reLAKSation 270.                                                            Callander McDowell 

What do they want?: The Intrafish newspaper posed the question as to what do consumers want by looking at five surefire trends that are boosting seafood consumption. These may be trends in the marketplace but we, at Callander McDowell are not yet confident that they are so surefire, at least in the shorter-term. IntraFish say that awareness of these trends may make the difference between a product that resonates with shoppers and one that flops. Yet, in the current marketplace, it is also possible that too much emphasis on these trends may equally tip the balance between success and failure.

1. Organic – Intrafish ask whether organic foods are just a passing trend. They state that the US market is worth $12 billion whilst that in the EU is even larger at $19 billion. However, this is not seafood but all organic foods. Whilst organic seafood is undoubtedly benefiting from the growth of the organic sector, it is still only a tiny part of it. Consumers can understand the rationale of growing organic crops or rearing farm animals in an organic manner. Yet when it comes to seafood, the organic message is not so clear. This is why the UK’s Soil Association have had to issue clarification of their organic standards for fish (seafoodintelligence.com) Many consumers do not understood the difference between organic and traditional aquaculture and some have been deterred by recent adverse publicity.

IntraFish cite Waitrose’s seafood buyer Jeremy Ryland-Langley as saying that demand in the UK for organic salmon continues to grow. We do not doubt this, but Waitrose are at the top end of the market and their customers are more likely to buy organic fish than customers of more mainstream supermarkets. This example provides a slightly distorted view of the market just as saying that demand is so strong that organic salmon from start up company Green Isles Foods has already been pre-ordered. This is likely to be only a few hundred tonnes and is unlikely to make any impact on the global organic market.

There is clearly a market for organic seafood but the jury is out as to whether this is part of a major trend or just a niche within the wider seafood market.

2. Health – IntraFish say that you must have been living under a rock if you’re not aware that omega 3 fatty acids are hot, hot, hot. They quote Kathy Brownlie, a consultant in market opportunities for corporate growth, who said that the omega 3 revolution has just begun. This may be true but whilst experts state that to benefit two portions of fish should be eaten a week, many consumers have turned to the whole host of functional foods containing omega-3 fatty acids rather than eat fish. These range from bread, milk and eggs to yogurt, margarine and probiotic drinks and of course not forgetting the omega 3 pills. One leading supplier did launch a range of omega-3 rich fish dishes in the UK only to see them delisted due to a lack of consumer interest. Omega-3 fatty acids may be hot, hot, hot but the seafood industry might just find them too hot to handle!.

IntraFish say that it is not just omega-3’s which fuel the health boom. They compare the recent growth of seafood with that of chicken. Between 1970 and 1990, US seafood consumption rose by 24% whilst that of poultry grew by over 50%. Since 2000, seafood consumption has grown by 8.4% whilst poultry by only 7.2% However, 7.2% of the existing poultry market is a huge amount of poultry and still dwarfs the quantities of seafood consumed.

3. Sustainability – IntraFish say that marketers are jumping on the sustainability bandwagon and consumers appear to be listening and that is exactly the point. Sustainability does not drive consumer purchases, at least not yet. The sustainability message is being mainly driven by the environmentalists and the retailers are responding because it doesn’t look good for them if they don’t. Consumers do not have a choice. This isn’t probably a bad thing since clearly something does have to be done to safeguard stocks from over-fishing but this is not about what consumers want. British consumers certainly did not respond to the sustainability message when they had the choice to buy MSC approved hoki. They didn’t.

4. Ethnic – IntraFish quote Matt Jonas of the US, Balls Food Stores who said that three things drive the ethnic food trends: immigration, TV Food shows and travel. Of all the trends, ethnic food is probably the most complex to understand.

Certainly ethnic food has become increasingly available with the increasing ease of international travel. Forty years ago only the most intrepid travellers would visit the Far East but now it is available through charter holidays. Consumers get to taste food from around the world and are willing to continuing eating it once the return home, if it available. Ethnic food has spread to every corner of the world. For example in London, it is possible to eat almost every ethnic cuisine without even leaving the confines of the city. Yet, tastes change and what is in vogue at any one time, can be not so appealing at another time. IntraFish look at the way that Nordsee have converted some stores to sushi bars. Sushi is very much in favour at the moment. In the UK, it can be bought in every supermarket and sushi bars are springing up everywhere, but next year it will be something else.

Another example of the fickle nature of the consumer can be seen with the fast food sector. Not so long ago, McDonalds and Burger King dominated the market. Recently Subway Sandwiches started to appear and now they are on every street corner. Eventually consumers will want something else and another chain will appear and some Subway stores will disappear as the fad diminishes.

Ethnic groups can also influence change. IntraFish state that in the US, the Latino population is set to grow double the speed of other groups. If the Latino population eat seafood then seafood demand will increase. However, ethnic groups can be very conservative in their eating habits and this does not always include seafood.

5. IntraFish suggests that time is the most endangered commodity of modern life and consumers are looking for quick and easy meal solutions. They say that so called dinner kits are now taking off in the US and the UK. These encourage the consumer to prepare at least part of the meal. They say that these products could rival the growth of ready meals. We, at Callander McDowell are not so sure. Our observations indicate that whilst there is a market for these products, the ready meals will continue to dominate the market. The amount of shelf space devoted to these products is already starting to shrink compared to when these products were first launched.

Our view is that these surefire trends do not yet dominate the mareketplace. They are still niche markets rather than mega trends. It is possible that they may increase in importance in future generations. In the meantime we would like to offer a sixth option which we believe will always attract the consumer. Simply, that the fish and seafood tastes good; is in a form that the consumer wants and that it is at a price the consumer is willing to pay.  

Passed up:  According to IntraFish, the Marine Stewardship Council has rejected the proposal to extend its eco-labelling programme to include farmed fish.  Rupert Howes, MSC Chief Executive, said that his group has an overarching mission to contribute to reversing the decline in global fish stocks which is why they have decided to focus their resources and activities on their core wild fish programme. He added that they have considered the issue very seriously.

Clearly, they have not considered the issue seriously enough, since if they had, they would have recognised that the most significant tool available to them to help protect wild catch fisheries is aquaculture. The most effective way of reducing the fishing pressure on wild stocks is to ensure that the market can obtain its supplies from another source and that source can only be from farming. Wild catch fisheries cannot be isolated from the wider seafood market as the fish is sold off the same fishmongers’ slab as fish resulting from farming.

The MSC has adopted this blinkered vision of fish supply from when it was first conceived by the WWF and Unilever. Both organisations have made their position on aquaculture very clear, through their reports and advertising. The MSC appears no different so the MSC’s decision should not really be of any surprise. However, their decision can only be described as a missed opportunity to really make a difference.

Underachieved?: Sid Patten, and Mike Gibson, respectively Chief Executive and Chairman of the Scottish Salmon Producers Organisation, have continued their tour of salmon farms in Scotland, this time in Orkney. In a press release covered by all the news services and the mainstream newspapers, Mr Patten has pronounced that salmon farming in Orkney is in decline and is missing out on the vast opportunities presented by an unprecedented increase in salmon consumption.

His view appears to be based on production figures originating from the Scottish Executive’s annual survey of fish farms in Scotland. This shows that production in 2004 fell to 6,600 tonnes from 10,740 tonnes in 2003.

However, Mr Paten’s visit to Orkney took place in November 2006. In a few weeks time, it will be 2007. Whilst the Scottish Executive appear to be reluctant to publish the data, these figures were made public last December, nearly a year ago. This is old news. Mr Patten said that production is expected to fall further when the latest figures are released shortly. This is also not news since the 2004 survey predicted that production in Orkney will fall to 5,344 tonnes.

Mr Patten said that salmon production in Orkney has many similarities with the rest of Scotland but it is also evident that there are some differences. However, Orkney is not the only part of the Scottish industry to show signs of decline.

Ideally we would like to refer to the 2005 survey but this has still not been published so we must rely on 2004 figures. The survey includes the following data:

Clearly, it is not just Orkney that is in decline. NW Scotland and Shetland also will suffer falling production but it seems that only Orkney is in decline.

Mr Patten said that he believes there is a need for a unique strategy to maximise the obvious advantages of Orkney. Perhaps this is the fundamental problem. Whilst there might be an unprecedented increase in the consumption of salmon, any strategy undertaken may not need to be unique. It may be as simple as producing the salmon that consumers want.

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