International

Markets

Bureau

MARKET ANALYSIS REPORT | JUNE 2010

Consumer Trends

Seafood in Germany

EXECUTIVE SUMMARY

INSIDE THIS ISSUE

DID YOU KNOW?

PAGE 2

Consumer Trends Seafood in Germany

Canadian exports of fish and seafood products increased by 25% from 2007 to 2008.

Sales of chilled fish and seafood products in Germany were US $366 million in 2008.

Discount stores hold 50% of the fish and seafood market.

Fish and seafood in Germany is an expanding market with a heavy reliance on foreign suppliers. In 2008, Germany imported over US $5.0 billion dollars worth of fish and seafood products. Canadian suppliers exported 25% more fish and seafood to Germany from 2007-2008. Nevertheless, they ranked only 21st

within Germany as an importer in this sector. Clearly, there is room for growth. Moreover, Canada has the advantage of being a supplier of many fish products preferred by Germans, such as herring, salmon, shrimp and lobster. Fish products have become more popular in Germany, as they are seen as healthy, low in fat, and high in omega-3 fatty acids. Due to the large German workforce, the demand for chilled convenience goods is also growing. Chilled fish and seafood sales in 2008 were US $366 million. The largest distributors in the German retail market are discount stores with 50% market share. The top three retailers, Aldi, Lidl, and Penny, have a stranglehold on the fish and seafood sector. Large retailers are attempting to target more consumers by also offering Internet purchasing. This method of generating sales has been quite effective. Snack stands and kiosks, although great in number (48,000), are experiencing reduced sales as a result of high prices and strict laws on hours of operation. Fish stocks are being depleted, resulting in a heavy dependence on aquaculture. This decreased supply has resulted in increased fish prices in Germany. Nevertheless, the demand for fish and seafood products is growing. It is important to note that foreign producers face the challenge of acquiring local marketing representation when attempting to enter the German food market.

Consumer Trends

3

Retail Trends

4

Market Size 5

Individual Sectors 6

Canadian Performance 7

Competition 7

Product Introductions 8

New Products 9

CONSUMER TRENDS

PAGE 3

The leading food and beverage market in the European Union (E.U.) is Germany, with consumer sales of approximately US $241 billion in 2008 (Euromonitor).

German fish consumption is growing as consumers increasingly demand foods that support a healthy diet and are convenient to prepare.

Domestic stock shortages have forced German fish and seafood suppliers to import larger quantities of these products which has resulted in higher unit prices.

Fish and seafood products with low fat and sugar contents, limited additives and, ideally, 100% organic ingredients, have shown recent growth.

Conveniently prepared value-added products, including fillets with toppings, mixtures of fish and vegetables, and ready-meals, are increasingly attracting the busy German workforce, who have limited cooking time. In 2005, market share of frozen fish products and canned fish preparations accounted for 32% and 30% respectively.

Fish and seafood suppliers are increasingly providing chilled, processed foods fortified with omega 3 and vitamins.

New products entering the European market in 2008 focused on having no additives and preservatives, enhancing the image of natural fish and seafood products free from monosodium glutamate (MSG) and polyphosphates, characteristics that appeal to Germans.

In Europe, the health of the planet has become more important to consumers. Packaging has begun to reflect this trend, with clear labelling and prominent display of the Marine Stewardship Council logo, which denotes sustainable and ethical products.

Top Consumed Fish Species in Germany- 2008

Alaska Pollock

24.7%

Pangasius,

4.4%

Tuna, Bonitos,

10.2%

Salmon, 11.1%

Herring, 20.8%

Source:Dr. Manfred Klinkhardt, Eurofish Magazine, 2008.

RETAIL TRENDS

Organized food retailers, such as supermarkets, hypermarkets, discount stores, and small, traditional retail stores, control a majority of food and beverage sales in Germany. Kiosks also contribute generously to retail sales, especially in the fish and seafood sector. Over the last decade, the top five retailers accounted for 63.5% of sales. Forecasts show these same retailers should control 75% of the market in 2010. In 2008, German discount stores held 50% of the retail food market, encompassing approximately 13,400 stores. Recent laws that benefit small retailers have further allowed these food and beverage providers to increase profits. The top three companies Aldi, Lidl (Schwartz Gruppe) and Penny (REWE) account for 78% of market share. Along with other stores, Aldi, Lidl, and Penny have broadened their selection of seafood products, as well as fresh meats, baked breads, and fresh fruits and vegetables. Large retailers have been experimenting with new strategies to boost sales. Some of these methods include home delivery, mail-order, and Internet shopping. Due to a large number of single-person households and the rising number of working women in Germany, interest in more convenient food and beverage purchasing methods has grown. Large retailers have been particularly successful with internet sales and German retailer Markant had a sales turnover of US $47.5 billion, making it the most active supplier. In Germany, and throughout Europe, Markant provides wholesale purchasing and marketing for its products. Despite higher prices, convenience retailers continue to maintain a large presence amongst German retailers. Snack stands and kiosks (48,000) represent half of the sales from convenience retailers. Recently imposed laws that allow all retailers to operate until 8:00 p.m. on weeknights and 6:00 p.m. on Saturdays will undoubtedly discourage spending at convenience retailers. The German retail market is highly competitive, which forces providers to capitalize on advanced marketing techniques to gain a competitive advantage. One technique distributors use is to host annual or semi-annual food shows to display their products. Marketing poses a challenge for exporting countries. They have to utilize local representation and contacts to promote and introduce products. These representatives assist in providing market and distribution information, business practices and trade laws, as well as contact information. Fishery promotions are conducted by the Fish Information Center (fischinformationszentrum) or FIZ in Hamburg. FIZ relies on public relations campaigns to establish a positive image for fish products. The main distribution channels used in Germany are refrigerated trucks, and cash and carry wholesalers with both dry and cold storage facilities.

PAGE 4

Percentage Share of Distribution Channels of Seafood Products in Germany - 2008

Type

Supermarkets/

retail chains Discounters Fishmongers Others

Fish Total 37 50 5 8

Fresh Fish 43 6 25 26

Smoked Fish 36 45 10 9

Canned Fish 35 63 0 2

Fish Marinades 38 55 3 4

Frozen Fish 35 58 0 7

Other fish 36 58 2 4

Source:Dr. Manfred Klinkhardt, Eurofish Magazine, 2008.

THE GERMAN SEAFOOD MARKET

PAGE 5

Commodity US Dollars

2006 2007 2008

Fish fillets and other fish meat - fresh, chilled, or frozen 1,535,686,996 1,703,421,685 1,848,702,460

Fish - dried, salted & smoked 337,152,692 421,127,698 485,246,151

Fresh or chilled fish - excluding fillets 452,134,817 455,790,459 409,019,085

Unspecified commodity 78,038,364 79,421,120 142,562,742

Live crustaceans 227,066,000 279,882,681 283,097,742

Frozen fish - excluding fish fillets and other fish meat 145,168,899 190,450,164 185,840,684

Other seafood 89,770,779 103,234,804 111,034,487

Live fish 68,337,951 77,598,794 74,758,550

Prepared or preserved fish 620,604,819 733,504,182 815,465,608

Prepared or preserved crustaceans & molluscs 228,568,484 292,913,176 319,425,760

Extracts of meat, fish, crustaceans, & molluscs 6,994,580 13,791,116 53,092,303

German Fish and Seafood Market Size (2003 - 2008)

340

350

360

370

380

390

Total

Volume

('000)

Tonnes

2003 2004 2005 2006 2007 2008

Year

Germany Import Statistics From World: Fish and Seafood (2006 - 2008)

Source: Euromonitor, 2009.

Source: Global Trade Atlas, 2009.

ALASKA POLLOCK

PAGE 6

Germany is the largest European importer of frozen Alaskan Pollock, with imports totalling US $545 million in 2008, over 178,000 tonnes. The main exporters to Germany include: China, the United States, and Russia.

Alaskan Pollock is the most important groundfish species in the industry as it is the largest remaining source of palatable fish in the world.

According to Globefish, the volumes of Alaskan Pollock for export will remain stable, as catches of the species decline slightly in American waters but increase in Russian territory.

German importers value sustainable sources and stable supply.

Salmon is the third most popular fish in Germany, with a 11.1% market share.

Although German imports of salmon in other categories have decreased slightly, smoked salmon imports are increasing, due to Poland taking over the German smoking industry.

After being caught abroad, lobsters are put in controlled aquariums to be exported live to foreign markets, like Germany.

In Germany, live lobsters are sold through wholesale markets and fish specialty shops to restaurants and consumers.

SALMON

LOBSTER

HERRING

Herring is the second most popular fish in Germany, with a 20.8% market share.

Canada exported a total of $5.3 million of frozen herring fillets to Germany, in 2009. The number of herring fillets exported to Germany dropped by half from 2008 levels.

Canadian exports of whole frozen herrings have increased to $1.1 million in 2009.

Much of the herring that Germany imports comes from Northern E.U. countries such as Norway, the Netherlands and Denmark.

PAGE 7

CANADIAN PERFORMANCE

COMPETITION

In 2008, Canada exported CDN $48 million in fish and seafood products to Germany.

Canada’s top export products are: prepared shrimp and prawns (CDN $12.2 million), frozen herring meat (CDN $9.5 million), fresh lobster (CDN $9.1 million), frozen lobster (CDN $5.0 million), and caviar substitutes (CDN $3.3 million).

Although dwarfed by its competitors in Germany and making up less than 1% of the German market share, Canada still manages to hold its position as one of the top 25 suppliers of fish and seafood.

There has been a 25.5% increase in imports of

Canadian fish and seafood between 2007 and 2008.

Canadian Fish and Seafood

Exports to Germany

0

10

20

30

40

50

60

2006 2007 2008

Exp

ort

s i

n M

illi

on

s o

f

CD

N D

oll

ars

Source: Global Trade Atlas

Main Seafood Suppliers of the German Market (by Import Value) - 2008

Country % of Imports (Value) Poland 12.2 Denmark 10.5 The Netherlands 8.5 France 2.0 Spain 1.5 UK 1.3 Italy 1.3 Belgium 1.1 Lithuania 0.5 Other EU-countries 2.1

EU (27) total 41.0

Country % of Imports China 11.0 Norway 7.3 USA 6.5 Viet Nam 3.9 Ecuador 3.4 Chile 3.2 Thailand 3.2 Russia 3.2 Iceland 1.9 Philippines 1.6 Canada 1.2 India 1.0 Indonesia 1.0 Morocco 1.0 Tansania 0.9 Sri Lanka 0.9 Greenland 0.7

Papua-New Guinea 0.7 other Non-EU 6.4

Non-EU total 59.0

Source:Dr. Manfred Klinkhardt, Eurofish Magazine, 2008.

PAGE 8

PRODUCT INTRODUCTIONS

New Seafood Product Introductions in Germany: November 2007 - 2009

Company Number of New

Products

Larsen Danish Seafood 17

SimexInter 10

Iceland Seafood 6

Homann Feinkost 4

Bluver 3

Clama 3

Pickenpack Tiefkühlgesellschaft 2

Copack Tiefkühlkost 2

Crustimex Seafood 2

Royal Greenland 2

Other 4

Total 55

Brand Number of New

Products

Larsen 10

Gizzia 10

Iceland Seafood 6

Golden Seafood 6

Homann Feine Küche 4

Trawlic 4

Larsen Scombrilla 3

Almare Seafood 3

Bluver 3

Larsen Nice and Easy 2

Other 4

Total 55

New Product Introductions in Germany by

Category: 2007- 2009

41%

10%

4%

1. Processed Fish, Meat & Egg Products

2. Sauces & Seasonings

3. Meals & Meal Centres

Source: Mintel, 2009.

NEW PRODUCTS

Salmon Fillet in Lobster Sauce Larsen "Express" is a new range of convenient fish delicacies. Salmon Fillets in Lobster Sauce is refined with brandy and ready-to-eat after two minutes in the microwave. Company: Larsen Danish Seafood.

The following is a small sample of new products introduced in the German marketplace.

Seafood Salad Bluver has introduced this Italian specialty Seafood Salad. It is also available in the following varieties: Seafood Salad with Vegetables and Octopus salad. Company: Bluver.

Seafood Barbecue Specialty Trawlic has launched a summer Seafood Barbecue Specialty (Grillpfanne). The product includes a salmon trout steak; a salmon trout fillet; two prawn skewers; two prawn and fish skewers; a blood snapper fillet; and six easy-peel prawns. The packaging bears the Marine Stewardship Council (MSC) logo. Company: Royal Greenland.

Golden Seafood Lachs-Filets These marinated salmon fillets are boneless and have a tomato-herb flavour. There are two fillets in a 250g package, which can be grilled, or prepared in the oven or pan. Company: Clama.

PAGE 9

Shark Catfish Fillets This Almare Seafood product is deep frozen, glazed, skinless, and boneless shark catfish fillets. The 500g package contains three to five fillets. Company: HMF Food Production.

Consumer Trends: Seafood in Germany © Her Majesty the Queen in Right of Canada, 2010 ISSN 1920-6593 Market Analysis Report AAFC No. 10538E Photo Credits All Photographs reproduced in this publication are used by permission of the rights holders. All images, unless otherwise noted, are copyright Her Majesty the Queen in Right of Canada.

For additional copies of this publication or to request an alternate format, please contact: Agriculture and Agri-Food Canada 1341 Baseline Road, Tower 5, 4th floor Ottawa, ON Canada K1A 0C5 E-mail: infoservice@agr.gc.ca

Aussi disponible en français sous le titre : Tendances de la consummation : Les poissons et fruits de mer en . Allemagne.

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada assumes no liability for any actions taken based on the information contained herein.