reLAKSation 346. Callander McDowell
Branded!: Former Marine Harvest chief, Atle Eide, has suggested that ‘Norwegian Salmon’ is the strongest brand to emerge from Norway. Writing in IntraFish, Mr Eide says that ‘Norwegian Salmon’ is a generic brand that has been created through directed investment over many years. He adds that this is impressive for a country which has created few global consumer brands.
Whilst there is no doubt that farmed Norwegian salmon is now exported to, and appreciated in, over 100 different countries in the world, we are not convinced that ‘Norwegian Salmon’ is actually recognised as a global consumer brand. Instead, we, at Callander McDowell, believe that consumers buy salmon from Norway because that is what salmon is available rather than ‘Norwegian Salmon’ being specifically chosen.
We accept that we have not visited every market where Norwegian salmon is sold and therefore there is a possibility that we could be wrong but we have being monitoring some of the main European markets including France and the UK and have seen no evidence that ‘Norwegian Salmon’ has behaved as a consumer brand.
This is not really of any surprise since we have followed a similar discussion with regards to ‘Scottish salmon’. The simple fact is that when it comes to buying salmon, origin is of minor importance. Some own label salmon products in one or two British supermarkets are described as Scottish salmon but we have no doubt that if ‘Scottish’ was substituted with ‘Norwegian’ or ‘Chilean’, we do not believe that sales would be affected.
The problem is that, as we have argued on more than one occasion, most consumers wouldn’t be able to identify one piece of salmon from any another and equally wouldn’t know why it was different even if it was. The use of generic brand mark is a relatively meaningless exercise.
Mr Eide suggests that parallels can be drawn between generic branding of salmon and that of wine, but again we would disagree. Wine is a complex issue comprising of the country of origin, the locality, the grape and the way it is produced. Every wine is different and an expert can from blind tasting, usually identify it down to the vineyard it was produced. This is certainly not the case with salmon. Most wines are now branded in some way, displacing the country of origin to a position of minor importance, usually on the back label. The country of origin does have a role in consumer choice but the wine is not promoted by it. In fact, a quick scan of bottles sold in a major supermarket produced only one bottle stating French wine on the front label and this was the a bottle of the cheapest ‘plonk’ on display.
Mr Eide has said that investment in generic marketing has helped wine producers from Australia, Argentina and Chile grab market share from the established producers. He asks who had heard of Australian wines ten years ago? However, the reason for the rise of these producers is not really about generic promotion but rather the way that they have modernised a very traditional market, producing new wines that are presented in news ways that are attractive to a much wider range of consumers. This has helped expand the wine market in a way that could never be achieved by generic branding alone.
If anything, we would possibly use Scottish whisky as a better example of generic marketing. The link between ‘Scotch’ and ‘Whisky’ is so well established that it is only necessary to ask for a bottle of ‘Scotch’ to be offered a bottle of whisky. However, even with such an established association between ‘Scotch’ and ‘Whisky’, there is no guarantee that consumers will favour Scotch whisky. Japanese whiskies are gaining a greater toehold in the world marketplace and this year, according to the Scotsman newspaper, two Japanese whiskies have been voted the best in the world. ‘Yoichi’ has become the first brand to win the single malt award and the best blend has been judged to be ‘Suntory Hibiki.’
Generic branding may appeal to the producer because it re-enforces the high opinion of their products but it is not as well accepted by the consumer. The EU generic marketing campaign demonstrated that generic promotion is probably the least effective way of promoting salmon, although better than nothing. Although some claimed the campaign to be a great success, the fact that it has not been voluntarily repeated is confirmation that it left a lot to be desired. One reason that some are reluctant to invest again in a generic promotion is that they are concerned that they might be contributing towards the promotion of someone else’s salmon.
The Norwegian Seafood Export Council will no doubt disagree with our view, as is their right. They actively help companies promote their salmon in far flung markets as a Norwegian product. This is their job to help generate sales. The question however is whether such promotion has resulted in the creation of ‘Norwegian Salmon’ as a defined consumer brand. We simply don’t think so.
Scotch missed?: The Norwegian Seafood Export Council are not the only ones going out to promote salmon. The Scottish Minister for Aquaculture, Michael Russell has been busy doing the same since the European Seafood Exposition in Brussels. This week he opened the ‘Aquaculture 2008’ exhibition in Aviemore in the Scottish Highlands. He said that the salmon industry is of great economic value to Scotland and we need to ensure its sustainable economic growth. Last year, Scotland produced some 140,000 tonnes of salmon worth about £380 million which is more than the value of the catching sector.
We are pleased that Mr Russell is now seen to be actively supporting the aquaculture industry in Scotland although whether he understands the industry and recognises its priorities is unclear. Mr Russell has previously supported the ‘Scottish’ salmon industry with repeated calls to retain the MIP in order to safeguard local producers. Yet, speaking at Aviemore, Richard Slaski, Chief Executive of the Federation of Scottish Aquaculture Producers told IntraFish that the aquaculture industry is in danger of being crushed under the burden of overregulation. Perhaps, the aquaculture industry might be better served by Mr Russell if he addressed all the red tape that affected Scottish fish farmers rather than fighting to retain outdated trade measures? Mr Slaski said that ultimately, the regulatory climate dictates whether you make a profit or not. One of the arguments put forward by the EUSPG was that the MIP was required to give Scottish farmers a breathing space to allow the Government to address the question of regulation. This has obviously not happened and perhaps why Mr Russell has been so vocal in favour of the MIP.
However, our concern that Mr Russell does not really understand the farming industry was confirmed as he launched a report investigating the need for climate change in Scotland. The report has found that agriculture is to blame for 25% of Scotland’s greenhouse emissions and that radical change to centuries-old practices are required if Scotland is to meet its targets to tackle climate change. According to the ‘Scotsman’ newspaper, the report dispels the myth that it is only air travel, shipping and excessive car use that releases huge amounts of carbon dioxide into the atmosphere. The report suggests that Scotland’s cattle farmers are also to blame.
The report covers a wide range of issues but the one recommendation that stands out is that Scotland should replace its traditional cattle species such as Aberdeen Angus with faster growing continental varieties that will produce less methane during their growing cycle. This is because traditional Scottish breeds take a long time to mature compared to European varieties such as Simmental and Charolais. This would mean that they would be slaughtered sooner reducing the methane emissions.
Opponents to the report say continental cattle are not suited to Scotland and also they are a tourist attraction. In addition, they say that Scottish farmers are used to working with these breeds. However, they miss the real point. From a marketing perspective, this proposal is pure madness.
Scotland is renowned for its beef and whilst it could be argued that beef is beef whatever the animal it comes from, consumers have an image that Scottish beef is different because it comes from identifiably different cattle rather than some anonymous European breed. The best Scottish beef is usually associated with Aberdeen Angus cattle and whilst this is not the hairy Highland cow that most consumers perceive to be the source of most Scottish beef, it is well identified. Even Burger King offers an Aberdeen Angus burger.
At a time when Scottish Ministers are trying to promote Scottish food, the suggestion to replace native cattle just beggars belief but then, such ideas may be more about jumping on the political bandwagon rather than pursuing what’s best for the industry. It is interesting that Fishupdate.com report that Mr Russell’s boss, Richard Lochhead has said that for this week he will eat only Scottish produce, following a previous commitment by the Scottish leader Alex Salmond. If these Ministers want to set an example, they will be eating Scottish produce all of the time and not just as part of a week long stunt. Mr Lochhead said that supporting local home grown produce is in the national interest. Perhaps, this interest does not extend to Highland and Aberdeen Angus cattle and if they don’t sort out all the red tape and regulation, then also to the salmon industry.
Over-hyped: We were drawn to a headline in Seafoodinteligence.com that suggested that Copper River salmon selling in excess of $40/lb was a case of over-hype whilst IntraFish indicated that the price in Seattle had reached $50/lb. This equates to about £55/kg for these fish. We, at Callander McDowell, can only wonder who in their right minds would pay such a high price for a raw salmon fillet when in the UK, consumers can buy some wonderful fresh Scottish salmon fillet for under £12/kg? It is beyond comprehension.
The obvious question is why Copper River salmon should merit such a high price and what makes it so different that consumers are prepared to pay $55/kg to buy it or is, as seafoodintelligence.com suggests, is it nothing more than excessive market hype?
The first explanation as to why there is so much hype is that the Copper River is the first salmon fishery to open on the West Coast so the fish reach market before fish from another other fishery. This opening creates an immediate demand because they are the first fish of the season. It is very reminiscent of the grouse season in the UK. When shooting opens on the 12th August, there is a rush to get the first birds to London's fashionable restaurants. Not for nothing is this day known as the ‘Glorious Twelfth’.
However, unlike the grouse season, Copper River salmon are a relatively recent phenomena. According to the Seattle PI, before 1983,Copper River salmon were just another fish with most ending up in cans. Then seafood consultant Jon Rowley introduced Copper River salmon to a handful of restaurants in Seattle and they were met with acclaim.
There is apparently a biological reason why Copper River salmon taste better. The Copper River is a challenging river for salmon returning to breed and the long and difficult journey requires salmon with a high fat content. This is apparently what makes the fish tasty, yet interestingly a similar high fat content is why some criticise farmed salmon.
Other wild Pacific salmon are also said to have a high fat content and when tasted against Copper River fish, testers were unable to ascertain any difference.
Additionally, Copper River salmon are relatively scarce so that there is an inherent rarity value for which some consumers are willing to pay extra.
Finally, fishermen in the Copper River have recognised that they have a market advantage and have responded by making every effort to keep the fish in pristine condition until it reaches the consumer. Such efforts can make the difference in helping convince consumers that Copper River fish merit a higher price. This is further supported by a Copper River Marketing Association to ensure that their message reaches the consumer.
However at the end of the day, Copper River King salmon are no different to any other Pacific King salmon just as Copper River Sockeye salmon are no different to any other Sockeye (and incidentally why Norwegian salmon are no different to Scottish or Irish Atlantic salmon.) They are the same fish…. or are they?
Seattle consumers are willing to buy into the Copper River hype. According to the 'Seattle Weekly', affluent, health conscious diners are driving round town displaying bumper stickers on their hybrid cars that say “Friends don't let friends eat farmed fish”. Little do they know the truth. Like much of the Alaskan salmon that is despatched around the world, Copper River salmon are not truly wild but are the product of a hatchery for much of their early life. In the case of Copper River salmon, a hatchery located at Paxson on the Gulkana River which drains directly into the Copper River. So as much as some advocates of wild Pacific salmon would like to think that these fish are wild salmon, many have actually been farmed throughout the freshwater stage of their life.
This year, the Copper River catch appears to be down on previous years. The catch of King salmon has only been around 800 fish as compared to forecasts of 5,673 fish. The same low return also applies to Sockeye with only 2,400 fish harvested against a forecast of 17,105 fish. One possible reason for these low returns could be that fishermen are now paying the price for an over ambitious hatchery programme. The release of excessive numbers of salmon from Alaskan hatcheries is now being blamed for the decline of salmon stocks in British Columbia. The release of too many fish into waters which only have limited feed resources has meant that BC fish have not reached maturity and have not returned to their native rivers to breed. Could it be possible that such competition for food has now meant that even stocks of Alaskan fish are beginning to suffer.
What makes this harder to understand is that Alaskan salmon stocks are supposed to be sustainable because they are certified as such by the Marine Stewardship Council. However, it is clear that they are no such thing because unlike other wild fish populations, Alaskan salmon are managed by stock enhancement. The additional pressure of extra demand resulting from the eco credentials must be having an adverse effect on stock viability. The carrying capacity of the natural environment was never expected to be stretched so far but it seems that this was never taken into account during the certification process. It now seems that some catches of Alaskan salmon are to be reduced in coming years as part of the new fishery agreement between the US and Canada. It just makes one wonder how these Pacific salmon stocks could ever have been considered to be sustainable?
Of course, the affluent health conscious Seattle diners driving around town in their hybrid cars will be reassured that their salmon has received the highest eco credentials from the Marine Stewardship Council. At the same time, they also want to be part of the latest form of connoisseurship which the Seattle Weekly describes as 'We want the first and the best and the healthiest and we're willing to pay for that privilege' but so it appears does the rest of the world.
In order to get Copper River salmon from the river to the Seattle restaurant within 24 hours means that the fish must be air freighted. Seattle Weekly calculated that to transport a salmon by air produces 57 times more carbon dioxide than if the fish were despatched by boat. Alaska Airlines estimate that they will fly about 40 flights carrying some 750,000 pounds of salmon. However to be fair, this accounts for only about 3% of Alaskan salmon.
What this all shows is that with a good marketing strategy even the most questionable product can be made into a highly desirable premium product. This is an example from which many can learn.