THE FUTURE of the FRESH FISH Market
personnel viewsto
stimulate discussion&
possible actions
the Fresh Fish Market
• Yesterday» When everything was better
• Today» Problems, always problems
• Tomorrow» Surely it cannot get worse !
Yesterdays Fish Market
• Predominantly FRESH
• Local or Regional– shout auction– payment guarantee
• MANY retail outlets
• Exports
PROCESSED– dried– salted– smoked– frozen
Fresh Fish market TODAY
• Globalised• EU imports more
than it catches
• Retail dominated by Supermarket chains
• 75% in Europe
• Auctions– professional– automated– In competition
• Direct Sale• Other auctions• Farmed fish• Imports
• Falling volumes– Fewer fishing boats– Less fish landed– Reduction in buyers
• Prices static – Real value reduced – € = cheap imports
• Exports include fresh– Airfreight– Chill container
• Costs Rise whilst
Income Falls
Demersal Fish Prices
1980
1985
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
firs
t sa
le v
alu
e
Cod
Haddock
Plaice
DEMERSAL
Fish Catch Index - Tonnes
• 1960 111• 1970 147• 1980 100• 1990 72• 2000 66• 2005 55
source FAO statistics
Fish Prices Index - real terms
• 1980 100• 1985 92• 1990 105• 1995 84• 2000 88• 2003 88• 2005 ? ? ?
Based on UK DEFRA statistics
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000
Demersal Catch: North Atlantic
Portugal Spain Ireland United Kingdom France
Belgium Netherlands Germany Denmark
Looking back over 25 years +
EFAD project identified EFAD project identified long term fall in first point long term fall in first point of sale fish prices of sale fish prices in real in real termsterms
European Fish Auction Datanet
Update study by EAFPA Update study by EAFPA (2003-2005) confirmed (2003-2005) confirmed that this problem that this problem continuescontinues
TOMORROW ?
THREATS?• Reduced catch levels• Failure to Rationalise
– Too many independent auctions
• Lack of Identity– no recognised brand for
fresh captured fish
• Low Cost Imports– Farmed product
• Illegal Fishing• Direct Purchase
– By supermarkets
• Chickenisation– Fish as a commodity
fewer fishermen
smaller landings
reduced buyer competition
increased unit costs
Socio-economic FAILURE
OR THE NEXT DECADE
FUTURE of the FRESH FISH Market
IS THERE ONE?
I THINK THERE IS
Provided
WE ACT NOW
To prepare for tomorrow…
Objective: for the fish sales organisation
• Maximise unit values – fish prices per kilogramme
• Minimise unit marketing cost– defray fixed expenditure
• Offset central purchase control– Avoid there being a dominant buyer
• Establish long term markets– To complement long term investment
HOW?
• Replace Volume– With Value
• New business– services– products
• utilising assets
• Embrace Quality– BRAND it
• SELL it– DELIVER IT
• Change price dynamics– repackaging– distribution– vertical selling
own account
partnering others
• Sales platform for – Farmed fish– Imported fish
• Promote WILD fish– as the new organic
Scale EconomiesSupply Volume Leverage
FarmedFish
Imported Fish
CapturedFish
AUCTIONserv
ices
logistics
serv
ices
sales
Marketdevelopment
consumerdirect
auction wholesale
supermarketcontract
BUYERS LIKE VOLUME and CHOICE
EXPERIENCE HAS SHOWN THAT THEY DESERT FAILING AUCTIONS
Auctions (and the ports they operate) have a proven track record in
innovation
• EU regulations• Vessel Design• Premises• Grading• Packaging• Cool Chain • E-commerce
• Money Transfer
SALES are the KEY
Quality can not be compromised
TAC’s are unlikely to increase
Costs continue to rise in real terms
Continuous development and investment needed
Maintaining a viable sector?
Fish Prices at first sale
• Lack elasticity
due to alternative
» species
» sources of supply
» food products
• Do not reflect production cost
• Are subject to globalisation
– and the buying power of the €uro
• Fish is in danger of moving to a commodity basis
– through centralised buying policies
– Homogenisation of products
• “CHICKENISATION”
Can we build on e-commerce
Exploiting existing buyer contact While developing new
Or is it an opportunity missed?
• first ‘auction clock’ was made in Utrecht 1902 (electro-mechanical)
• Dutch Auction (falling price)
• Effective for fresh products– Flowers– Vegetables– Fish…
• Physical presence required
Computers arrive
• first for administration
– Records
– Accounts
• then as the auction ‘engine’
• linking sales . to billing
Today there are many Fish e-auctions
• Fair• Transparent• Efficient• Effectiveaiding
• Traceability• Business
Some Fish e-auctions
e-auctions
• Technology has changed what we do • and how we do it
• Electronic Retail is now ‘normal’• ebay has brought internet auctions into the
home
• Flights and Travel are booked online
• In UK Tesco, supermarket chain, has 5 million internet customers
– Shop Online – Store delivers
• e-commerce now valued at €7 trillion pa (Forrester Research Inc.)
• Fish Auctions have used Electronic Auction for decades
– Present systems well established
– Potential still to be realised…
ee-commerce upward trend continues
• UK online purchases in 2003
– B2C €170 per capita– fish is bought online
• by Trade B2B• by CONSUMER B2C
• 300% growth in B2C by 2008 (Forrester Research)
• EU B2B e-commerce
in 2004 €250.000.000.000– Fish Auctions are B2B
• What is growth path?
– NEW product– B2C ?
Can fresh fish Auctions and their suppliers, fishermen and fish farmers, benefit from the growth of direct consumer buying over the internet
• Consumers will not pay more – Introducing efficiencies through direct supply
should increase producer income • Auctions provide a secondary sale outlet
– Adopting volume internet trade terms• Investing in systems, staff and service
• On the back of this– Quality products could be delivered
• To the ‘upper quartile’ of consumers that will pay a premium for “the best”
• From a mobile phone tomorrow’s fresh fish could be ordered today– Cheap, simple to use, tomorrow is here today!
Buying Unseen
• Consumers will buy based on description – Where this is backed by a ‘standard’
• Witness ebay sales
• EAFPA has considered developing an EAN code based on product not processor
– This could form a common ‘standard’– Providing:
• Information on what it is and where it came from– Not a subjective ‘quality’ but just data facts
• As ever funding is the prime issue– But can we wait, doing nothing
• Or make a start as part of a certification scheme– Ecolabel – Traceability – Service Quality
Future e-commerce ???
• Direct Sale – to end customer
• Seamless Buying– Buy many places– Delivery inclusive
• Track & Trace– RFid
• SMS (mobile phone)• 3G web systems• ebXML (OASIS)
Smart Sales systems help but they are no substitute for
understanding, and meeting Product DemandProduct Demand
• Auctions may only receive information on consumer trends ‘second hand’
• Large supermarket chains are taking an ever growing share of fish retail supply
• Perceived ‘wisdom’ may be false– e.g. fish is ‘price capped’ by the consumer
• Unfulfilled demand may exist• The customer (consumer)
» is King (and Queen)» Do they know what could be available…
Retail Trends – Consumer Choice
Supermarket chains70% of chilled fresh90% of frozen fish90% of pre-prepared
Consumers Price driven purchasesOrganic Healthy Food
Quality & Eco Labels Fresh and Traceable
0
10
20
30
40
50
60
70
80
1999 2000 2001 2002 2003 2004
Chains Public Markets Fishmongers
%
Supermarkets can control Local pricesSupermarkets can control Local prices
Consumers look for Quality labelsConsumers look for Quality labels
Supermarkets promote THEIR OWN Supermarkets promote THEIR OWN brandsbrands
Fish bought (imported) at lowest cost Fish bought (imported) at lowest cost
Organic produce has captured a small, but significant, share of the fresh food market: those willing to pay a premium for quality food from an environmentally acceptable source.
• An EU directive has decreed that nothing captured or harvested from the wild can be labeled as 'organic'.
• Currently only farmed fish can be given the organic label
– Natural feeding being uncontrolled and unsupervised
• Certification bodies contend with:
– pollution levels in the sea– over-fishing and depleted fish
stocks– environmentally aware fishing
techniques– pesticides treatments in
conventional fish farms
• Wild, captured fish, if they can not be organic (!?!) can be
– Environmentally acceptable– Ecologically sound– Traceable– Certified as ‘free range’
• Ecolabeling must not become the province of the retailer
– They promote Own Brands• Not source products
• Traceability can be used as a tool to promote wild fish
In combination an 'eco-friendly' labelling system that give guidance for the concerned consumer could be the NEW ORGANIC
In an increasingly Globalised marketplace
Auctions must be proactive delivering what the buyer wants
Even if they do not know what this is until it is supplied
Working with fishermen to maximise QualityProviding the essential link for Traceabilitypromotingend consumer confidence
ensuring that Fishermen make a reasonable Return(on their catch)and
Buyers also Return