Callander McDowell
Callander McDowell
reLAKSation no 402
The price of stability: Steven Damaco of US company ‘Changing Seas’ told IntraFish that he believes that long-term contracts and stable deliveries are much more important to him than the current high salmon prices. He thinks that it is the resulting stability that will drive the market and that consumers will be undeterred if they have to pay a little bit more to buy salmon. He says that the market just has to have salmon. He also thinks that the price in the US is still competitive, pointing out that European consumers actually pay more for their salmon than their counterparts in the US.
We can understand that both long-term contracts and stable deliveries are desirable to all those in the supply chain. Equally, consumers don’t like to see the prices of the foods they buy to fluctuate widely but at the same, they are not so keen to see prices rise even for a short time. Rising prices in 2006 certainly deterred many consumers in the traditional European market and consumption fell as a result.
This current period of higher prices has yet to impact on consumers because they have been so far protected by existing contracts. As a result, there has been minimum change to the price of salmon sold through the main retailers. What will happen when these contracts come up for renewal is a different question but we are sure that Mr Damaco’s view that the market just has to have salmon will not hold and certainly not if it is a case of salmon at any cost.
We have previously argued that US consumers are unlikely to continuing buying salmon if prices continue to rise as the result of any shortfall in salmon supply. There are plenty of cheaper alternatives for consumers to buy. Growth of the US market for farmed salmon was driven by the widespread availability of value for money fish. We suggest that consumers are unlikely to be so willing to buy if the price rises.
Our view appears to be borne out by the latest experience of the wild salmon industry. IntraFish quotes Hap Symmonds of Ocean Beauty Seafoods who spoke to the Cordova Times. He said that the price of Copper River Sockeye is now half of what they were at the start of the season, just three weeks ago. The price paid to fishermen has fallen from $3.55 (€2.50) per pound in mid May to just $1.75 (€1.23) per pound. Mr Symmonds blames the economy saying that consumers are not going to pay exorbitant prices at this time. This reluctance to spend money is why retailers are not moving as many fish as expected.
IntraFish report that retailers in Seattle who were getting $30 (€21.16) a pound at the start of the season are this week running ads touting it for $10.99 (€7.75) a pound. At the time of writing (a day later) we, at Callander McDowell decided to look for ourselves and found that at least two Seattle supermarkets, Safeway and Rosauers are actually offering Copper River Sockeyes for just $9.99/lb (This equates to £13.66/kg / NOK 139.80/kg / €15.60/kg). What was more interesting was that a Thrifty Supermarket located about 50 miles from Seattle was selling farmed Atlantic salmon for just $3.99/kg (£5.50/kg / NOK 56.30/kg / € 6.28/kg). This is much cheaper than the salmon we found during our last review of the US market (reLAKSation 398). It still seems that retail salmon prices bear little relationship to the current high market price.
A price of $3.99/lb for farmed salmon does seem to confirm Steven Damaco’s view that European consumers have to pay more for salmon than those in the US. However $3.99/lb is unusually cheap. Our earlier examination of US retail prices actually suggests that salmon prices in the US are similar to those in Europe. It’s all really a matter of which store you are prepared to visit.
Failed all round: Greenpeace Canada recently released its latest rankings of Canadian retailers based on their seafood sustainability policies and failed all eight supermarkets which they assessed. According to Greenpeace, some retailers have made some progress but others have completely ignored the problem.
Now Greenpeace has announced that they intend to publish an updated report ranking US supermarkets. Previously, only four out of twenty US supermarkets had reached the minimum pass grade of 40 out of a possible 100. The highest score reached by a Canadian store was just 24.
Gavin Gibbons of the National Fisheries Institute told Seafoodsource.com that the latest reports come as no surprise since they are part of the campaign to persuade retailers to stop selling red list seafood or species that it says are harvested or farmed in an environmentally irresponsible manner. Of course, Greenpeace’s view as to what is considered irresponsible is a matter for debate since one of the species included on their red list is farmed salmon.
We, at Callander McDowell, have always argued and will continue to do so that the only way to protect stocks of wild fish from over-exploitation is to provide fish and seafood from an alternative source. As with all other forms of food supply, this means by farming. Sadly, Greenpeace remain blinkered to farming which they see as environmentally damaging. However, the reality is that everything man does has an impact on the environment. This does not mean that we should stop farming, but rather that it should be conducted with the most possible care and consideration. The problem seems that even this doesn’t always meet Greenpeace’s expectations.
The problem with Greenpeace’s expectations is that they see what they want to see rather than be willing to look at the realities and simple truths. In their evaluation of the Canadian retail sector, Greenpeace have pronounced that none of the eight supermarkets they evaluated meet their minimum expectations for sustainability. After reviewing each supermarket, their Canadian report, which is entitled ‘Out of Stock, Out of Excuses’, Greenpeace have highlighted those retailers in other countries that they believe have taken strong steps to ensure the long-term sustainability of the seafood they sell. However, we wonder whether some of these steps are as thorough as Greenpeace would have us believe. Whilst we don’t question that these supermarkets are trying their best to instigate a more sustainable seafood policy, we do wonder how much of their efforts are intended to appease the environmental lobby rather than their customers.
Two of the four supermarkets cited by Greenpeace are British and a third has an outlet in the UK so we are ably qualified to make our own observations of what each supermarket has achieved. One of the supermarkets highlighted is Sainsbury’s. Greenpeace state that ‘In it’s effort to ‘remove the worst’ wild caught seafood, Sainsbury’s have stopped selling Greenland halibut, Baltic cod, Dover sole, plaice, snapper, haddock, monkfish and swordfish. For farmed fish, conventionally grown salmon, sea bass, sea bream, rainbow trout and prawns are no longer sold.’
As with many supermarkets, variations in local demand mean that every store does not stock every product. We, at Callander McDowell, believe that we monitor sufficient key stores as part of our retail surveys to ensure that we cover the whole range. It is of course possible that we might miss something that is not stocked elsewhere. However, we have seen Black halibut (Greenland halibut) on sales in Sainsbury’s (£9.99/kg), plaice (£9.79/kg), Red snapper (£11.90/kg), haddock (from £7.96 – £14.99/kg), monkfish (£21.50/kg) and swordfish (£15.90/kg). Whilst Sainsbury’s can claim that their own-label salmon is ethically farmed in Scotland under the Freedom Food label, they also sell other farmed salmon under a variety of brands that is not. In addition, Sainsbury’s claims for farmed salmon do not appear to have been extended to other farmed species.
In highlighting the differences between what Sainsbury’s do and what Greenpeace say they do, is in no way intended as a criticism of Sainsbury’s policies. They are certainly trying to do what is right. Their latest aim is to ensure that all their five best selling species will either be MSC certified or green rated against their sustainability rating system by the end of 2010. These are cod, haddock, tuna, salmon and prawns.
Instead, what this shows is that Greenpeace have not done their research and it brings into question the validity of their evaluation of all North American supermarkets.
The second store group is the Co-op in the UK. The Co-op says that they have opted for the most ethical trading possible in all their businesses, not just food. Their fish products are labelled to suggest that the fish is sustainably fished or responsibly farmed but their customers just have the Co-ops’ word for that.
We can find no mention of their fisheries policy on their website, although they detail their environmental and animal welfare polices. They do mention that they had delisted huss and skate in response to requests from the Marine Conservation Society, although having visited many Co-op stores, we suspect that neither species was a big seller, if ever on sale. Although Greenpeace cite the Co-op’s efforts towards sustainable fishing, the last supermarket league table from the MCS actually placed the Co-op in seventh place in 2007, down from fifth in 2006.
Finally, Greenpeace cite Wholefoods as making sustainable seafood a priority although they do say that they have concerns about the farmed seafood sold by the retailer. Greenpeace did not evaluate Wholefoods in Canada because they say they do not have a large enough presence in the country. The same is true in the UK where they opened just one large store, although they subsequently took over a small chain of organic stores based around London.
When Wholefoods opened in London, the store included a very large and impressive fish counter, although much of the fish was poorly labelled, perhaps because this US retailer was not familiar with more stringent UK labelling legislation. It was therefore impossible to assess the sustainability of the fish they sell. Subsequently, we would suggest that Wholefoods have taken great strides to reduce their impact on fish stocks. They have done this with a revamp of the store and a massive reduction in the size of the fish counter. This is a now a shadow of its former self and offers a much reduced range of fish. Of course, this is a response to the fact that consumers were simply not buying fish from Wholefoods rather than any concerns about sustainability issues.
It is World Oceans Day this coming week and fish sustainability will be highlighted with the release of the film ‘End of the Line’. We have managed to secure a seat at one of the screenings and will discuss this subject more in the next issue of reLAKSation. It will no doubt show whether there is real consumer concern about sustainability or whether this whole subject is being driven solely by the environmental groups.
Colin again: Further to our previous observations concerning the renaming of pollock by Sainsbury’s, the supermarket has now announced that sales of the new ‘Colin’ increased by 68%. This is based on a limited edition of 2,000 packs trialled in ten UK stores.
As we previously recounted, we, at Callander McDowell, tried to find the packs in three of the ten selected stores without success. When we spoke to staff and management, they were just as mystified as we were, most only aware of the product through reading about it in their newspaper.
We have wondered that if the product wasn’t actually in store, then how could sales be recorded, let alone increase. Having now managed to track down the packaging, the story has become much clearer. The new Wayne Hemmingway designed packaging is actually a sleeve that slips over the existing packaging leaving access to the bar code and other information. It seems that Sainsbury’s are actually unable to tell if the sales of the product are those without the sleeve or not. What they cannot know is whether the increase is due to the novelty of the sleeve or increased awareness of the product as Sainsbury’s actually claim. As only 200 sleeves were despatched to each store, the sample is too small to draw any direct conclusions (and in some cases, we are not even convinced that the sleeves were actually put onto the packs).
Sainsbury’s argued that the reason for changing the name from pollock to Colin was because many consumers were too embarrassed to ask for pollock (although in the case of the ‘Basics’ fish fingers which were used in this trial, customers only had to pick them out of the freezer which did not entail asking for them. (Perhaps if customers are so embarrassed, the packs should be covered with a plain brown sleeve rather than one with an eye catching design that draws attention to itself?)
What is more puzzling is why Sainsbury’s felt the need to instigate this name change at all. This is because Sainsbury’s have reported that that in the last year, they have sold 14,000,000 Basics fish fingers, double the number sold the previous year. It thus seems that Sainsbury’s customers have overcome whatever embarrassment they might have had and are buying these fish fingers in huge numbers. However, with a bright new sleeve, a further 68% increase would be clearly worth the effort if it were to be repeated across the whole of the supermarket chain.
So what is the secret of Sainsbury’s success? Could it be that the fish fingers are made from MSC certified Alaskan pollock? Interestingly, the press release announcing the massive growth of sales makes no mention of sustainable fish or the MSC. Instead, Sainsbury’s attribute the increased sales to the use of sustainable palm oil in their manufacture. Only certified palm oil is use in Sainsbury’s frozen fish range including Basics fish fingers. It seems that palm oil is the answer.
The Basics fish fingers are Sainsbury’s own label product and they must know the product, their sales and their customers inside out, but we doubt whether palm oil is the reason for customers buying these fish fingers in such numbers. We think that there is a more likely explanation.
When Sainsbury’s launched their Colin fish fingers, they were retailing at just 47p for 10 as compared to £1.79 for Bird’s Eye cod fish fingers. Prices have changed since, and the Basic fish fingers now cost £2.76/kg as compared to £7.11/kg for the Bird’s Eye product. Bird’s Eye pollock fish fingers also sell for £7.11/kg under their omega-3 brand, whilst Sainsbury’s own label cod fish fingers are £4.98/kg. The price difference is significant. We believe that ‘Basics’ fish fingers sell well because they are cheap and for no other reason.
To bring this story to a close, we would mention that Sainsbury’s attempt to rename pollock may come back to bite them. ‘Trading Standards’ are now looking at whether the use of the name ‘Colin’ has contravened the labelling legislation as it is not listed as an approved name for selling fish.