Marketing and Planning – Future Prospects

Phil ThomasChairman, SSPO

Food Markets and Food Marketing

• Taking account of short, medium and long-term effects global food markets are shaped by four main factors:

– Food production resources;

– Present and near-future levels of food production;

– Food demand and food culture in the population;

– Prevailing economic circumstances.

• However, the way these factors interact varies widely from location to location and from one food to another.

• Marketing generally relates to the competitive offering for sale of a food compared with another source of supply of the same food, or an alternative food.

Marketing

• Marketing is about modifying the behaviour of the market; it is sometimes described as:

– The process supporting the sale of the available product at the best price that can be obtained in the market.

• However, even in a free-market, this objective is almost always influenced by economic, social, political, moral, personal, strategic and tactical considerations.

• Therefore, marketing almost always has an overlay of

objectives that are not simply about making profit.

Global Population and Food Supply

Developed Countries

Developing CountriesGlobal Total

World Mean 1997-99 (Actual)

2030 (FAO Est.)

Energy (kcal/day) 2803 3050

Meat (g/day) 100 124

Dairy (g/day) 214 245

- Global population will rise from 6.9 billion to 9.1 billion by 2050.

- Depending on assumptions, food production must increase by 50-70%.

- As affluence increases consumers eat more calories and proportionately more protein.

- Consumption of meat, eggs, dairy products, fish and seafood will allIncrease over time.

Fish and Seafood

• Total fish and seafood production and consumption will increase. Both as a result of population increase and increase in consumption per head.

• Regional patterns in fish consumption will modify as a result of affluence and wider consumer choice.

• Catch fisheries will be sustainably managed to seek to maintain production; some development of markets for ‘unexploited species’.

• Globally, aquaculture production will provide a larger and larger proportion of human total fish consumption.

Fish Consumption (kg/h/y) by Regions

Area(Data 1996-98)

Low Value

Highvalue

Shellfish Total

World 7.5 4.4 3.8 15.7

Japan 8.3 33.1 21.2 62.6

China 15.8 1.5 9.2 26.5

EU(15) 1.9 15.4 6.3 23.6

USA 0.1 13.3 6.3 19.7

Eastern Europe 0.4 9.9 0.3 10.6

Latin America 5.3 1.7 0.9 7.8

Sub-Saharan Africa 5.9 0.6 0.1 6.7

India 3.6 0.9 0.2 4.7

FAO 2020 Projection Study (2002)

Norway (2008): consumption 46.6 kg/y. Globally FAO 2020-projection of 17.1 kg/h/d probably already achieved.

Global Status of Fish Stocks

• 15% of stocks underexploited or moderately exploited.

• 53% of stocks fully exploited.

• 32% of stocks overexploited, depleted or recovering.

Fishermans perspective: 68% stocks managed sustainably.

NGOs perspective: 85% stocks in crisis or unsustainable.

After Tore Nepstad, Director IMR, 2011

Year

MT

onne

sFisheries and Aquaculture Production 1951-2006(After Ababouch, 2008)

Norway, UK and Scotland

Norway UK Scotland

Population (Million) 4.83 61.84 5.19

Salmon production (kt/yr)

885 145 (145)

Home market (%) 4.5 48 (8)

Export market (%) 95.5 52 (92)

Salmon Aquaculture Considerations in Norway and

Scotland Consideration Norway Scotland

Product Marketing Current Strategy Current Strategy

Aquaculture Image Some Issues Some Issues

Statutory Regulation Burdensome Burdensome

Site Planning & Development

Slow Very problematic

Fish husbandry Specific issues Specific issues

Public concern about seals Little Ongoing

Marine NGOs/ Wild fish Lobbyists

National & International

National &International

11

ResearchBackground and objectives

Qualitative Research was commissioned to:

gauge attitudes to aquaculture among the public, retailers and NGOs;

develop educational/marketing approaches for promotion of aquaculture;

inform policy development.

Survey Focus Groups

8 focus groups with members of the public;

12 retailers;

8 NGOs.

12

Consumers: Fish consumption

Focus on benefits to self.Main factors in choice: species, freshness (quality), price

Source/origin significant for some:

local = fresh, not frozen; good for UK economy;

most aware of environmental and sustainability issues; especially relative to cod, tuna;

some knowledge of discarding issue;

…but did not seek out information;

some knowledge of labelling – line caught, dolphin-friendly;

Little understanding of organic in fish context.

Consumers: Aquaculture

Low profile: majority largely ignorant; a few better informed.

General perceptions favourable:

wild fish expensive, scarce > farmed fish pragmatic option;

all the benefits of fish (especially health) but affordable;

takes pressure off wild fish stocks.

Scottish farmed salmon well regarded:

Scotland traditionally a fish source;

from UK: fresh; supports UK/Scottish economy;

farming methods/standards probably good;

positive associations – fresh waters, natural.

Little knowledge, generally accepted.

Consumers: Aquaculture Little knowledge of specifics

Fish expected to be looked after; but suggestions of scientific approach off-putting (white coats).

Fish farms often assumed to mean tanks on land; unappealing.

When informed, consumers have mixed feelings about habitat:

pens in water = almost the natural habitat; fish naturally shoal;

but pens must be overcrowded > fish confined; disease.

Some concern about feed but not until raised.

Minority believe stories about antibiotics, hormones, dye.

Life cycle: how do fish breed and how are they killed?

Few refs to lice, escapes, predators, seabed contamination.

15

Retailers

Most multiples, 3 independents:

•policies on sustainability, environmental issues;

•highly selective in sourcing;

•(try to) stick to same suppliers;

•advise suppliers on standards;

•work to Freedom Food standards.

Small independents, minority of multiples:

•no policy on sustainability;

•or leave it to supplier or wholesaler;

•more focused on availability, quality, price;

•regard country of origin as useful indicator.

Significant differences between retailers

For salmon, unanimous belief that Scottish signals quality

Retailers

• Most feel aquaculture industry is not good at communicating.

• Few consumers well informed, benefits not fully understood and are taken for granted.

• Scottish provides reassurances, quality cues, but:

– a feeling of opportunities missed;

– and vulnerability to attack from the media, NGOs.

NGOs: Aquaculture

General feeling, fish farming is here to stay: demand justifies it; corporate producers impossible to resist; value to economy too great to ignore

Positives: helps meet demand for fish; importance to local communities; contribution to economy – locally, Scottish, UK

Concerns: variability of standards; siting; multinational /foreign ownership: no local interest; small farms cut corners; too reliant on salmon

All believe standards improved greatly in last 20 years and that (media) perceptions lag behind reality

18

NGOs: More Specific Concerns

Environmental impact:

•sea bed and marine ecosystem – feed, disease treatments;

•seals – killed as predators;

•bird life – poisoned, snagged in nets.

Sustainability of feed:

•finite amount of fish oil to make feed;

•demands imposed by production standards;

•some disagreement:

- wild fish sustainable;

- conversion rate good.

Effect on wild fish:

•sea lice;

•escapes;

• inter-breeding; interference with DNA.

Conclusions: Consumers View

Consumer confidence in Scottish aquaculture solid.

Experience is largely in favour of farmed fish: good quality, fresh, safe, available and affordable.

Fact fish is farmed is not an obstacle to buying:

many consumers buy farmed fish unknowingly and like it;

those who know it is farmed have few concerns.

Consumers accept modern farming methods, provided food quality and safety is unaffected.

In any case, few consider such matters at point of sale.

Consumers welcome transparency about food sources, but can be put off by reality.

Conclusions: Retailers and NGOsRetailers’ interests and concerns in relation to aquaculture are: supply and price; quality.

Some premium retailers fear that negative media stories could affect sales; and feel the need to be prepared to rebut them.

NGOs are concerned about: sustainability of feed; fish welfare; local and global environmental impact; consistency across fish farms.

NGOs believe the issues themselves are not being addressed properly, especially variable standards, and impacts – but recognise there are positive messages to communicate also.

The End