How a British Food Company Imports Ingredients via Hefei: Import Case Study

Content Type: Case Study | Reading Time: 7 minutes

This case study examines how Sterling Foods International plc — a London-based specialty food ingredients company — established import operations through Hefei Xinqiao International Airport and the Hefei Comprehensive Bonded Zone to supply premium European food ingredients to food manufacturers, bakeries, and hotels across central and eastern China.

Company Background

Sterling Foods International plc is a London-based specialty food ingredients company with a 40-year history of sourcing and distributing premium European food products to markets worldwide. The company’s portfolio includes over 2,000 SKUs spanning categories such as artisan cheeses, cured meats, premium chocolates, specialty flours, natural flavorings, essential oils, and wine-based ingredients. With annual revenues of approximately GBP 185 million (2024), Sterling Foods serves over 5,000 commercial customers across 60 countries.

Sterling Foods established its China operations in 2018 with a sales office in Shanghai, initially serving the high-end hospitality sector (luxury hotels, Western restaurants, international bakeries) primarily in Shanghai, Beijing, and Guangzhou. However, as China’s domestic food manufacturing sector modernized and the company’s customer base expanded to include Chinese food manufacturers in Anhui, Hubei, Henan, and Jiangxi provinces, the logistics model of importing via Shanghai and distributing inland showed increasing strain.

The Problem with Shanghai Import Routing

For the first four years of its China operations, Sterling Foods imported all European products through Shanghai Pudong International Airport (PVG) and Shanghai Port. This model, while standard for the industry, created several structural problems:

• Inland distribution inefficiency: Shanghai’s location on China’s eastern coast meant that Sterling Foods’ fastest-growing customer base — in central and western provinces — was 600–1,200 km from the import warehouse. A customer in Hefei (only 450 km from Shanghai) typically received delivery in 5–7 days due to Shanghai’s notorious outbound logistics congestion.
• Cold-chain integrity risks: Temperature-controlled products (cheeses, chocolates, meat products) required cold-chain transport from Shanghai to interior destinations. During summer months, the 6–10 hour truck journey from Shanghai to Hefei exposed products to temperature excursion risks, resulting in approximately 2.5% annual product loss — unacceptable for premium food products.
• Customs clearance delays: Shanghai Customs processed over 10 million import declarations annually, and food imports — with their additional sanitary and phytosanitary (SPS) inspection requirements — faced average clearance times of 5–7 days for routine shipments. Expedited clearance was available but at significant premium cost.
• Warehousing cost escalation: Cold-chain warehousing in Shanghai’s Waigaoqiao FTZ cost RMB 120–160/sqm/month (approximately USD 17–23), making it one of the most expensive warehousing markets in China. Sterling Foods’ 800 sqm cold storage facility cost approximately USD 180,000 annually in rent alone.

“Shanghai is the natural entry point for China, but it’s also where every other importer is fighting for space, time, and attention. For a specialist food importer like us, the real opportunity was finding a smarter entry point — one where our shipments received faster customs attention, infrastructure was newer, and costs were substantially lower.” — James Harrington, China Country Manager, Sterling Foods International

Why Hefei? The Strategic Assessment

In early 2022, Sterling Foods conducted a comprehensive evaluation of alternative import gateways. The assessment identified Hefei Xinqiao International Airport as the most promising alternative for several reasons:

While Hefei had significantly fewer direct international flights, Sterling Foods’ analysis revealed that the majority of its European-origin cargo could be consolidated through Amsterdam Schiphol or Frankfurt airports — both of which had regular cargo flights to Hefei Xinqiao operated by China Southern Cargo and SF Airlines. The slightly longer air transit time (adding 2–4 hours for the Amsterdam-Hefei leg) was more than offset by the dramatic reduction in customs clearance time and the elimination of inland cold-chain transport from coastal ports.

Setting Up the Hefei Import Operations

Phase 1: Regulatory Approvals and Licensing (Months 1–5)

Importing food products into China requires multiple regulatory approvals, more stringent than for most other product categories. Sterling Foods navigated this process methodically:

1. Food import enterprise registration: Sterling Foods registered its China import entity with the General Administration of Customs (GAC) and obtained an “Overseas Exporter Registration Number,” which is required for all food importers. The Anhui branch of GAC processed the registration within 10 working days.
2. Product registration for key categories: Under China’s Regulations on Registration and Administration of Overseas Manufacturers of Imported Food, certain food categories (cheese, meat products, health foods) require overseas manufacturer registration with GAC. Sterling Foods worked with its European suppliers to complete registration for 45 product SKUs across 12 manufacturing facilities — a process that took approximately 4 months but was expedited by Anhui Customs’ dedicated food import advisory desk.
3. Cold-chain facility certification: Sterling Foods leased and fitted out a 1,200 sqm temperature-controlled warehouse within the Hefei Comprehensive Bonded Zone — a facility that required certification by both Hefei Customs and the Anhui Administration for Market Regulation for food storage operations. The certification was completed within 30 days.
4. Customs bonded warehouse license: As with the PhoenixMed case, Sterling Foods applied for and received bonded warehouse status, enabling duty-deferred storage of imported food products. For food imports, this status also enables sample testing and quality inspection within the bonded zone before formal import declaration — a significant advantage for products requiring laboratory testing.

Phase 2: Logistics Infrastructure and Partnerships (Months 3–7)

Sterling Foods built a logistics network that leveraged Hefei’s growing air cargo capabilities:

• Air cargo consolidation: European suppliers consolidated shipments at Amsterdam Schiphol Airport, where Sterling Foods contracted with a global freight forwarder (Kuehne+Nagel) for weekly consolidated container shipments to Hefei Xinqiao Airport. The consolidation reduced air freight costs by 15–20% compared to individual small-parcel shipments.
• Cold-chain ground handling: Hefei Xinqiao Airport’s cargo terminal, operated in partnership with SF Airlines, provides temperature-controlled ground handling for perishable imports — a capability that was equipped with active temperature monitoring and GPS tracking from aircraft unloading through to warehouse receipt.
• Bonded zone logistics: A dedicated bonded logistics trucking operation moves imported goods from Hefei Airport to the Hefei Comprehensive Bonded Zone (30 minutes, under customs seal) for storage, inspection, and distribution.
• Last-mile distribution: Sterling Foods partnered with a Hefei-based cold-chain logistics provider (Anhui Cold Chain Logistics Co.) for temperature-controlled distribution to customers across Anhui, Jiangsu, Hubei, Henan, and Jiangxi provinces — all within a 600 km radius of Hefei and reachable within 4–12 hours by reefer truck.

Operating Model: The Hefei Import Flow

Financial and Operational Results

1. Cost savings: Total import logistics costs per shipment (including air freight, customs clearance, warehousing, and inland distribution) decreased by 27% compared to the Shanghai routing model. The savings break down as: warehousing (−43%), inland distribution (−32%), customs brokerage (−25%), and air freight (approximately +5%, due to the Amsterdam-Hefei connecting leg). The net annual savings for Sterling Foods’ China operations is approximately GBP 195,000.
2. Customs clearance speed: The switch from Shanghai to Hefei Customs transformed clearance times from an average of 5–7 days to 4–8 hours for routine shipments. Key enablers included: pre-arrival clearance processing (declarations submitted before goods arrive), bonded zone inspection (samples tested while goods await clearance rather than before release), and Hefei Customs’ dedicated food import clearance channel (priority processing for registered food importers).
3. Cold-chain integrity: Product loss from temperature excursions dropped from 2.5% (Shanghai model) to 1.5% (Hefei model). This improvement was driven by the dramatically shorter inland transport distance (negligible for bonded zone transfers) and the ability to store goods in the bonded zone’s purpose-built temperature-controlled facility rather than transshipping through Shanghai’s congested cold-chain logistics network.
4. Customer service improvements: On-time in-full (OTIF) delivery improved from 88% to 99.2%. Average order-to-delivery time for central China customers (Anhui, Hubei, Henan) dropped from 10–14 days to 2–4 days. Customer satisfaction scores increased significantly, contributing to a 185% increase in China revenue between 2022 and 2024.
5. Customer growth in interior China: With faster, more reliable delivery to interior provinces, Sterling Foods was able to expand its customer base from mostly first-tier cities (Shanghai, Beijing, Guangzhou) to include 120 new customers in Anhui, Hubei, Hunan, Jiangxi, and Henan — regions where competitors relying on coastal import gateways struggled with long delivery times and high minimum order quantities.

Regulatory Navigation: Key Learnings

“The Hefei Customs team assigned a dedicated officer to our account — someone who understood food import regulations and proactively advised us on compliance requirements. That kind of service simply doesn’t exist at Shanghai Pudong, where you’re one declaration among 40,000 per day. The personal relationship with Hefei Customs has been worth more than any subsidy or tax break.” — Li Wei, Operations Director, Sterling Foods China

Recommendations for Food Importers

Based on its experience, Sterling Foods offers the following advice for other foreign food companies considering importing through Hefei:

1. Use the bonded zone for compliance preparation. The ability to inspect, sample, and re-label imported food products within the bonded zone before formal customs clearance is a major advantage. Sterling Foods estimates that 40% of its shipments would have been delayed by 3–5 days if compliance issues had to be resolved after clearance rather than within the bonded zone.
2. Invest in GAC registration early. The overseas food manufacturer registration process is time-consuming and requires significant documentation from suppliers. Sterling Foods recommends starting registration at least 6 months before the first planned shipment, engaging a professional regulatory consultant familiar with Anhui Customs’ specific requirements.
3. Build relationships with local logistics providers. Hefei’s cold-chain logistics ecosystem is less developed than Shanghai’s, but the providers that exist are highly motivated and cost-competitive. Sterling Foods found that investing in a long-term partnership (rather than transactional spot-buying) resulted in better service levels and preferential rates.
4. Leverage Anhui government incentives. Sterling Foods accessed approximately GBP 45,000 in government incentives in its first two years of operation, including rent subsidies, customs clearance fee waivers, and training grants. Companies should proactively engage with the Hefei FTZ administration office to identify available programs.
5. Plan for air cargo connectivity. While Hefei Xinqiao’s European flight network is growing, it still has limited direct connections. Companies should work with freight forwarders experienced in routing via Amsterdam, Frankfurt, or other European hubs that serve Hefei. Weekly consolidated shipments are more cost-effective than ad-hoc air freight booking.

Future Outlook

Sterling Foods is expanding its Hefei import operations with a planned GBP 800,000 investment in a dedicated 800 sqm frozen storage facility (for ice cream, frozen pastry, and frozen seafood categories) within the Hefei Comprehensive Bonded Zone. The company is also exploring the possibility of importing via the China-Europe Railway Express (Hefei-Hamburg) for non-perishable, high-volume products like chocolate, wine, and olive oil — which would reduce freight costs by 40–50% compared to air freight while still arriving at the same Hefei bonded warehouse.

The company’s China revenue target for 2027 is GBP 25 million, predicated on continued expansion into interior China markets served from the Hefei hub. Sterling Foods’ experience demonstrates that for food importers targeting central China’s rapidly growing consumer market, Hefei is not merely an alternative to Shanghai — it is strategically superior.

Conclusion

Sterling Foods International’s success in importing European food ingredients through Hefei demonstrates that secondary Chinese cities with modern airport infrastructure, bonded zone facilities, and proactive customs administration can offer significant competitive advantages over traditional gateway ports. For food importers in particular — where speed, cold-chain integrity, and regulatory compliance are paramount — Hefei’s combination of lower costs, faster clearance, central geographic location, and supportive government policies creates a compelling import routing alternative. As China’s interior consumer markets continue to grow, Hefei’s role as a premium food import gateway is likely to expand significantly.

— Anhui Gateway Knowledge Hub