Market Demand for Live and Processed Lobster in the EU Market.pdf · Market Demand for Live and...
Transcript of Market Demand for Live and Processed Lobster in the EU Market.pdf · Market Demand for Live and...
Market Demand for Live and Processed Lobster in the EU:
An Overview
Richard SteadCounsellor, Seafood – Europe
Canadian Embassy in Brussels
• Trade performance
• Market profile
– Live lobster
– Processed lobster
• What can Canada do
Topics for Discussion
Currency Patterns
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J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J
EURO US$
JANUARY 2002 – AUGUST 2007In Canadian dollars
Lobster• Frozen in shell whole 6%• Frozen in shell excluding whole 16%• Live 8%• Meat cooked for further processing 0%• Meat cooked other 20%
Rock Lobster from Cuba – zero tariff
Value-added Tax
Other charges– import levy to support local fish market (Greece 2.3%)
EU Tariffs on Lobster
7518
765382
51
7942
2658
2312
0100020003000400050006000700080009000
2004 2005
USCanadaCubaBahamasSouth AfricaAustraliaMoroccoOthers
EU Lobster Imports (MT)
6101
2
5829
6
6032
6
6891
536
94
3265
3096
3274
01000020000300004000050000600007000080000
2003 2004 2005 2006
Value $000Volume mt
Canadian exports of live lobster to the EU
VALUE $000
2003 2004 2005 20060
5000
10000
15000
20000
25000
Belgium Denmark France Germany GreeceItaly Netherlands Spain Sweden UK
Canadian exports of live lobster
VALUE US $000
2003 2004 2005 20060
10000
20000
30000
40000
50000
60000
Belgium Denmark France Germany ItalyNetherlands Spain Sweden UK
US exports of live lobster
Live Lobster
Canadian image
• Canadian lobster known for high quality:– Low perishability– Good meat fill– Hard shell – Abundant resource– Safe and secure supply chain– Reliable suppliers able to deliver consistently
Competition
• Competitive products– European lobster from France and Scotland during the summer– Smoked salmon– Crab including King crab– French oysters– European turbot– Fresh scallops (especially at retail)– Warmwater shrimp– Rock lobster– Tuna– Sea bass– Halibut
Price
• High prices but consumers willing to pay to a point as it is notan impulse purchase– Intent is to buy a lobster supper
– BUT high prices in January 2007 caused consumers to shift to other products
• Retail customers calculate the price per portion (400-600 grams)
• Price is always an issue for volume buyers
• Narrow margins in supply chain despite high prices due to freight, storage and taxes
Transport Issues
• Lost original documents during shipments or improper documents
• Limited air capacity and high cost• Lack of direct scheduled air routes into
markets such as Belgium• Maintain low mortality during shipments• AquaLife ocean container transport by
Maersk
Differentiation from Maine Lobster
• Maine lobster known for poor meat fill but is cheaper, depressing markets
• Maine and Canadian product blended in shipments to reduce average price and produce acceptable overall quality
• Maine shell colour noted as too black, rusty colour is better• Need to differentiate from Maine lobster (label cartons as
“Real Canadian lobster”, “A1 Quality – 100% Canadian”• Need to build on Canada’s positive reputation at point-of-sale• Canada considered better than Maine on value, continuity of
supply, resource management, meeting specifications
Opening New Markets
• Dependence on a few small importers to develop new markets– They have to finance sales by offering credit terms– If the importer experiences business problems, it can affect the
entire supply in the market– Costly for importers to set up tank storage systems
• Are standard tanks available inexpensively from Canada?
• Market segmentation– Addition of uncooked meat
Impact of Large Retailers
• Large retailer viewpoint– Country-of-origin is not important as they buy
using specifications– Recognize quality depends on fishing season and
place of origin– Hardshell essential but they have two qualities
(hard and medium) with different sale prices– Retailer concerns– Metro retail sale price is euro 9.99/kg– Retail consumer price barrier is euro 20/kg
• Large retailers ordering great volumes feature lobster as a loss leader to generate store traffic, but depress markets for specialty seafood importers
Promotion
• Need to create a quality image to extract a premium from the market
• Lack of local promotional support by Canadian exporters– Promotional materials– Chef demos
• Origin or trade mark would be useful to add value if it comes with a real communications plan
• Provenance – tell the story of lobster and its origin
• Problem identifying product at consumption once claw elastic bands are removed– Consumer does not know where product is
from at present
Market Peaks
• Diversify selling periods from current peaks– Christmas– New Year’s– Valentine’s week– Easter– Mother’s Day– early May-June (new lobster – homard nouveau
- season in May-June)
Homard Nouveau Promotion
Large Lobsters
• Premium market exists for large lobsters– during holiday season– it is small but increasing, especially with Asian
customers
System Issues in Europe
• Fishery management practices of supplying country
• Eco-labelling
• Traceability
• Carbon footprint
• Food miles (distance a product travels to market)
• Humane shipping, holding and killing of lobsters is a looming issue for Greenpeace
• Plant standards for high risk products
Processed Lobster
3667
7
2801
2
2480
1
2627
7
1989
1757
1641
1967
05000
10000150002000025000300003500040000
2003 2004 2005 2006
Value $000Volume mt
Canadian exports of lobster in brine to the EU
VALUE $000
2003 2004 2005 20060
2000
4000
6000
8000
10000
12000
Belgium Denmark France Germany ItalyNetherlands Spain Sweden UK
Canadian exports of lobster in brine
2160
5
1227
2
1750
6
3269
720
23
895
903
2249
05000
100001500020000250003000035000
2003 2004 2005 2006
Value $000Volume mt
Canadian exports of lobster, frozen, in shell, nes to the EU
VALUE $000
2003 2004 2005 20060
2000
4000
6000
8000
10000
Belgium Denmark France Germany ItalyNetherlands Spain Sweden UK
Canadian exports of frozen lobster in shell, nes
1553
6148
4136
1187
98429709
173
0
1000
2000
3000
4000
5000
6000
7000
2003 2004 2005 2006
Value $000Volume mt
Canadian exports of frozen lobster meat, boiled to the EU
RECENT TRADE PATTERNS - VALUE $000
2003 2004 2005 20060
500
1000
1500
2000
2500
Belgium Denmark France Germany ItalyNetherlands Spain Sweden UK
Canadian exports of frozen lobster meat, boiled
VALUE US $000
2003 2004 2005 20060
5001000150020002500300035004000
Belgium Denmark France Germany ItalyNetherlands Spain Sweden UK
US exports of processed lobster
Popsicle pack
• Remain popular with consumers due to price point
• For importers, price is key as popsicle pack lobsters are very similar between processors
• Retail market can be sold out after Christmas/New Year’s, the peak season
• Importers play a key role in supplying the market after New Year’s
Market Channels
• Importers perceive a lack of respect for different trade channels• Importer must buy in May-June for the next 12 months and take the price
risk as well as financing costs for processed products which can’t be bought later
• Retailers also see product delivered too early and don’t like to pay storage costs (would prefer that exporters hold the product in Europe)
• Volume handled by importers declining as more retailers buy direct• Importer margins come from post-New Year’s sales where prices typically
rise as retail stocks are depleted• Current system discourages importers from taking any risk to grow the
market• Why do Canadians compete amongst themselves to produce the lowest
possible price for a product that the retailers need at Christmas and is only produced in one region of the world?
Market Position/Image
• Lobster is positioned as a high end luxury product in Europe
• European consumers don’t know how to eat/prepare lobster– Seen as only for white table cloth restaurants– A more mainstream approach would build volume but would it
build value?
New Product Development
• Shift away from canned lobster has helped improve the image
• Some see a need for a better presentation than popsicle pack
• Hypobaric lobster meat
• East Coast Seafood’s Paturel Brand Triple Scored Lobster Claws & Arms
Challenges
• Cadmium in lobster (limit is 0.5 mg per kg)– Violations result in an EU-wide rapid alert
• Competition from langoustes and rock lobster tails
• Greenpeace have raised concern in Austria/Germany over method of producing raw lobster tails – Greenpeace may take the issue to retailers
What can Canada do?
• Explain hard shell quality• Differentiate, for example taking advantage of the
abundant resource, provenance• Communicate about the product to consumers
– Some think lobsters are farmed• Take advantage of the sustainability of the fishery
– Maine is pursuing MSC certification which may add value if the MSC can be marketed to customers
• Work to understand the buyers’ point of view• Become better organized to address supply issues
– Set a minimum size for exports from Canada– Address storage cost concerns of buyers for processed
product– Introduce new products (e.g. tails)– Frozen raw products are viewed as higher quality– French buyers would prefer to have French-speaking
sellers
Thank you