Market Demand for Live and Processed Lobster in the EU: An Overview. Richard Stead Counsellor, Seafood Europe Canadian Embassy in Brussels

Transcription

1 Market Demand for Live and Processed Lobster in the EU: An Overview Richard Stead Counsellor, Seafood Europe Canadian Embassy in Brussels

2 Topics for Discussion Trade performance Market profile Live lobster Processed lobster What can Canada do

3 Currency Patterns JANUARY 2002 AUGUST 2007 In Canadian dollars 1.8 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$ 1

4 EU Tariffs on Lobster 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%)

5 EU Lobster Imports (MT) US Canada Cuba Bahamas South Africa Australia Morocco Others

6 Canadian exports of live lobster to the EU Value $000 Volume mt

7 Canadian exports of live lobster VALUE $000 Belgium Denmark France Germany Greece Italy Netherlands Spain Sweden UK

8 US exports of live lobster VALUE US $000 Belgium Denmark France Germany Italy Netherlands Spain Sweden UK

9 Live Lobster

10 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

11 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

12 Price High prices but consumers willing to pay to a point as it is not an 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 ( grams) Price is always an issue for volume buyers Narrow margins in supply chain despite high prices due to freight, storage and taxes

13 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

14 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

15 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

16 Impact of Large Retailers Large retailers ordering great volumes feature lobster as a loss leader to generate store traffic, but depress markets for specialty seafood importers 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

17 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

18 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)

19 Homard Nouveau Promotion

20 Large Lobsters Premium market exists for large lobsters during holiday season it is small but increasing, especially with Asian customers

21 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

22 Processed Lobster

23 Canadian exports of lobster in brine to the EU Value $000 Volume mt

24 Canadian exports of lobster in brine VALUE $000 Belgium Denmark France Germany Italy Netherlands Spain Sweden UK

25 Canadian exports of lobster, frozen, in shell, nes to the EU Value $000 Volume mt

26 Canadian exports of frozen lobster in shell, nes VALUE $000 Belgium Denmark France Germany Italy Netherlands Spain Sweden UK

27 Canadian exports of frozen lobster meat, boiled to the EU Value $000 Volume mt

28 Canadian exports of frozen lobster meat, boiled RECENT TRADE PATTERNS - VALUE $000 Belgium Denmark France Germany Italy Netherlands Spain Sweden UK

29 US exports of processed lobster VALUE US $000 Belgium Denmark France Germany Italy Netherlands Spain Sweden UK

30 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

31 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?

32 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?

33 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

34 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

35 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

36 Thank you