RETAIL CHANNELS FOR FARMED FISH IN SOUTH EUROPE José Fernández-Polanco (1), Juan A Trespalacios (2) Ignacio Rodriguez del Bosque (1) (1) University of Cantabria. Spain. (2) University of Oviedo. Spain Asian Pacific Aquaculture Cochin, India, Jan 18 Introduction: The Issue Food retail is facing a process of concentration worldwide. As a result retailers are increasing their power toward producers and consumers. Modern retail formats like supermarkets and large surfaces are increasing their presence and market share even in the most traditional communities. Large purchase volumes lead to cheaper supply prices. Promotion and merchandising, along with competitive prices lead to larger sales across consumers. Traditional stores are unlikely to successfully develop the same tools. 1
Introduction: Some Questions about Seafood Retailing Is the market leading to a singular distribution model or there is an equilibrium among the different retail formats? Are there consumer segments channels? according to the different retail How do consumers make their choices on regard seafood stores? What are their motivations? How do consumers perceive quality in the different seafood retail formats? Seafood retail formats in Southern Europe Traditional Fish Markets 2
Seafood retail formats in Southern Europe Fishmonger Seafood retail formats in Southern Europe Supermarket 3
Seafood retail formats in Southern Europe Hypermarket Retail Formats Market Share Total seafood sales in Spain (2009) Fismonger Pescadería 27,45% Hiper 14,15% Fish Market Plaza 15,95% Super 42,44% Source: Spanish Ministery of Fisheries (MARM). http://www.mapa.es/es/alimentacion/pags/consumo/bd/consulta.asp 4
Evolution of seafood sales Annual change rate 2005 2009. Quantities sold in Spain (Total seafood) 8,00% 6,00% 4,00% 2,00% 0,00% -2,00% -4,00% -6,00% -8,00% -10,00% -12,00% 2004-05 2005-06 2006-07 2007-08 2008-09 Hiper Super Plaza Pescadería Source: Spanish Ministery of Fisheries (MARM). http://www.mapa.es/es/alimentacion/pags/consumo/bd/consulta.asp Evolution of seafood sales Annual change rate 2005 2009. Average prices in Spain (Total seafood) 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% -2,0% -4,0% -6,0% 2004-05 2005-06 2006-07 2007-08 2008-09 Hiper Super Plaza Pescadería Source: Spanish Ministery of Fisheries (MARM). http://www.mapa.es/es/alimentacion/pags/consumo/bd/consulta.asp 5
Competency across retail formats The evolution of quatities sold indicates some kind of stability. Fishmongers are in a continued decline, as a result the expansion of supermarkets. Hypermarkets and traditional fish markets mantain their average market shares The common trend in the evolution of prices indicates, however, a strong competitive bahavior across the different channels. Supermarkets are price leaders, while traditional channels are associated to higher product quality, sustaining higher prices. Retail Channels & Consumers Segments Dominant profiles. Fish Market. Women, over 50 years old, householders or retired, elementary education. Incresing numbers of young urban residents. Fishmonger. Women, over 30 years old, occupied or householders, medium and elementary education. Supermarket. Both genders, ages between 18 and 50 years old, occupied or householders, medium and elementary education. Hypermarket. Both genders, ages between 30 and 65 years old, occupied, medium and superior education. Increasing numbers of elderly people from rural areas. MARM - UC (2009). Valoración de la Acuicultura en España.2003 2007. MARM. Madrid 6
Retail Channels & Consumers Segments Consumer s Awareness and Responsible Behavior. Fishmarket. Strong interest on regard information about geographic provenance and harvest methods. Preference towards wild domestic species. Fishmonger. Lower price sensitiviy, preference towards quality, country or region of origin and safety. Supermarket. Higher environmental concerns in contrast with a high price sesitivity. Hypermarket. Label oriented consumers, appreciating brands and certifications. Strong trust in food safety controls, however assurances are strongly appreciated. MARM - UC (2009). Valoración de la Acuicultura en España.2003 2007. MARM. Madrid Store Choices & Consumer s Motivations. Sample: 812 seafood purchasers (error = ±3.5; Z = 1.96; p=q=0.5) interviewed face to face following a ramdon proportional process. November 2008. Main goal: Analysis of mislabelling issues of pangasius in the Spanish market. Fernández Polanco, J., et al (2009). The Mislabeling Issue of Pangasius at Overseas Markets. Effects on Price and Perceptions of Spanish Consumers. Asian Pacific Aquaculture, Kuala Lumpur, Malaysia. Fernández Polanco, J., et al (2009). Consumer Knowledge and Behaviour in Purchasing Pangasius Catfish in Spain. Aquaculture Asia-Pacific, 5, 6, 36 37. Incudes questions regarding consumer s motivations and perceived quality. 7
Store Choices & Consumer s Motivations. Main motivations. Calidad Quality Proximidad Proximity Precio Price Empathy Trato Services Servicios Costumbre Habitude 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% Store Choices & Consumer s Motivations. Calidad Hypermarket Calidad Fish Market Proximidad Proximidad Precio Precio Trato Trato Servicios Servicios Costumbre Costumbre Calidad 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% 80,00% Supermarket 0,00% 10,00 % Calidad 20,00 30,00 40,00 50,00 60,00 70,00 80,00 90,00 100,00 % % % % % % % % % Fishmonger Proximidad Proximidad Precio Precio Trato Trato Servicios Servicios Costumbre Costumbre 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% 80,00% 90,00% 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% 80,00% 90,00% 8
Consumer s Perceived Quality Kruskal Wallis mean ranks. Results from a SEVPERF analysis. 500 450 400 350 300 250 200 150 100 50 0 Empathy Empatía Safety Seguridad Organization Organización Plaza Pescadería Supermercado Hipermercado Aquaculture an Retail Formats For Southern European consumers farmed species are considered of lower quality than wild caught species. Price becomes the main competitive advantage. Planed production of aquaculture, assures continuous supply to retailers who may wish to specialize in non-seasonal species. Lower costs of aquaculture makes it attractive for retailers focused in price leadership. The above remarks make the modern channels (super and hypermarkets) potential customers interested in relevant presence of farmed species in their supply. However, top quality producers may consider to posit their product in traditional channels that may yield to higher prices and better consumer s quality assessments. 9
Thanks for your attention Seafood store in Ancient Ostia Forum (Italy). Ca. 2000 yrs. 10