reLAKSation 360. Callander McDowell
Missed opportunity?: Before we get around to discussing the proposals for the new Strategic Framework for Scottish Aquaculture, which was recently launched by the Scottish Minister for Aquaculture, we would like to continue our look at the outcome of the old framework.
From the outset, we were never confident that the Strategic Framework would deliver any real benefits to the aquaculture industry in terms of the marketplace. Whilst, the economic principles outlined in the framework made the right noises in that ‘Aquaculture should be enabled to make a positive contribution to the Scottish economy through being internationally competitive in the marketplace and economically viable at a national level’ there was little offered to make this happen. In part, we believe that this was due to the fact that the Ministerial Working Group was too greatly weighted towards the environmental issues. The resulting ‘actions’ failed to make any discernable impact and as we have mentioned in previous issues of reLAKSation, one of the actions, the comparative cost of production, has yet to be delivered.
The other three main priorities were to encourage investment, which is still ongoing; to develop an export plan which seemed to focus on a study of the French food service market and to develop branded and quality mark standards, the main thrust of which saw the award of PGI status for Scottish salmon although we have yet to hear whether any salmon company has benefited from this development. Certainly, we have yet to see PGI used in the marketplace.
The only action that has attracted our attention was one that looked at aquaculture feed sustainability and this was because the project also contained the wording ‘consumer attitudes’ which are always of interest.
This deadline for this project was one of the most recent with completion due by winter 2007. The full report is available from the Scottish Aquaculture Research Forum website ( www.sarf.org.uk ) and includes details of the survey conducted to reveal the attitude of consumers to the use of different ingredients in aquaculture feeds. Not surprisingly, salmon consumers are generally not aware of the feed fed to farmed salmon so we wonder why this survey was ever conceived. By and large, consumers are interested in whether their food is good to eat and whether it represents value for money. They are not that interested in how it reaches them. Most consumers wouldn’t know what terrestrial farmed animals are fed on so the diets of farmed fish are likely to be even more remote. Whether the feed has 10 or 50% vegetable protein is irrelevant to them as long as the flesh is good to eat.
Whatever the motivation, the survey was carried out and what is of interest is that the survey was extended to cover some basic questions such as the frequency of consumption and reasons for buying salmon. Sadly, we believe that this was not only a missed opportunity but also a clear demonstration of the strategic framework’s major flaw; its inflexibility.
The strategic framework was conceived and put together in separate principles, each with its own priority actions. However, the aquaculture industry is not so rigidly compartmentalised resulting in a great deal of crossed over interest. In this specific example, a project looking at the question of feed sustainability also sought insight into consumer behaviour. Such behaviour is clearly of interest to those involved in marketing and whilst the marketing was never a key priority within the strategic framework, there should have been immediate recognition that the project could help the salmon industry achieve its economic objectives. Instead, the project appears to have not only ignored, but also wasted this market related opportunity. This is because the financial restrictions limited the number of questions that could be posed and in order to maximise the responses, the questions looked to provide answers to more than one issue. Sadly, this means that the answers are actually meaningless. Yet, had the researchers sought just a little more finance and posed more relevant questions, the industry could have learnt much more about the way consumers perceive salmon and more especially, Scottish salmon. Instead, this survey has become a lost opportunity. The survey and its questions are included in the full report along with the answers and the final conclusions.
In all there are just eight questions. The first question asks ‘How often, if at all, do you eat salmon or salmon-based products? Our immediate thought on seeing this question was that it doesn’t distinguish between ‘fresh’ farmed salmon and canned salmon. The UK imports about 24,000 tonnes of canned salmon from Alaska, Canada and Chile which comprises of the various species of wild Pacific salmon. Many of those who responded to this question could buy and eat only canned salmon and their responses will simply confuse the results. In addition, ‘salmon-based products’ is not a term that is in common usage and its inclusion could equally confuse consumers. What the marketers as well as those seeking knowledge about feed sustainability really want to know is how often consumers buy fresh or chilled salmon, even though the presence of wild Alaskan salmon in the British market would also lead to confused results.
The main findings of these questions showed that 40% ate salmon at least once a month (15% once a week and 6% more than once per week), whilst another 20% ate salmon less frequently than once a month. The remaining 40% never eat salmon.
The other findings were that more salmon consumers read the broadsheet newspapers, live in the southern half of England and are in the more affluent social classes, which is nothing new. What the survey didn’t appear to record was the age groups of those who do eat salmon. This is more important since previous research has focused on this consumption data and hence new data could have shown if there was any change to the consumption pattern, although we very much doubt it.
The second question, Q1a - a subsidiary question to question 1 and asked to salmon consumers only, recorded where most salmon was purchased. Again, this offered little surprises with most salmon being bought in the large supermarkets with Tesco most popular with 29% of all purchases. Interestingly, Tesco is one of the few supermarkets to sell both Scottish and Norwegian salmon on the same shelf and thus demonstrates that origin is not a major issue for many consumers.
Question 2 asks ‘where do you think most of the salmon you eat comes from?’ Respondents are asked to choose as many or few answers as they think apply. This question is where the survey really begins to unravel as the various choices should have been divided into two different questions.
The first three choices are caught in the wild; reared in farms and reared in organic farms. The responses were 10%, 42% and 7% respectively giving a total of only 59%. The remaining five choices relate to country of origin including Alaska, Canada, Norway, Scotland and Chile and total 63%. Clearly, some respondents have indicated the method of production whilst other the origin and some will have selected both yet the results don’t really give a clear indication of either the method of production or the origin. The fact that 24% have selected Alaska and Canada as the origin of the salmon they eat seems to confirm that consumers of canned salmon are included in the survey. Interestingly, only 33% of respondents think that their salmon originates from Scotland which is very low considering that this is a UK oriented survey and most should be expected to favour locally produced fish.
Questions 3 and 4 both relate to the reasons why consumers choose to eat or not eat salmon. Question 3 is aimed at the one or two most important reasons for choosing salmon whilst question 4 looks at the least important reasons. The choices given include:
Health benefits
Environmental standards of the salmon industry
Welfare standards of the salmon industry
Ease of preparation/ cooking
Type of feed that salmon are fed
Colour
Taste
Availability of organic salmon
Availability of wild caught salmon
Others/don’t know/none of these
The total number of responses adds up to 163%. This shows that some respondents have given one answer whilst others have given two. This does not help in deciphering the real reasons why consumers choose to eat salmon. It would have been preferable if respondents had been asked to ascribe 1 to their first choice and 2 to their second and so on. Instead, the responses are confused.
Respondents said that taste and health benefits are equally important with 55% of respondents selecting both. We believe that both are important but not in equal amounts. We would suggest that taste is the primary reason why consumers buy salmon. The fact that salmon has health benefits is an added bonus. We are not convinced that consumers who do not like salmon would eat it simply for the health benefits, especially as there are alternatives available. As the responses are not weighted, they have overstated the reasons for buying salmon. This becomes clearer when the figures are broken down according to the frequency of salmon consumption. These imply that consumers who eat salmon once a week, do so for the health benefits whilst those eating it more than once a week or less than once a week do so for the taste.
The next two reasons for choosing salmon are ease of preparation and the price. Welfare and environmental standards are of least importance.
Question 4 could have been avoided completely if the respondents had been asked to put their reasons for choosing salmon in an order of preference. The researchers explain the results in just two lines which show how irrelevant this question is and if questions all have a cost in this survey, then this question was a total waste of money. The final questions of the survey relate to the feed ingredients which are not relevant to why and how consumers buy salmon.
After reading this survey, we, at Callander McDowell, are left none the wiser as to the buying habits of salmon consumers. If anything, we are more confused. Sadly, we believe that this survey was a missed opportunity which could have shown where resources are needed to promote increased consumption of salmon. Instead, it tells us nothing.
Hopefully the new strategic framework will learn from this experience but we are not holding our breath.
We are farmers!: In a recent commentary, former Marine Harvest boss, Atle Eide has suggested that the Norwegian aquaculture and seafood industry is in danger of being left behind by others who are more willing to invest in the new global order. Of course, there are others such as the independent Scottish salmon industry who would vehemently disagree, arguing that Norway is already pursuing an expansionist policy. Yet, Mr Eide contends that even the most visionary Norwegian company has failed to take advantage of the changing face of the global seafood industry.
One reason that Mr Eide has put forward as to why the Norwegian aquaculture industry has been reluctant to look beyond their current activities are the constant pressures of fluctuating prices and disease. He says that these are simply part of their day to day business and yet a few disappointing earnings or downcast media columns make the entire industry forget just how promising its outlook is for the future.
We have always argued that there is too much fixation on farm gate prices, especially on a weekly basis. There is far too much consideration of whether prices have gone up or down a few points instead of looking at the wider picture. Naturally, higher prices bring larger rewards but these are inevitably either immediate or short term and inevitably, they erase any consideration of what action to be taken to avoid problems when prices do fall.
Mr Eide also says that it is important that disease deserves the industry’s full attention and rightly so but the industry has always suffered the effects of one disease or another and if it isn’t PD or ISA, it will be something else. The industry must work towards looking how it can minimise the effects of farming stress and hence reduce the potential for disease outbreaks. However, this does not mean that it should take up the time and attention of the whole company.
We, at Callander McDowell, see this issue in a slightly different light to Mr Eide. We would argue that the fundamental problem is that the aquaculture industry is still too production-led. The focus is still firmly fixed on producing raw fish flesh and not what happens to the fish once it has left the water. All too often we have been told that ‘we are first and foremost farmers’ and ‘it is up to others to decide what happens to the fish further down the supply chain’. Maybe the geographic isolation of many farms reflects a greater isolation from the marketplace but farming companies do clearly need to wider their horizons. Whether this is in the global arena as Mr Eide advocates or whether it is just taking more control of their produce will ultimately depend on the scope and resources of the specific company but either way, it is about looking at the market place and producing what the consumer wants. This is why it is essential to move away from those production-led strategies to ones which are more market-led.
The global seafood industry is changing and those companies, not just Norwegian owned, that will be successful, are those that can broaden their activities away from a reliance on primary production. It is clear that as the harvest of whichever species expands, prices and profits will be squeezed meaning margins will have to be recovered elsewhere. Farming is part of a wider food industry and cannot be separated from it. There is a real danger that those who remain so will be left behind.