reLAKSation 79.

Half-Mast? The latest Mintel consumer survey seems to indicate that many British consumers are flying the flag for local produce and have shown a preference for buying food produced in Britain. An analyst for Mintel told Intrafish that half of British consumers try to buy British when shopping for meat, 44% would like to buy British fruit and vegetables and a third look for UK sourced fish.

Within each of the preferences, there is a tendency for the most patriotic shopper to be over 65 years of age and in the AB socio economic group. Thus, older consumers account for about 75% of those who prefer to buy British meat. Similar trends can be seen for both fruit and vegetables and fish.

By comparison, younger consumers show much less preference for buying British. Whilst 31% of all consumers would buy British sourced fish, only 9% of those aged between 15 and 24 show a similar preference. However, responses to buying fish were less clear than for other foods. Mintel think that this is because some respondents confused the idea of buying British fish with traditional British tastes. Thus, they think consumers gave a positive response to British fish meaning that they expressed a preference for cod and haddock rather than more exotic species such as sea bass and tuna.

Mintel suggest that these preferences would indicate that there is an untapped opportunity for selling British produced food, however we at Callander McDowell have yet to be convinced that consumers are so patriotic towards their choice of food.

These findings clearly show that it is the older age groups who have expressed a desire to buy British. Perhaps one reason why is that such older consumers are more fixed in both their buying decisions and their tastes. Yet, such choice can be often clouded by other factors. For example, previous research by Seafish indicated that older consumers are responsible for the majority of fresh fish purchases. The reason given was that older consumers have families who have usually grown up and left home providing the consumer with more disposable income to buy fresh fish and more time to prepare and cook it. This implies that as younger consumers, who do not currently buy fresh fish start to age, they will change their eating habits and begin to buy fresh fish even though they have not done so previously.

This is unlikely. A better explanation might be that older consumers were raised at a time before supermarkets started to exert their influence and they were more familiar with meals prepared from basic ingredients. By comparison, younger consumers are faced with a huge choice of ready to cook convenience foods and feel less inclined to have to come home and deal with the preparation of raw fish. As these younger consumers age, there will be little incentive to change their habits and start to buy fresh fish.

In much the same way, it is unlikely that young consumers, who have expressed no loyalty to home produced food, will suddenly start to do so once they begin to age. These younger consumers are increasingly familiar with international travel, which has stimulated their interest in eating a wide range of foods from around the world.

This view appears to have been confirmed by the Mintel survey, which suggests that a solid core of 40% of shoppers buy whatever is available in supermarkets and do not even look at where it comes from. Certainly, our observations of those supermarkets, which sell salmon from more than one origin, confirm this view. Most consumers never even look at the labelling of the packs they buy, even though origin is clearly identified on pack fronts. They pick up the first pack to hand and put it straight into their shopping trolley.

One interesting aspect of the Mintel findings is that only 10% of British consumers are motivated by price and these consumers are happy to buy the cheapest product irrespective of its origin. This implies that 90% of consumers are less bothered about the price of the product and may be more motivated by the origin. However, the reality of the marketplace is that when faced with a choice, price becomes an important factor in the decision making process to buy. For example, Scottish salmon producers have said that many consumers are more than willing to pay a premium price for Scottish salmon, yet when they actually visit the supermarket such consideration disappears and they opt for value for money instead of being influenced by origin.

James McCoy, the Mintel analyst does suggest that consumer attitudes may not necessarily translate into actions and we, at Callander McDowell would wholeheartedly agree. Consumers may be willing to fly the flag for local produce, but we believe that it is still flying at half-mast.

The answer is..! Earlier this month, the Director General of EU Fisheries, Jorgen Holmquist, posed the question “Is fish farming a long-term answer to the fisheries crisis?”  According to the report in Intrafish, this question remains unanswered. Instead, the debate appeared to focus on defending aquaculture against accusations made by the environmental lobby. Sadly, the central issue appears to have been ignored.

This is nothing new. Back in 1995, a conference entitled “Increasing demand, diminishing supply”, also held in Brussels, and looked at a similar question. Interestingly, the meeting also failed to come to any real conclusion but not because of the influence of the environmental lobby. Instead, it was the participants from both the aquaculture and fisheries sectors that rejected the idea that aquaculture could provide a solution to the fisheries crisis.

Those participants representing the fisheries industry were unhappy that their future was being threatened even though fish stocks were clearly in decline. They felt that properly managed fisheries could supply the bulk of fish to meet consumer demand. They believed that it was aquaculture, which symbolised a threat to their livelihoods.

By comparison, aquaculture producers believed that they were involved in the production of fish for specialised niche markets and did not want to be associated with production for the wider marketplace. They saw that high volume production would undermine the market image of their “luxury” products and saw any association with fisheries as a threat. The coordinator of the meeting eventually expressed the view that the conference was too premature.

Eight years on, it would seem that this new debate also failed to reach a decisive conclusion. Intrafish reported that the debate took a very positive line on the future of fish farming in Europe, but it did not seem to answer the question as to whether it is the answer to the fisheries crisis?

The problem for aquaculture producers is that if they are to become an alternative supplier to wild catch fisheries then they must produce fish in large volumes. Unfortunately, many farmers associate volume production with low prices and they would rather resist such development in favour of premium priced products. However, in common with other luxury foods, premium prices means that the products must be produced in much smaller volumes so reflecting the specialist niche markets. It would therefore appear that aquaculture is not the panacea for depleted fish stocks.

However, there is no reason why there should be such a clear-cut answer. In many ways the need to find alternative supplies to wild caught fish reflects the challenge facing aquaculture today. Should aquaculture producers concentrate on high value species with a limited market or look to satisfying mass- market demand with low cost fish. We, at Callander McDowell, do not see why aquaculture cannot satisfy both market sectors. We have argued previously for parallel or twin-stream marketing or even multi-stream marketing rather than focus on one single market sector. The challenge for the industry is to break out of the traditional vision of aquaculture and begin to exploit all sectors of the marketplace. There should then be no reason why aquaculture cannot become the dominant supplier of fish to the global market.

Euphoric!!! It is claimed that the euphoria in Norway over the termination of the EU salmon agreement may well be short lived. An unnamed source close to the SSPO told Intrafish that Norwegian salmon farmers will yet come to realise the predicament that they are in with low prices and poor liquidity. This unnamed source said that clearly something will have to be done to try to restore the industry to a healthy position, not just for EU producers but also for those in Norway. We, at Callander McDowell, would agree. However, we do not believe that any form of intervention is the answer. The EU salmon agreement failed to provide a solution, as the continuing decline in prices has demonstrated. Equally, the introduction of antidumping tariffs is not the way to bolster prices.

The market for salmon continues to evolve and simply the industry must evolve with it. Salmon farmers cannot stop the tide of change by trying to isolate themselves from market forces by cartel like agreements nor through the imposition of tariffs and punitive duties.

If salmon farmers wish to restore the industry to a healthy position, they must look towards producing the type of products that consumers now want It is not enough to produce tonnes of raw salmon flesh and expect consumers to pay out their hard earned cash for something which is not exactly what they want. Salmon farming companies need to look harder at the marketplace and respond to the changing consumer requirement.

By comparison, the unnamed SSPO source expressed agreement with Andres Grimelund of Rolf Olsen AS, who told Intrafish that the biomass must be reduced in order to push up prices to increase overall returns. Sadly, a reduction in biomass alone will not guarantee a rise in prices, as it is the flow of salmon to market, which has a greater influence on price. Equally, rising prices may inflict irrevocable damage to the market as many of the new consumers who were attracted to salmon by the low prices could well be deterred if prices begin to rise. Consumers now have a wide range of foods to choose from. They don’t have to buy salmon.

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