Local versus Global Markets for Scottish Food Producers & Local versus Global Markets for Scottish Food Producers & ConsumersConsumers

Overview of fish through the supply Overview of fish through the supply chainchain

James A Young (Jimmy)James A Young (Jimmy)

Professor of Applied MarketingProfessor of Applied Marketing

Department of MarketingDepartment of Marketing

University of Stirling, ScotlandUniversity of Stirling, Scotlandj.a.young@stir.ac.uk

+44 1786 467383+44 1786 467383

Challenges of the global Challenges of the global market market – production drivers– production drivers

•Change in composition of global Change in composition of global fish suppliesfish supplies

•Static / decline in wild capture Static / decline in wild capture fisheries fisheries

•Aquaculture - emergent global Aquaculture - emergent global food industryfood industry

0

20

40

60

80

100

120

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160

1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007

AquacultureCatch

Millions of tonnes

FISHSTAT 2007

World Fish Production

catch

aquaculture

Global Aquaculture Production

Rest of World

Asia

0

10

20

30

40

50

60

70

1950 1960 1970 1980 1990 2000

Year

Pro

duct

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quan

tity

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10

6 )

China vs Rest of Asia

Rest of Asia

China

0

20

40

60

1950 1970 1990Year

Pro

duct

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quan

tity

(ton

ne x

10

6)

Asia incl. China

FAO, 2008

FAO, 2008

Future fish supplies growth Future fish supplies growth from aquaculturefrom aquaculture

• fastest growingfastest growing food producing sector in the food producing sector in the worldworld

• accounts for almost accounts for almost 50%50% of global food fish of global food fish• 53 Mt of farmed fish produced:53 Mt of farmed fish produced: US$ 75 bn US$ 75 bn

(2007)(2007)

• Given projected population growth: Given projected population growth: NeedNeed

additionaladditional 40 Mt 40 Mt of aquatic food of aquatic food by 2030 by 2030 to to maintain current per caput consumptionmaintain current per caput consumption

• Supply challengesSupply challenges

Supply Chain & The Fish Marketing Environment

A schematic Supply Chain in fish

UK supplyUK supplychain ’06 £GBPchain ’06 £GBP~ in / out ~ in / out of homeof homeconsumptionconsumption

EU profile?EU profile?

Chain dynamicsChain dynamics

UK fish stats: 2006 UK fish stats: 2006 (Seafish ‘08)(Seafish ‘08)

Future fish supplies from Future fish supplies from ScotlandScotland

• Capture fisheries Capture fisheries

~ EU CFP compliance~ EU CFP compliance

~ TACs, Quotas & other management measures ~ TACs, Quotas & other management measures

• AquacultureAquaculture

~ Existing site constraints via ECC ~ Existing site constraints via ECC

~ New species – cod et al~ New species – cod et al

~ Offshore & Land-based cost constraints ~ Offshore & Land-based cost constraints

• Post-harvest & Value added processing / Post-harvest & Value added processing / technical gainstechnical gains

Key challenges of fish supply Key challenges of fish supply chainschains

• Disparate locations of fish resources and marketsDisparate locations of fish resources and markets• Complex global trading links patterns of exchangeComplex global trading links patterns of exchange• Heterogeneous raw materials require Heterogeneous raw materials require

transformation & allocation to specialised value transformation & allocation to specialised value chains satisfying varied market needschains satisfying varied market needs

• Chains & activities are interdependent & Chains & activities are interdependent & influentialinfluential~ delivered quality levels depend upon earlier ~ delivered quality levels depend upon earlier chain chain activitiesactivities~ value adding options depend upon earlier chain ~ value adding options depend upon earlier chain

activitiesactivities• Vertical communications network & chain Vertical communications network & chain

managementmanagement• Consumers are the ultimate determinant of valuesConsumers are the ultimate determinant of values

How do consumers assess How do consumers assess value ?value ?

• Consumers commonly consider ‘value’ Consumers commonly consider ‘value’ – but often purchase quickly, routinely – but often purchase quickly, routinely & sub-consciously& sub-consciously

• Different attributes appeal to different Different attributes appeal to different consumersconsumers

• Consumers act differently Consumers act differently at different timesat different times

• Involvement in fish?Involvement in fish?

Possible determinants of fish Possible determinants of fish ‘quality’ value..‘quality’ value..~ ~ product form: fresh, chilled, frozen, product form: fresh, chilled, frozen,

canned, smoked, dried + variantscanned, smoked, dried + variants~ texture, freshness, colour, smell~ texture, freshness, colour, smell~ brands, grades, certification ~ brands, grades, certification ~ packaging types, information, pack sizes, ~ packaging types, information, pack sizes,

ease of preparation, storageease of preparation, storage~ meal occasion, co-diners, mood, weather~ meal occasion, co-diners, mood, weather~ promotion support: adverts +/-, publicity, ~ promotion support: adverts +/-, publicity,

sales promotions, media activity etc…sales promotions, media activity etc…

Market perspectivesMarket perspectives

• RetailRetail

~ dominance of supermarkets~ dominance of supermarkets

~ high & growing market share~ high & growing market share

~ diverse positioning ~ diverse positioning (LUV – HUV £)(LUV – HUV £)

~ attuned to / driving green agenda~ attuned to / driving green agenda

~ niche / local specialists~ niche / local specialists

• FoodserviceFoodservice

Market perspectivesMarket perspectives

• FoodserviceFoodservice

~ fragmented structure (profit & cost)~ fragmented structure (profit & cost)

~ diverse positioning ~ diverse positioning (LUV – HUV £)(LUV – HUV £)

~ sensitivity to economic climate~ sensitivity to economic climate

~ provider of fish solutions~ provider of fish solutions

~ driving green agenda~ driving green agenda

• FoodserviceFoodservice

Conclusions on fish Conclusions on fish through the supply chainthrough the supply chain

• Global & local interdependence Global & local interdependence • Fish is a high profile foodFish is a high profile food• Many emergent & conflicting issuesMany emergent & conflicting issues• Increasingly complex seafood marketsIncreasingly complex seafood markets• Importance of trust, credibility & Importance of trust, credibility &

growth of certification dependencegrowth of certification dependence

Questions?Questions?