Callander McDowell
Callander McDowell
reLAKSation no 404
Question?: One of the most repeated questions we, at Callander McDowell, are asked at the moment is whether we have seen any movement in salmon prices in the retail sector. The answer is no.
Although farm gate prices have risen dramatically over recent months, (NOK 35.03/kg in week 24 compared with NOK 27.28/kg for the same week last year), the price of salmon in the retail sector has remained relatively stable. The only significant price change has been a £1/kg increase in the lowest price ‘value’ salmon fillet offered by some of the main supermarkets, although whether this has affected sales is unknown. So by and large, retail prices, at least in the main retailers, have remained the same.
There is a simple reason for this. Most consumers are unwilling to buy salmon at any cost. There is a price level above which they stop buying salmon. In 2006, the last time prices shot up to record levels, consumption in the traditional salmon markets fell, although it was not so apparent to farmers because of short-term strong demand in other markets. If salmon prices continue to rise, the industry is in danger of alienating many consumers who have bought into farmed salmon because they recognise that it is (or was) a value for money, healthy-eating meal choice. High prices will instead return it to its former market image of a high value luxury product, but then there will be many fewer people prepared to buy it.
So far it seems that the main retailers have been able to protect their customers from any price rise because much of their salmon is bought on contract. This means that shoppers are still benefiting from when prices were lower. As it happens, this is not the only way consumers are benefiting from lower cost salmon. Nearly every supermarket has chilled salmon on promotional discount in one form or another. This is not a unique week for there is always salmon on offer in at least one supermarket chain.
Current deals include:
Asda: Young’s salmon fillet £8.33/kg on multibuy down from £12.00/kg
Coop: Salmon fillets £12.50/kg down from £16.62/kg
M&S: Lochmuir salmon fillets with a marinade. £13.80/kg on multibuy down from £18.42/kg
Morrisons: Salmon fillets with a marinade £12.42/kg down from £14.08/kg
Sainsbury’s: Salmon fillets 50% extra free £8.86/kg down from £13.30/kg
Somerfield: Young’s salmon fillets £9.54/kg down from £20.75/kg
Tesco: Finest salmon fillets £15.90/kg down from £18.19/kg
Waitrose: Salmon fillet £11.11/kg on multibuy down from £14.97/kg
However, none of these deals represent the cheapest salmon available. Value fillets at £7.98/kg (NOK 84.45/kg / €9.46/kg) can still be bought in more than one supermarket chain.
Customers at independent retail fishmongers may not have been as lucky since these retailers may have to buy in their fish at prices nearer to the changing spot price. As a result, customers of these retailers might find that the price they pay may have increased.
We have written previously that we believe that much of this price increase has been driven by the expectations, rather than the realities, of the marketplace. Concerns of shortages caused by ISA in Chile have helped pushed up the price even though salmon exports from Chile rose in the first quarter of the year. Clearly, Chilean production will fall this year, but elsewhere it is set to increase. The shortfall may not be as great as expected, especially if the price begins to deter consumers from buying salmon. In 2006, the Russian market buoyed up the market but this year IntraFish reports that some Russian supermarkets have already complained that salmon is now too expensive for their customers. At the same time, reports suggest that US buyers are rushing to Europe to seek alternative supplies of salmon even though higher prices may bring farmed salmon further into line with home caught, wild Alaskan MSC certified salmon and thus less attractive to the US market. After all, the only reason that farmed salmon has dominated the US market is because of its relatively low cost. Whether US consumers will be so ready to buy it at a higher price is uncertain as they may simply look for cheaper alternatives.
When salmon prices peaked in 2006, there didn’t seem to be too much concern from the marketplace. This was possibly because the market recognized that the price increase would be short-lived. This was because it came about as a result of the removal of the MIP which was unlikely to have any effect on the market anyway. The price rise was simply a response to the uncertainty, as is the current price rise. Yet, this time, there will be no quick fix as it will take some time for the Chilean industry to fully recover from its problems. The difference between 2006 and now is that for the first time, industry concerns seem to have filtered down to way beyond the farms.
We have been sent a copy of a three page special investigation into the price of salmon, which appeared in the most unlikely of newspapers – The Jewish Chronicle. The issue dominates the front page and their investigation questions whether this is the end of the line (confusing the issues with the film of the same name) for affordable salmon? The paper spoke to smokers, wholesalers and retailers as well as seeking the views of random consumers. Salmon consumption is especially high within the Jewish community, both fresh and smoked (The art of smoking salmon is said to have arrived in Britain with Jewish immigrants during the nineteenth century) and therefore it is clearly important that it remains at a reasonable price. However, the salmon industry can take heart that this is one section of the population that are prepared to bear a higher price so that they can get their salmon fix. Whether the rest of the public will be so keen will only become apparent if prices continue to rise.
The salmon farming industry is clearly benefiting from these higher prices but only time will tell if the cost of these higher prices will damage the established salmon market?
Do they work?: We would like to thank Drew Cherry at IntraFish for undergoing the ordeal of watching a range of TV adverts found on ‘You Tube’ to bring subscribers what he considers to be the best of the bunch. His top five pick includes adverts from John West, Young’s and Chicken of the Sea.
The problem of gauging whether an advert is a success is made difficult because many are of their time and can now look dated and even bizarre, which is how Mr Cherry describes Bird’s Eye adverts from the 60’s and 70’s. He might consider these bizarre but we look back fondly at adverts that made regular appearances in our lives. At the time, such adverts must have been extremely successful given the number of years they continued with the Captain Bird’s Eye theme.
Mr Cherry also wonders how the latest MacDonald’s advert was given the go ahead, based as it is on some kind of singing animated sea animal suggesting that they are out of kilter with modern mass marketeering. Our guess is that it is because this is not just any kind of animated sea animal but rather ‘Big Mouth Billy Bass’ a really popular animaltronic singing ‘executive plaything’. Its success with the public meant it became a cultural icon featured in many TV programmes including South Park, CSI, The Sopranos and The Office. It is no wonder that McDonalds have decide to tap into this culture and why it was given the go ahead. How effective it will be remains to be seen.
It is never clear whether an advert will be a success or not. The measure of its success is often whether it registers on the viewer’s consciousness. It is simply enough that the advert is later remembered. Many adverts are designed to reinforce the message over a period of time so the immediate benefit of sales is not always that apparent.
We have been prompted to write about TV advertising not by Mr Cherry’s review but by a subsequent letter that was written by Marine Harvest’s Arne Sorvig about his time working for the Norwegian Seafood Export Council in Spain. Mr Sorvig writes that in his opinion TV advertising of seafood works, a view based on the results of a three spot advertising campaign run for eight weeks on Spanish TV during 2003. He reports that year-on-year export growth over this period grew to 64% as compared to 15% for the rest of Europe. 2003 ended with 18% growth for the whole year.
These are certainly impressive figures but it has struck us, at Callander McDowell, that the results may not be so clear cut as they might seem. This is for two reasons.
The first is that Spanish seafood consumption is one of the largest in Europe and thus growth will always be more impressive for Spain than the rest of Europe, especially when consumption for all European countries is averaged out.
However, secondly and more importantly, 2003 was a critical year for the salmon industry in that salmon prices fell to their ever lowest point. Salmon was both cheap and readily available. The NSEC adverts just happened to run at a time when salmon was an extremely attractive purchase, especially in a country with a very high rate of fish consumption. We suspect that price was the real driver of this growth and not the advertising. Perhaps, if the adverts were updated and then repeated today we might find that the results would be very different.
Certainly, other advertising campaigns, such as the EU mediated joint generic promotion have been long forgotten for a very good reason. Given the cost of advertising on TV, we imagine that there will be much more cost-effective ways to promote seafood in today’s market.
Action and reaction: The last issue of reLAKSation concerning the film ‘the End of the Line’ created a great deal of interest from our readership for which we are extremely grateful. There was also continued interest in the media, especially with regard to the reaction from various stores and restauranteurs. This began even before the film was released with Michelin-starred chef Tom Aikens challenging the global restaurant industry to take sourcing seafood responsibly.
Mr Aikens, about whom we have written before because of his attempts to persuade his customers to eat sustainably, spoke at a preview of the film especially screened for chefs and restauranteurs, where he urged them to sign a petition to commit to sustainable sourcing. He said that this won’t be easy and that ‘we may well make mistakes.’ Mr Aikens should know he has made a few on the way.
Earlier this year, the Times highlighted how serious Mr Aikens was to sourcing responsibly. In order to escape more than £3 million of debts to suppliers, investors and the taxman, Mr Aikens put his restaurants into administration and then immediately bought them back again through a prearranged deal with a private equity company. His two restaurants never closed but his suppliers were left £847,000 out of pocket including his fish supplier Southbank Fresh Fish who lost more than £8,000. Leslie Ironman from the company said that the way that this was done to small suppliers could not only have put them out of business but also out of their homes. He said he won’t be doing business with Mr Aikens again. His supplier of lamb, a farmer from North Wales added that he is a top chef and should be setting an example to others instead, his actions are dishonourable.
As well as being dishonourable, Mr Aikens seems to have some difficulty in identifying the source of his sustainable seafood. The urban gardener writing in the Times newspaper relates how she received a tweet (a message sent via twitter) from uberchef Tom Aikens about a new dish on his menu – hand-dived scallops from Dingwell in Scotland, with peas, broad beans, asparagus, pea shoots, summer truffle, and chervil. She describes this recipe as a beautifully crafted celebration of seasonality. However, it was the hand dived scallops that caught our attention. There is no place called Dingwell, but Dingwall is at the head of Cromarty Firth, somewhere not renowned for its scallops. What Mr Aikens alluded too seems to be that he buys his scallops from a Dingwall company, Keltic Seafare, who distribute scallops that are caught in the Class A waters off the West Coast of Scotland, something that Mr Aikens seems to be unaware of. It just shows how much effort he has made to research the source of his scallops.
One person to watch a preview of the film was Julian Metcalfe, founder of the sandwich chain Pret A Manger. Mr Metcalfe told the Daily Telegraph that he was so horrified by the film that he order the removal of all tuna from the shelves. This meant that no more tuna and cucumber sandwiches and no more tuna in the sushi from either Pret or its sister chain of sushi stalls Itsu. Mr Metcalfe suggested that instead of tuna, his customers could buy Alaskan salmon which he said is a sustainable alternative.
Yet after this high profile rejection of tuna, it seems that Pret A Manger has experienced an about turn. Someone has clearly explained to Mr Metcalfe the difference between the Blue fin tuna highlighted in the film and the Skipjack tuna used in their sandwiches. As a result, Pret A Manger has resumed its selling its tuna baguette emphasising its Dolphin Friendly pole and line fishing method.
Another restaurant to undergo a conversion since the premiere of the film is Zilli Fish, which IntraFish describe as a top London sushi restaurant, but is actually more a conventional fish restaurant. The London Paper, a free newspaper has orchestrated a campaign to highlight the Price of Fish to which chef Aldo Zilli has responded. The paper reports that he will stop selling Bluefin tuna, Atlantic cod, swordfish, white skate and Dover sole from the North and Irish seas with immediate effect. Instead he will offer only fish approved by the Marine Stewardship Council (MSC) including organically farmed cod, Alaskan salmon, red snapper and spider crab.
Yet, again a leading chef appears to be confused about the sourcing of sustainable seafood. Alaskan salmon is certainly MSC certified but as the MSC has refused to certify any farmed fish, it seems unlikely that organically farmed cod is MSC certified, irrespective or not of its organic status. We are equally sure that neither the Red snapper or the Spider crab have been certified by the MSC.
However, the MCS (Marine Conservation Society) do say that Malaber Blood Snapper from West Australia are safe to eat as are Red snapper from the Western Australian trap fishery. They are not so keen that consumers should eat ‘Vermillion’ and ‘Lane’ or ‘Silk’ and ‘Yellowtail’ and recommend that Cubera, Mutton and Northern Red be totally avoided. These are species of snapper that consumers are unlikely to see in the mainstream retailer sector so how relevant the MCS advice is unclear.
It is not just chefs who are confused by who says what is acceptable to eat and what is not. The Mail on Sunday have recommended that amongst other species that can be eaten are MCS certified Pacific cod, MCS Pacific salmon and MCS Dover sole from the Eastern Channel as well as MCS Herring from Hastings. Of course, the journalist has referred to the Marine Conservation Society list and assumed that the MSC certification actually relates to the MCS instead.
Certification of sustainable fish is of course undertaken by the Marine Stewardship Council. In the aftermath of the film, news broke that Marks & Spencer will now change to pole and line caught tuna across its entire food range. M&S have already committed to ensuring that all the wild fish they sell, whether fresh or processed, is to be MSC certified or equivalent. In a recent press release, M&S advised that 20% of the wild fish sold is now MSC certified or part certified (surely it is certified or it isn’t). Seemingly, canned tuna was not considered as part of their 2007 Plan A.
In an article in the Mail on Sunday, Charles Clover said that much of the success of getting companies like M&S to change their buying policy has been down to the recruitment of a whole host of celebrities who have raised the profile of the dilemma of the Bluefin tuna. Amongst the stars who helped promote the campaign has been actress Greta Scacchi who took her clothes off to gain the maximum publicity. Her blushes were hidden by a large (and sustainable) cod.
Interestingly, Ms Scacchi’s sacrifice has slightly backfired as whilst the media gave extensive publicity to the pictures, most of the articles about her and the fish focused not on the campaign but rather on the increasing habit of forgotten celebrities jumping on the bandwagon (often naked) in the hope of raising their own profile too.
Whilst the publicity surrounding this film now seems to have died away, the subject received another airing last week as part of a TV series shown on the BBC which looks at the South Pacific. This last programme focused on exploitation of the oceans and explained the problems of over-fishing much clearer and more succinctly than the film.
How much impact the film has made can best be illustrated by an article/recipe in the Times newspaper this weekend written by that well-known chef Gordon Ramsey. He recommends that when buying salmon to always go for the best that can be afforded. He advises that if you want to splurge opt for wild salmon, which are in season for around six week from the end of May. He adds that they do not come cheap but their amazing deep coral colour and fantastic flavour are worth the price. What he fails to mention is that according to the MCS, wild salmon should be completely avoided because of concerns about their sustainability.
Alternatively, for everyday occasions, Mr Ramsey recommends organically farmed salmon or salmon that has been certified by a trusted conservation society such as the Marine Stewardship Council (MSC) whom of course we all know don’t certify farmed fish. Its good to know that even the best known celebrity chef has such high regard for issues of sustainability!!!