, with high quality and R&D as key words, and a hybrid model between owned olive groves and a cooperative system. It turned out a successful investment since the company, that currently employs 300 people and has recently moved to brand new facilities, is the leader for chinese olive oil in the domestic market. And now Xiangyu starts thinking of the European market…. Let’s meet Yuhong Liu, president of Xiangyu, and daughter of his late founder.

P1060275 — Passionate talks with Mrs Liu, thanks to our sympathetic interpreter, Mr Zhifeng – © In Olio Veritas

In Olio Veritas – Could you please tell us the story behind Xiangyu ?

Mrs Liu – In the 1990s, my parents decided to plant olive trees on the piece of land they had in Gansu’s mountains, because they liked their shape. Scientific surveys led by the government had just proved that this area was very suitable for olive trees. Other people followed my parents’ lead, but when all these trees gave their first fruits, there was no mill in the region to process the olives. Then, in 1997, my father founded the company and bought the first mill in Gansu province, to get olive oil out of his fruits, as well as other farmers’. This cooperation is still the main principle on which stands our company today.

P1060271 — Xiangyu’s factory is at the foot of the mountains, on which climb terraced olive trees. Don’t miss the decoration : an olive tree pruned the chinese way – © In Olio Veritas

IOV – Which means that the olive oil you make comes only for a part from your own orchards ?

Mrs Liu : That’s correct. The company owns several hundreds hectares of olive trees, a part of which is used as a scientific research center for issues like irrigation, pruning or fertilization. But the main part of the olive oil that we produce comes from fruits that we buy to 45 000 and more farmers from the surroundings.

P1060760 — A booklet explaining the relationship with the farmers. We have a better understanding of the drawings than of chinese language.

IOV – Could you tell us more about this relationship ? And how are the farmers compensated for the olives they provide ?

Mrs Liu – We have implemented a very fruitful partnership, that has helped reducing poverty in the region. To all the farmers wishing so, we give olive strains and we train them to grow the trees. When they harvest, we purchase the crop. We buy more than 15 000 tons every year, which means about 100 millions yuans (13 millions euros) that we give back to those families. Some of them only have a few trees, which makes an additional income, while others made it their main crop.

P1060487 — You’ll find these olive trees terraces in every single village of the area, up to a 1 300 meters asl elevation – © In Olio Veritas

IOV – How can you make sure of the raw materials’ quality when you work with so many farmers ?

Mrs Liu – With the trees in terraces, people have to harvest hand picking, which causes less damage to the fruits than mechanical harvesting. This is a prime guarantee of quality. Also, in 2015, we have invested massively in a brand new factory, with very sophisticated mill, storage tanks and production lines. The new mill can process 560 tons of olives daily, which allows us to press all the fruits within 8 hours after harvest. This short delay is an other guarantee of quality, since the olives and the oil keep all of their chemical and sensory properties.

P1060245 — Labelling and packaging : the last steps at the end of one of Xiangyu’s 3 production lines – © In Olio Veritas

IOV – You claim a fully organic production, but once again how can you make sure about it when working with so many partners ?

Mrs Liu – It’s quite easy ! Here in Gansu, climate is suitable for olives crop and we have no diseases, pests, molds or whatsoever likely to hurt the trees. Therefore we simply don’t need to spray the trees or the soil.

P1060425 — With a dry climate and a yellow loam soil, Bailong valley is suited for olive trees – © In Olio Veritas

IOV – With more than 2 million liters yearly, you have quite a large production to sell. What are your main markets and distribution channels ?

Madame Liu – For now we only operate the chinese market. We have about twenty shops in the main cities and are distributed in many other retail stores throughout the country. Furthermore, since 2012 and the government’s call for the development of e-commerce in China, we’ve been prioritizing online sales with partners such as Alibaba, Tmall, Taobao, Suning… But we do not sell only olive oil as we also have a very diversified range of products : sweet table olives, beauty & health products, olive leaves tea, olive wood accessories… We have more than 100 products and a dedicated team for the development of new products each year.

P1060207 — The shop at the entrance of the factory is a real delight for the visitors. – © In Olio Veritas

IOV – Do you have views on the international market ?

Mrs Liu – Of course we’re considering it ! One of our key word is « become bigger and stronger ». We’re still thinking of how we could work abroad. A spanish firm contacted us, saying that they would be interested in a partnership. We’ll see. And I go myself each year to Europe, to meet colleagues and experts.

« Become bigger and stronger », is Xiangyu’s keyword and is well illustrated by this ambitious 50M€ Olive City project. See you in 10 years ?

IOV – Are you aware yet that in Europe, China is not often a synonym for quality ? Especially for such a typical Mediterranean product as olive oil ?

Mrs Liu – Yes and that’s a pity. Tasting our olive oil should persuade anyone of the contrary. That is also the reason why we have been submitting our products to the main extra virgin olive oil international competitions. We’ve been awarded several times : in Tokyo, Los Angeles and New-York for instance. This quality and origin thing is a joke, since the oil that we make at Xiangyu is way better than the spanish or italian products imported to China and sold in supermarkets. Yet, a lot of consumers in China buy those european oils, because they think it is a higher quality than domestic ones. We still have a lot of work before people get aware of the actual situation.

P1060194 — Xiangyu’ extra virgin olive oils were awarded in several international competitions – © In Olio Veritas

IOV – Mrs Liu, thank you for time and shall we go and taste your extra virgin olive oil now ?

Given the cooperative system, most of Xiangyu’s extra virgin olive oil are a blend of several varieties. The one that we tasted had a fresh and quite powerful smell, and a medium green fruity, with a moderate bitterness but an interesting pungency. Unquestionably the best olive oil we tasted in China.