Callander McDowell
Callander McDowell
reLAKSation 390
Spot the difference: Karin Olsen, Marketing Manager for whitefish at the Norwegian Seafood Export Council has responded to calls for differentiation of farmed from wild cod. Writing in IntraFish, Ms Olsen suggests that whilst those from both the farming and wild catch sectors are currently experiencing tough times, the way forward must be to stimulate the market and persuade consumers to eat more cod. She argues that time spent separating farmed from wild caught cod will detract from the overall market effort and may well benefit one sector to the detriment of the other. This is because Ms Olsen believes that one sector will promote itself by drawing attention to the negative aspects of the other. Although she doesn’t make any specific reference to any particular attribute, it can be seen that if the farming sector claims that it can supply super fresh cod then the implication is that wild caught fish are not fresh.
Whilst Ms Olsen is right that one way out of the current problems is to stimulate market demand (and hopefully push up prices), we, at Callander McDowell, believe that Ms Olsen has missed the point about the need for differentiation.
Whatever her view about a unified approach for the marketing of ‘Norwegian fresh cod’ the reality is that farmed and wild caught cod are not the same, at least in terms of the economics. In hard monetary terms, it might be argued that it does not make financial sense to farm cod in the current economic climate especially as cod prices continue to fall to what Kyst.no calls a historic low of NOK 20.73/kg
However, there is a cod farming industry and fish are being sent to market and being enjoyed by consumers. It is therefore even more essential that, in this economic climate, everything be done to maximise the potential for profitability and this is why this unified approach is wrong.
Currently, farmed cod is a niche market, although this may change with time. The strategy for taking fish to market is very different from that for the mainstream wild caught fish. The two are very different and this is why separation is not only justified but absolutely essential. What Ms Olsen fails to appreciate is that such separation does not mean that one is boosted to the disadvantage of the other. She suggests that such separation will lead to the promotion of negative aspects of one type of fish or the other. This may be so in Ms Olsen’s world but not in ours. We, at Callander McDowell, believe that the positive attributes of both farmed and wild cod can be promoted separately without harming either. The product may effectively be the same but the market strategies must be very different.
We would have more sympathy for Ms Olsen’s stance if she had not already engaged in some degree of separation between farmed and wild caught fish. Speaking at the cod conference in Iceland last year, she said that the main story is Norwegian Fresh Cod but that this is sub-divided into four main groups; wild, farmed, ranched and Skrei. As soon as she sub-divides Norwegian Fresh Cod then she is differentiating between the four different types. She takes this further with an illustration of a NSEC poster that highlights cod from fish farms. This approach is differentiating farmed cod from wild and is exactly what the cod farming industry would like to take a stage further.
What Ms Olsen didn’t dwell on in her presentation nor mentioned in her commentary in IntraFish is Skrei. This is wild cod with its own separate story which is clearly differentiated from other wild cod. The relevant page on the NSEC website waxes lyrical about the wonders of Skrei without any reference to other cod, either good or bad. Skrei is a separate story and so is farmed cod.
Ms Olsen wants to retain all cod promotion under one banner but there is already separation within this sector. The cod farming industry needs to be differentiated from the wild fish with its own story. It’s up to the market and consumers to spot the difference.
Bye bye: Fishupdate.com reports that Seafood Fortnight, the promotional campaign designed to increase awareness of the health benefits of seafood is to be scrapped, although no reason was given. This comes as no surprise to us at Callander McDowell since as regular observers of the marketplace we were less than impressed by what we saw. Our observations from during the promotion can be found at our Seafood Fortnight report and of previous Seafood Week promotions are available in the reports section of our website.
It seems that SeaFish were also unimpressed by the fortnight long campaign. The minutes of the December SeaFish Board meeting record that Dr Jon Harman, Business Development Director, told the Board that public awareness of the two-a-week message had not developed as much as hoped for. Perhaps this was because putting a sticker on a few packs of fish does not guarantee any consumer awareness. It is just a sticker on a pack.
Dr Harman also told the Board that he proposed an amended approach to the campaign in which the two-a-week message would be the main objective over a whole twelve month period during 2009.
SeaFish have recently announced the new format for this promotion which will take the form of four quarterly promotions. These are:
Feed the family on a budget
Summer BBQ’s
Back to school
New Year, New you
The new plan is to allow both larger and smaller retailers to better understand the way that seafood purchasers make their buying decisions. Karen Galloway, Market Planning & Strategy Manager said that at the moment it is clear that the main driver is value but she also wants to help retailers understand what else prompts consumers to buy fish and seafood.
As yet it is impossible to comment on the new plans until we can see how the new campaigns develop. What is of interest is that the new knowledge of what now drives consumers to buy seafood has come from market research commissioned last year by SeaFish. We discussed this research at the time in issues no 361 and 362. A few of the findings have been released and we plan to discuss them in a future issue of reLAKSation.
Damaging the market: In the last issue of reLAKSation, we discussed how high prices may be good for farmers but may be having a detrimental effect on the marketplace. IntraFish now report that representatives of some of the leading retailers have expressed similar concern during the recent North Atlantic Seafood Forum in Oslo.
Vidar Olsen category manager with Norges Gruppen said that there is a definite roof on how much consumers are willing to pay for salmon. He added that consumers find it difficult to understand why prices can vary so much when other food prices remain largely stable.
Norwegian Seafood Export Council’s Paul Aandahl reminded delegates that when prices rose in 2006, demand was affected for several months afterwards.
The problem for the salmon industry is that it is not direct consumers who are affected when prices rise. The market for processed and added value products can be harmed too. We have previously commented that the range of added value products has shrunk as prices have risen. More importantly, farmed Atlantic salmon is being replaced in some products with cheaper Pacific salmon species. In addition, new products are being made with Pacific salmon when they could have used farmed salmon instead but the price simply makes it uneconomic given that consumers are watching how much they spend. One of the latest new products to hit the shelves this week is a pack of ‘2 Pink salmon fillets in seeded signature crumb’.
The Norwegian industry has been expressing concern that consumers may be turning from cod to low priced pangasius. If salmon prices continue to rise, the salmon industry may need to start expressing similar concerns too.