Callander McDowell
Callander McDowell
reLAKSation no 427
Battles ahead: Data from the US has shown that salmon imports for the year through to September are almost identical to those for the same period in 2008. This year, the US has imported 181.4 million kilos compared with 181.7 million kilos last year.
According to IntraFish, figures from the National Marine Fisheries Service show that imports of fresh Chilean fillets fell from 58.7 million kilos to just 35 million. At the same time, imports of fillets from Norway have increased from 1.5 million kilos to 13 million and the 1.3 million kilos from Scotland have increased to 2.9 million this year. The shortfall in fresh fillets was offset by imports of frozen and whole fresh fish.
This change in the origin of the farmed salmon sold in the US has been prompted by the ongoing problems in Chile. Falling production has meant that Chilean producers have been unable to meet US demand, prompting a surge in the volumes coming from European producers. Chilean exports are expected to fall further next year although production is expected to recover from then on.
Chilean producers have tried to diversify their markets. Many years ago, it was thought that exports would be divided equally with a third of Chilean production ending up in Japan, a third in Europe and a third in the US. However, the US was the natural market for Chilean salmon which is why Chilean salmon became so dominant As Chile begins to recover, exporters will not be deterred by the presence of European salmon and will seek to reclaim their lost market share. This means that even more salmon than ever will flood into the US market.
Unfortunately, this will not be without problem, for whilst the origin of the salmon sold in the US market has changed, the size of the market has not. In fact, the market for salmon in the US appears to be in decline. Figures from the National Fisheries Institute have shown that salmon consumption fell in 2008 to 1.84lb per person from 2.36lb the previous year. If this trend continues, then the salmon market in the US is likely to become a crisis in waiting. This is because producers cannot continue to throw salmon at the US market without a significant increase in consumption.
At the moment, this is not perceived to be too much of a problem. Prices are good, companies are profitable and the forecast is that Chile will not have much more to sell until at least 2011. The need for action is currently of low priority. However, as experience has shown, the build up to a crisis can come round remarkably quickly. Market development does not happen fast, whereas production can grow with alarming speed.
Increasing concerns about the pace at which Norwegian production continues to grow has led Geir Isaksen, CEO of Cemaq, to warn that growth is in danger of being out-of-control. According to IntraFish, Mr Isaksen said that Norwegian aquaculture cannot continue in the manner it has done. He added that Norwegian growth has helped fill the gap left by Chile’s problems but that it isn’t wise to continue in this way as Chile will make a rather swift comeback.
Of course, continued production growth does not have to be a problem as long as THE INDUSTRY INVESTS IN MARKET DEVELOPMENT. Unfortunately, there seems a great reluctance to do so. This is because the market for salmon has always grown with growing production. However, whilst there is still enormous market potential for farmed salmon, future growth may need that extra push to make it happen. In the past, this push has been the result of value for money pricing in which consumers have recognised that salmon makes an excellent meal choice. Now value for money pricing may not be the main driver, which is part of the reason why salmon consumption has stalled.
Without any market development, salmon prices will inevitably collapse as the US market becomes saturated with too much salmon. This can only be avoided if alternative markets are identified or more consumers can be persuaded to eat salmon.
The Norwegian Seafood Export Council has opened an office in Boston to promote Norwegian salmon. However, the emphasis is placed firmly on the Norwegian origin of the fish rather than on the salmon. Thus, the strategy appears to be to gain a greater share of the existing market rather than expand the overall market. We have discussed the various promotional activities that have been undertaken previously (reLAKSation 422) so won’t cover old ground here. NSEC has now announced the launch of a new website ‘Salmon in Seconds’ which tells consumers how to buy, prepare and cook Norwegian salmon. Of course, everything they say is relevant to any salmon, not just salmon of Norwegian origin. We are not sure which consumers are expected to visit the website but we don’t think that those consumers who do not eat fresh fish are likely to be interested in the content at all.
Although there are no visitor figures on the website, the number of viewings on You Tube is only around a couple of hundred. (We don’t know if the site viewings of the videos are registered on You Tube so it could well be much higher) However, the number of followers on Twitter is just 216. Given the population of the US is over 300 million there is clearly a long way to go. New technology is a cheap and simple way to reach consumers but it is not enough to have a presence, there needs to be way to attract consumers and if consumers are not interested in the product, then they won’t be interested by the new technological ways to reach them.
Instead, salmon producers need to see what type of foods these consumers eat and how their own products can be positioned so they attract consumer attention. Currently, there is too much focus on the raw salmon flesh and this is simply not enough to widen the market unless the industry tries to persuade those who eat salmon to eat it more frequently.
Nine recipes: The challenge facing the salmon industry to get consumers to start eating fish is illustrated by the news that the average British mother relies on just nine different meals to feed the family. Reuters report the results of a study of 4,000 families by Merchant Gourmet that discovered that hectic lifestyles, fussy children and partners who work long hours mean than mothers are stuck in a rut when it comes to experimenting in the kitchen.
Ninety per cent of mothers admitted to cooking the same meals over and over again while 25% made the same meals on the same day every week. The survey found that people are put off experimenting with new meals and ingredients as they are convinced it will be time consuming or expensive, especially if the family then refuses to eat the new dishes.
Interestingly, whilst food producers often turn to celebrity chefs to promote their products, most of those surveyed found that the recipes in the celebrity cook books were often too complicated with too many expensive ingredients. Most families have about eight cook book but have only tried five recipes. A third of those surveyed only kept celebrity cook books to impress visitors and will only experiment if they were cooking for a dinner party.
The top nine meals used by British mothers are:
1. Spaghetti Bolognese
2. Roast dinner
3. Shepherds pie/Cottage pie
4. Pasta dish
5, Meat and two vegetables
6. Pizza
7. Casserole/stew
8. Sausage and chips or mash
9. Curry
It doesn’t take much effort to notice that there is a significant omission from this list: There is no fish or seafood.
- not even fish and chips.
The fish industry would like to believe that fish is a popular part of the British diet. This may be true if we include take-away meals but when it comes to home cooking, fish remains elusive. Clearly much has to be done to encourage consumers to buy and cook fish in Britain. We suspect that the challenge will be even greater in the US.
Commenting on this report, celebrity journalist and broadcaster Vanessa Feltz wrote in the Daily Express that she couldn’t believe that families had a repertoire of nine recipes. She could only think of five. As someone who has battled with her weight Vanessa does eat fish and her list includes Roast chicken, baked salmon, Spaghetti Bolognese, Sticky chops and fish pie. She says that anything else takes effort, energy and a recipe book. Instead she resorts to toast – cheese on toast, beans on toast, toast and jam and the perennial crowd pleaser toast and butter!!
She may be half joking although we suspect that what she writes is not that far from the truth. What is of concern is these additions to Vanessa Feltz’s recipe list may not that uncommon.
In the red corner: John Schramm, CEO of Tropical Aquaculture told IntraFish that the competition for tilapia does not come from other tilapia producers but rather meat and chicken. He says that consumers are looking for value and the supermarkets heavily promote chicken, pork and beef. Mr Schramm believes that these meats are his true competition and we would wholeheartedly agree.
As can be seen from the British survey, consumers are comfortable buying the same foods time and time again making what they know and trust, usually at an affordable price. The seafood industry might be promoting the health benefits of eating fish but if consumers are not comfortable buying fish then even the positive health message is not going to change their regular shopping habits. Consumers are more likely to eat fish out rather than at home and this is the divide that needs to be broken down.
Mr Schramm believes that price discounting will help him retain customers but we suspect that consumers buying his fish have not swapped from meat to tilapia but rather from another species of fish. His consumers are probably already existing fish consumers and not those who always buy meat.
We suspect that persuading consumers to crossover from meat to fish is extremely difficult. One of the latest promotional tools used by some British supermarkets is the mixed multi-buy. Consumers have begun to object to Buy One Get One Free offers because they say that they don’t want twice as much of the product than they need, especially foods with a short shelf life. In response, supermarkets have turned to offering the opportunity to select different products such as in the 3 for £10 deal. One such deal currently in place offers 385g rump steak, 353g lamb steaks, 690g pork chops, 508g chicken fillets or 450g gammon steak. All packs are priced at £4. Customers can buy three different, two of one and a different third or three all the same. Sometimes the deal has included fish. This one supermarket has offered 350g salmon fillets and 400g smoked haddock at different times. What is interesting is that the fish choice is not regularly included and when it is, the number of packs on display is much less then the other products. This suggests that the take up is poor probably because few consumers opt for the fish option even when competitively priced and positioned where it can be accessed by a wider customer base.
Clearly, there is more to getting consumers to buy fish than direct substitution. The same can be said for vegetarians, who often complain that rather than coming up with adventurous new vegetarian meals, home cooks often just substitute textured vegetable protein (TVP) in dishes instead of the meat. According to IntraFish, Marine Harvest are trying a similar approach with the launch of their new salmon mince; a direct substitute for beef mince. Marine Harvest say that salmon mince is offered as a healthy alternative for something that is already well-known to consumers and can be used in all recipes that usually require mince.
As we suggested, direct substitution does not always work well and we suspect that in the case of salmon mince this may well be the case. If we consider some of the nine most popular dishes in the UK, we cannot see how the recipe for spaghetti Bolognese would work with salmon, even though salmon does work well with pasta. Certainly, salmon mince would not be a success in cottage or shepherds pie (beef or lamb mince with a mashed potato topping) although salmon is an essential component of traditional fish pie (fish chunks with a mashed potato topping).
Direct substitution seems unlikely to attract new consumers to eating fish and especially salmon. Instead, we believe that the only way to attract these consumers is to look at what they currently buy and adapt fish to produce similar products. At least this way, consumers are on more familiar ground.