reLAKSation 316. Callander McDowell
High anxiety: According to IntraFish, Kjell Stangeland, Head of Fisheries and Aquaculture at the Norwegian bank DnB Nor has expressed fears that salmon production may continue to show growth of up to 20% per year. He said that the bank is anxious that such growth may lead to over-supply with an inevitable negative impact on price. He added that there is a clear relationship between supply and price and whilst there has been good underlying growth in many markets, the salmon industry is vulnerable to over-supply leading to negative price developments. He believes that this can be managed over the short term but not over a longer period of time. He is also concerned that any long term oversupply will take even longer for the market to straighten itself out.
We, at Callander McDowell, understand Mr Stangeland’s concerns but at the same time we do not believe that his prognosis is inevitable. It has long been recognised that once the salmon producers began to significantly expand, then the industry would be expected to consolidate and reorganise. The earliest predictions that the salmon industry would be dominated by just a handful of players were first made soon after prices collapsed in 1989. However, such consolidation is not enough to prevent continued growth along with the prospect of over-supply. The industry must also reorganise and become much more market oriented rather than dependent on the spot price market.
Such change means that the production companies must take much more accountability for the supply chain rather than abdicate responsibility to others. Whilst we are great believers in product development as a way of diversifying the market, it does not offer a short term solution. Instead, the industry must invest in marketing as a way of creating a greater demand for farmed salmon. The salmon industry cannot expect the market to continue growing in line with production growth without any encouragement.
From time to time, the salmon industry has discussed various marketing schemes but these have not come to anything. There appears to be a general reluctance to spend money on marketing especially whilst prices have remained high. This is in part due to demand from new geographic markets which have helped boost prices. At the same time, the more established markets have experienced a slow down in consumption because prices have been too high.
In the last few weeks, prices have started to weaken suggesting that new markets may be beginning to show a resistance to these higher price levels. Whilst this may start to reignite the developed markets, it may not be sufficient to absorb the higher production volumes. This is why investment in marketing is now essential. If it doesn’t happen soon, producers will argue that they may not have the money to spend because of falling prices.
Whilst Mr Stangeland is worried about over-supply, the real issue is under-marketing. Unless both sides of this equation are properly addressed, it won’t be just Mr Stangeland who will be showing signs of anxiety.
Green is not always green: The Scotsman newspaper reported that the National Consumer Council (NCC) have looked at which supermarket is Britain’s greenest grocer. They concluded that whilst all eight major chains showed some improvement on last year, not one did well in all respects. The best performers were Sainsbury’s, M&S and Waitrose but all three only achieved a ‘B’ grading. The Coop, often thought to be the most ethical supermarket, only managed a ‘D’.
The supermarkets were adjudged on a whole raft of measures from selling low cost energy efficient light bulbs to the promotion of in season fruit and vegetables. The stores were also judged on whether they stocked sustainably sourced fish with the NCC finding that there was some improvement in the availability of MSC certified products. They were however disappointed to find that there was still very little promotion of these products.
The NCC named Asda’s ‘Smartprice’ frozen fish fingers as its ‘green product of the year’.
Whilst the pack of ‘Smartprice’ fish fingers is no doubt green (in colour). It is doubtful whether the product can really be described as green. Certainly Leo Hickman does not think so. Leo Hickman has written many books on ethical living including ‘A Good Life – a guide to ethical living’ and ‘A Life Stripped Bare’ (www.leohickman.wordpress.com/ ). He is also a features journalist and editor working for the Guardian newspaper for which he writes a weekly column about ethical living. A couple of weeks ago his column included a question about the ethics of eating cod fish fingers. He responded by saying that the options are fairly limited because where one dilemma is solved, another pops up to replace it. He said that the answer to cod fish fingers is to buy fish fingers that are certified as sustainable by the Marine Stewardship Council such as those sold under the ‘Smartprice’ label by Asda. These are made from pollock which are caught off the coast of Alaska. Immediately, Mr Hickman says that this sets off the food-miles siren, something which undermines any green credentials.
Mr Hickman questioned the MSC about the question of food miles to which they replied it is an issue which is “amazingly complicated” and therefore the MSC concentrates on whether or not the fish comes from sustainable stocks. Simply, what this means is that the MSC have buried their head in the ground with regard to other green and ethical issues because it would totally invalidate their work. Following the MSC’s logic, the NCC should never have awarded a green credential to any product endorsed by the MSC. The only green thing about MSC certified ‘Smartprice’ fish fingers is indeed the colour of the packaging.
Yet, this is not the only question about theses fish fingers. The NCC say that the availability of these fish fingers means that ‘green shopping is no longer the preserve of wealthy consumers’. Well Asda customers certainly don’t have to be wealthy to be able to afford to buy a pack of ‘Smartprice’ fish fingers. A pack of 10 fish fingers (250g) costs just 24p (€0.34/NOK 2.63/$0.49) a price which hardly justifies the raw material costs, let alone shipping it half way around the world. By comparison similar fish fingers made by Birds Eye cost £5.52/kg whereas the ‘Smartprice’ product costs 90p/kg. Such a cheap product cannot be green and is certainly not ethical!
Mr Hickman’s solution to the fish finger dilemma is to convert the children to eating fresh fish fillet. He was obviously unaware that there is a more sustainable option available and that is the new ‘No Catch’ cod fish finger made from sustainably farmed, locally produced, organic cod and this is a fresh not, a frozen option. A much greener option all round.
The dark arts?: We, at Callander McDowell, haven’t yet had time to visit the Fishmonger Ltd, a new pioneering modern fishmongers in South London, but we would imagine that it is set up to serve the premium end of the market. Certainly, the local ‘Greenwich Phantom’ website describes it as such selling assorted cookery paraphernalia alongside the fish. The shop is also planning tastings and cookery demonstrations. They are definitely targeting a certain type of foody customer.
With such a specific target market, it is rather surprising that one of the founders, Julian Pryke, has developed a negative view of his supermarket neighbours. As well as having to get up at 4 am for his daily trip to Billingsgate market Mr Pryke has become a columnist for Seafood International where he can discuss a number of varied supermarket inspired conspiracy theories. In his latest column he suggests that the rapid rise of tilapia in the US market has nothing to do with the fish but rather can be attributed to the dark art of marketing and ‘our old friends’, the supermarkets.
The news that tilapia is now the fifth most consumed seafood in the US has left Mr Pryke completely baffled. He argues that tilapia is tasteless and not great, however it he acknowledges that it is easy to farm which he says is good news for the supermarkets and their enormous marketing budgets. He thinks that tilapia’s rise in the US market is a reflection of the USA’s international credibility which has been further undermined by making tilapia its fish of choice.
Whilst Mr Pryke may be an excellent local fishmonger, his appreciation of the global seafood market is rather lacking. The reality is that the US is a very different market to that of South London. The US is an enormous country with many parts which are far from the sea and in the past could not access fresh seafood. Instead, demand grew for freshwater species such as the channel catfish with production peaking at 300,000 tonnes. Freshwater fish have a very different taste to marine species which Mr Pryke may consider not to his usual taste. Demand for tilapia in the US has grown on the back of this consumption of freshwater species and has continued to grow because consumers like it. It may not be the requirements of top chefs but it is good to eat and is not expensive to buy.
Mr Pryke suggests that it is unimaginable that European countries would ever develop a demand for this tasteless tilapia in the same way as in the US. Perhaps not, but then we have a better supply of marine fish and more importantly tilapia is not cheap. In the UK, on supermarket is selling tilapia fillets at £12.49/kg whilst cod fillets are a much cheaper £8.98/kg.
It is an easy target to knock the unfamiliar but Mr Pryke doesn’t seem to like anything but the traditional. It seems that he would rather that American consumers should eat MacDonalds and Burger King than eat a healthy option like tilapia.