Hanging out and investing in China

Entrepreneur Alex Worker is helping to bring the world’s cuisines to China. Photo by The NZ Herald.
Entrepreneur Alex Worker is helping to bring the world’s cuisines to China. Photo by The NZ Herald.
Alex Worker jokingly refers to himself as "a failed Kiwi''.

But the China-domiciled University of Otago graduate, with a truly global perspective, is anything but a failure.

By day, the smart and articulate young entrepreneur works for Fonterra, leading marketing and communications for its international farming business unit based in Beijing.

By night, he can be found at The Hatchery, Beijing's first culinary incubator that he co-founded with several partners.

The Hatchery was about bringing the world's flavours and cuisines to China, with the ability to cater for temporary restaurants on-site in the popular Sanlitun district.

Over time, the aim was for the business to become an incubator for successful entrepreneurs, potentially also in other locations in Beijing, as well as elsewhere.

It is an innovative concept that Mr Worker (30) explains over a dinner of green-lipped mussels and Kiwi beer, the conversation peppered with an infectious energy for what he does.

The Hong Kong-born son of a veteran New Zealand diplomat has always called himself a Kiwi.

He spent most of his early years following his father, Carl Worker, who had postings at the New Zealand embassy in Beijing in the 1980s and 1990s and was New Zealand consul-general in Hong Kong from 1994 to 1998.

He was also ambassador to Argentina, Uruguay and Paraguay from 2001 to 2006 and served an extended term as New Zealand ambassador to China from 2009 until last year.

"Dad always jokes that the first memory was . . . him taking me up the Great Wall [of China] and having to change my diapers.''

Alex Worker's secondary school years were spent in Wellington, where he enjoyed a typical Kiwi teenage upbringing "playing touch, falling over, and having a laugh''.

After leaving school, he headed to the University of Otago to complete a commerce degree in international business.

Through the university's business school, he spent six months on an exchange in Buenos Aires with two other mates and had a "hell of a time''.

That experience led to him choosing New Zealand investment in South America as his dissertation for postgraduate studies in Auckland on his return.

Essentially, it was about weighing up Fonterra's strategy, versus that of PGG Wrightson which founded New Zealand Farming Systems Uruguay.

That led him to the doorstep of Fonterra and he started work with the dairy co-operative in Auckland in 2009, which included working on the GlobalDairyTrade auction platform when it was being set up.

After three and a-half years, Mr Worker was enjoying the New Zealand aspect but felt it was "like kicking a whole bunch of commodity product into a container''.

His father was back in China, as ambassador, and he had half-Argentinian half-brothers whom he did not know particularly well.

There was a desire to head to China, understand what the Chinese consumer looked like and hang out with his family.

So he left Fonterra to study for an international MBA at Tsinghua University, with his thesis on how did New Zealand move up its value chain with China.

And around all of that, he was trying to work out what was going on in Beijing and China.

Shanghai was the cosmopolitan city but Beijing was ultimately where the powerbase was.

Around that powerbase, there was quite a lot of capital and, with all its universities, there were also a whole lot of entrepreneurs.

He realised politics in the capital were really influencing where entrepreneurs wanted to be.

Beijing was "pretty tricky'' but he believed there was a lot of opportunity there for New Zealand.

While doing his MBA, he had started up a small business with two Kiwi mates.

They were trying to "solve the world'' by taking over high end New Zealand SME products but it fell over two years in.

Their business model meant they "foolishly'' took on all the risk on behalf of the brand.

They bought at the cellar door, imported the product and tried to sell it in China.

It was difficult and their young age was probably also a factor. Some of the smartest businessmen in the world lived in China, and they knew "all the tricks''.

Mr Worker was now back with Fonterra in what he described as his "day job''.

He liked working for the co-operative, saying it might be "beaten around a bit'' but ultimately it was "trying to do a whole bunch of good on behalf of a whole bunch of New Zealand people''.

The Hatchery's origins were in pop-up bars 18 months ago, serving ceviche and the South American spirit Pisco.

The Chinese-Kiwi owner of a group of cafes around Beijing called Cafe Flat White was always asking Mr Worker how to get more customers into the cafes in the evenings.

His response was to come in with a whole new concept and do something different. Pisco and ceviche was the answer, and it worked.

The pop-up trend internationally was very strong. In Beijing, there was a need for a quality, creative and not overly expensive new restaurant concept to cater for a whole group of people who could be anywhere, but were choosing to be in the city.

Many of those millennial consumers were travelling widely and understood what was good around the world, but wanted "a bit of everything'' back where they were based.

The Hatchery was born from the realisation of wanting to be the platform, rather than a pop-up, and so a team was built.

When it came to those millennial consumers' concentration and expectations, Mr Worker's view was that they were always wanting something new.

"So let's help them. Come to the same space but expect different things. We're focusing on that millennial consumer that's increasingly international, has disposable income. They want real stuff. They . . . want stories but they don't want to be oversold.''

The Hatchery team's vision was to share the world's cuisines in China and, over time, help different entrepreneurs.

But they were "not care bears''.

They wanted to help entrepreneurs very quickly understand where they could succeed quickly - or fail quickly.

And there was no point underemphasising the latter, he said.

Ultimately, it was also building up a community of people who liked the idea of hanging out, or investing.

"We're not there yet but I think our job increasingly will be once we prove this model to the market is actually helping those entrepreneurs go between leaving us, get a failing and learning from it, or succeeding here. And how do we help them partner and match with either property developers or potential investors that really believe in what they do,'' he said.

Mr Worker believed there was a great opportunity, not only in Beijing but increasingly around China and elsewhere, concerning how to speed up the ability to "put really cool things in front of people'' and allow people to change their models.

Looking at the wider New Zealand picture, Mr Worker said there was so much opportunity in China.

But the flipside was that everyone in the world wanted to be selling in China.

It was a buyer's market and those in e-commerce were winning, as they had market share, data and the consumer.

Trying to get product to China, let alone position and sell it, was not easy.

It was also very difficult to keep up with changing consumer needs if you did not have in-market platforms.

The Hatchery's goal was to build a platform that understood those consumer needs so they could work back through the supply chain.

Personally, he considered Silver Fern Farms to be the "smartest'' meat player in New Zealand, with the company's consumer-led packaging formats.

It was building those formats for real needs, and that was trying to get meat out of a cold warehouse on to a doorstep.

But there were still challenges there, including how to position the New Zealand grass-fed story over the Australian grain-fed story which was already well-established.

When it came to how New Zealand could differentiate its product, he believed it needed to build its own platforms.

Do something like The Hatchery and do something different and, in choosing markets, don't talk China.

Talk cities, or neighbourhoods in cities which were "big enough in themselves''.

The real key was leveraging the New Zealand brand story.

In the case of meat, that could be around grass-fed.

The model needed to be backed up with a very comprehensive market strategy and that had to balance online to offline and again offline to online.

What was happening in Beijing was really going to help define New Zealand's future.

The city could feel "quite weird'' on first arriving, particularly when contrasted with Shanghai.

Kiwis liked to hang out in Shanghai, a city essentially set up to capture all those people who wanted to do business with China.

"But they're essentially just doing business with Shanghai.''

Instead of just being an exporter and letting the "e-commerce guys pick us off'', doing your own importing and forming partnerships such as the joint venture between Silver Fern Farms and Shanghai Maling, meant sharing the value chain.

"You can get platforms in here and educate consumers, get a lot more control over their purchasing today and also where the market's going and what they're going to want tomorrow.''

As a young Kiwi, Mr Worker also wanted to get other young New Zealanders into Beijing for work, and also encourage young Chinese to attend the likes of Otago Polytechnic, and then return to China.

He was very positive on the New Zealand-China relationship.

The first "chapter'' of the Free Trade Agreement was kind of like what could be sold to China in the short term.

But China played a longer game and it was now about how China was positioning itself across the Pacific Rim, and New Zealand was seen as a trusted and close friend.

"To be real friends, it doesn't mean you're ... bowing down or getting pushed around. Real friendship means straight up conversations and, sure you disagree at times, but you work through that, and you also value each other's differences.

"The second chapter I don't think it should be Jack Ma and Alibaba [referring to the founder of the hugely successful e-commerce firm] seeing what they can get out of leveraging New Zealand country of origin brand. It should be us saying, ‘Hey, we can tell our own story in China'.''

- Sally Rae travelled to China courtesy of Silver Fern Farms.

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