reLAKSation 104.
Export the Council: Asbjorn Reinkind, Chief Executive of Rieber & Son and former Chief Executive of Hydro Seafoods has called for the disbandment of the Norwegian Seafood Export Council. According to IntraFish, he said that promoting all Norwegian seafood under a single logo is comparable to pouring money down the drain. This is estimated at about NOK 200 million a year.
We, at Callander McDowell certainly have sympathy with Mr Reinkind’s view, although we may differ somewhat on the rationale for disbanding the Council. Mr Reinkind argues that it isn’t possible to build up Norwegian seafood as a single brand because anyone can use the logo irrespective of whether the produce is of inferior or higher quality. By comparison, we are simply not convinced that a brand can be developed on the basis of national identity alone. This is because most consumers remain indifferent to country of origin, preferring to focus on the product itself. It could be different if stores were selling identical products from two different origins side by side and then consumers have to choose which to buy, but this is rather uncommon.
Most retailers are quite happy to offer customers one example of each species or product so customers’ choice relates to whether they buy cod or haddock, not whether the fish comes from Norway or Iceland. We believe that this is the main reason why Mr Reinkind feels that the subsequent yield on Norwegian marketing is so minute. A national brand just does not have sufficient extra value in the marketplace to create the type of loyalty anticipated.
Instead, Mr Reinkind believes that the money should be invested to help individual companies develop their own brands. We do not think that this goes far enough. If companies are to invest in brand development then they must also ensure that their products are sufficiently different to warrant a distinct brand. With seafood this must involve some added value processing because without this, even the largest most brand conscious companies have found that the brand does not perform in the marketplace. Many years ago the multinational company Unilever tried to brand fresh salmon, but their attempt failed. Their then Managing Director wrote afterwards that ‘they don’t brand fillet steak do they?’ What he meant was that even the most expensive cut of meat was just that, a cut of meat which anyone could copy. Consumers would have to be convinced that a branded fillet steak was worth more than one which is not and Unilever found such justification hard to make. They therefore abandoned the brand.
If companies are to invest in branding then they must make sure that their products are distinctive in the marketplace and more importantly, they are what consumers actually want to buy.
The Norwegian Seafood Export Council have not just been involved in national campaigns. They were also given the task of running the EU generic promotion. This was the focus of much complaint from the Norwegian industry, which suggested that Scottish and Irish salmon producers were benefiting from Norwegian investment. As most consumers would be unable to tell Scottish, Irish or Norwegian from each other, Scottish and Irish farmers could conceivably benefit from Norwegian national campaigns. One salmon is very much like another. This is why branding alone, whether it be national or company based, is not the answer to market development.
What they say! It is not often that we at Callander McDowell are in the news rather than expressing our view on it, but IntraFish reported our comments from the last issue of reLAKSation with regard to batch labelling. We commented on the fact that MEP Catherine Stihler believes that current legislation which allows salmon to be labelled as being from more than one origin should be changed. We argued that it was unnecessary to draw attention to this issue as most consumers considered it unimportant when buying salmon. Instead, the salmon industry should be focussing on those issues which will help stimulate both demand and margin.
IntraFish now report that Catherine Stihler and Brian Simpson recently went walk-about in Edinburgh to solicit the public’s views as to how they would like to see salmon labelled. Not surprisingly, fewer than 10% were not concerned about the origin of the fish they buy and just wanted salmon. We say that this is not surprising because the shoppers asked were all Scottish and it is natural that they would express a preference for Scottish salmon, labelled as coming from Scotland. More importantly, the way in which these shoppers are asked the question is fundamental to their answer. If we refer back to the Tesco survey discussed in the previous reLAKSation, customers were twice asked about origin, but in very different ways. The answers were also very different. First, Tesco asked their customers which country they would prefer the salmon to come from. The answer was an almost unanimous preference for Scotland. This suggests that country of origin is extremely important to most consumers, yet when these same customers were asked to rank the most important factors to them when buying salmon, country of origin came last.
The problem for Mr Simpson and Mrs Stihler is that experience from several other surveys appears to indicate that what consumers say when questioned and what they do when actually buying salmon can be two very different things. For example, Tesco found that 69% of their customers said that they would be willing to pay more to buy Scottish salmon, but then Tesco said that they didn’t think that they would do this in practice and of course, this seems to be very much the case. After all if consumers say that they both prefer to buy Scottish salmon and are willing to pay more for it, then why is the Scottish industry so concerned about cheaper imports. The answer is that clearly most consumers are happy to buy lower priced salmon, irrespective of origin.
Mrs Stihler would no doubt
respond by suggesting that many consumers are not been given the choice due to
batch labelling, but as this applies to only one store group, most other
consumers do have a choice and are still opting for value for money ahead of
origin. This is clearly what consumers want and thus it is what supermarkets
provide.
One is not many!: IntraFish interviewed an up-and –coming London chef because he had told a magazine that he never uses farmed fish. Instead, he only uses fish from sustainable sources so that his menu is endorsed by the WWF. Christian Sanderfedt of the Aquarium Restaurant in London’s trendy St Katherine’s Dock said that he has environmental concerns about fish farming and this is why he never uses farmed fish.
However, this is not surprising. Most leading chefs have taken a stance about using ingredients of the highest possible quality and actively seek out the most specialist of suppliers. Sadly, fish farming does not fall into this category because it has taken on an aura of mass production. Yet, fish farmers should not be too concerned that small up market restaurants do not want to use their produce.
Whilst residents of trendy St Katherine’s Dock may be denied the opportunity of eating farmed fish in their local restaurant, their local supermarket has no such qualms. Salmon, trout and sea bass, all clearly labelled as farmed are permanently available only a short walk from the Aquarium restaurant and feature in many residents’ shopping baskets. The fish farming industry should be happy that they are able to supply many local consumers rather than just the limited few who deign to visit Mr Sanderfedt’s eatery.