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Price hikes in traditional UK fish pave way for alternative species.

Price Hikes in Traditional UK Fish Pave Way for Alternative Species

Cod, plaice and haddock are preferred, but shortages have driven up raw material costs to a point that is pinching consumers. So some major processors are proud to offer reasonably-priced pollock. What's next?

An ebb tide is tugging at the British finfish market after waves of price increases have sent end users increasingly to the poultry section of the supermarket. Frozen fish sales during the past year were flat in volume terms at about 1.3 million tons, while value was up 6% to 368 million [pounds]. Indeed, some analysts suggest that tonnage would have dived if worries over outbreaks of mad cow disease had not depressed the consumer appetite for beef.

The problem remains that shortages of the three species that Britons like best -- cod, haddock and plaice -- have resulted in sticker shock at the retail shop. Raw material prices processors have to pay have gone up from 34% to 50%. Add to that the retailer's markup of an additional 35% and the long-held perception that fish is cheaper than meat gets deep-sixed in Davy Jones' locker.

With a slumping economy and high interest rates, small packing houses can no longer afford to buy summer stocks for processing in the winter. Hence a number of companies have already gone bust, and some victims are blaming EEC economic policy makers for their demise.

"We can thank Brussels for much of the problem," agreed Michael Beard, managing director of Morton Foods, a supplier of coatings to UK fish processors. "They've got it all wrong on net mesh sizes, while Iceland has the right idea. At a time when our cod quota was halved, small fish were being caught only to be thrown back in the sea dead. This has seriously undermined renewable resources. The bureaucrats have got to wake up to the fact that different net sizes are needed, and use of same strictly enforced. It's as simple as that."

With 1991 quotas not expected to rise, it is clear that UK fish eating habits must change if processors are to maintain business levels. This is good news for suppliers of alternative species. Already a good deal of hake is coming in from South America and New Zealand, and Russian trawler fleets are targeting it with vigor. Pacific pollock is being looked at with more interest, as will hoki if its price comes down.

But are British consumers prepared to buy added value packs labeled as whitefish? Trend-setting Marks & Spencer has begun to place products in its cabinets identified as such. And Birds Eye -- the leading brand whose 40% market share amounts to 40,000 tons a year worth 150 million [pounds] -- has done the same on a number of its Captain's Table offerings.

Great Britain, historians will point out, is a nation that has gone to battle over access to cod fisheries. Now its seafood industry must launch a different sort of campaign to win over consumers' hearts, minds and pocketbooks to alternative species. That's a steep challenge, but Birds Eye has already stepped up to it with guns a blazing. The Walton-on-Thames company that has spent millions of pounds over the years promoting its yellow boxes of cod as the preferred quality choice, is now investing substantial resources to build it prime range of Alaska pollock-based fish fingers. The species is also being sold in Fish Feasts packs and the recently unveiled Quarter Pounders offering.

"A big gap has opened up between high cod prices, which have risen three times this year, and the bottom end of the market," pointed out Thom Braun, general marketing manager. "So to bring life back to the price-sensitive segment, we are offering a middle range at, for example, about 80 to 90 pence for 10 fish fingers compared to 1.05 [pounds] for cod and 55 to 60p for minced fish."

Braun conceded that it will take a major effort to educate homemakers about the quality merits of relatively unknown pollock. "The goal is to get it generally accepted as value for the money," he said. "The only problem in this market could be its color."

The Captain's Quarter Pounders product (two for 99p or a four-pack for under 2 [pounds]) kickoff is aimed at teenage fast food eaters. Unlike adults and children, this segment is considered to be a low user of fish. To get the ball rolling a 25p-off next purchase coupon ("Claim a Quarter Back") is offered along with a chance for buyers to win a trip for four to Florida to see the American football championship Super Bowl game.

Fish Feast with Cheese rounds out the new product lineup. Two servings of whitefish come per 7 oz. box, which also offers a 25p coupon good for a subsequent purchase.

Looking ahead, Braun expects 1990 to close out flat in overall tonnage, but advance by about 20 million [pounds] in sterling. The coated fish sector, which hovers at around 100,000 tons, will likely remain flat for another year before picking up in 1992.

Private labels probably equal Birds Eye's 40% share of the added value fish category. Among them Sainsbury dominates the splintered market with 11%. The second biggest brand player is Ross, also with 11%. It too has faced the problem of raw material inflation by concentrating on developing quality products that are economically priced.

Chip Shop cod and haddock varieties and Ocean Classics ready meals from Ross are the primary frozen fish offerings. The latter claims to be the 50.9 million [pounds] category's leading brand with a 26% share second only to own label's 43.5%.

Ross trails Birds Eye and own label in the 73.2 million [pounds] battered fish and 13.7 million [pounds] fish cakes niches, with respective sterling shares of 24.5% and 28%. It runs a distant second in the 47.8 million [pounds] fish-in-sauce segment with 13.4%, and is third with 9.3% of the 42.9 million [pounds] breaded steaks market -- well behind 42.6% for Birds Eye and private label's 41.5%.

Opportunity-Minded Findus

Findus strategists see an opportunity to be seized amidst an environment of highly priced traditional fish products. It has geared up to menu relatively inexpensive portions of favorite fish species as components of its prepared foods and pancake lines. "Crispy fish pancakes provide perfect alternatives to other long-established, popular fish products," said Dickon Poole, marketing manager.

Four pancakes with fish fillings were introduced to the 36 million [pounds] category (of which Findus claims 97%) this summer: Cod and Cheese, Haddock and Mushroom, Cod and Creamy Tomato Sauce, and Cod and Barbecue Sauce. Each comes in packs of four and retails for 99p.

New to the Nestle company's range are four fish-in-sauce meal centers that weigh in at under 200 calories. Selling for 1.49 [pounds], each features prime fish fillets or chunks that are not from blocks. The recipes are: Cod with Mediterranean Vegetables, Cod Mornay with Julienne Vegetables, Plaice Dijonnaise, and Cod Fillet in Tarragon Sauce.

Up until this year, consumer demand for fish had grown steadily for five straight years, pointed out Richard Webb, Findus general manager. In 1989, the frozen fish market reached a value of 537 million [pounds] with fish-in-sauce products accounting for almost 48 million [pounds]. In volume terms fish-in-sauce grew by an impressive 15%, making it one of the most dynamic sectors in the market.

Research has shown that in a single month around 21% of all homemakers in the UK will purchase a frozen fish-in-sauce product. In a recent study conducted by Findus, 24% of lean Cuisine consumers specifically requested the addition of fish-in-sauce recipes to the 50 million [pounds] brand. Hence the Croydon-based company has responded to this market opportunity. The range will be strongly supported by an extensive, 1.5 million [pounds] advertising campaign on television, in the women's consumer press, and by in-pack promotions in existing Lean Cuisine products.

Bluecrest

Quick Frozen Foods International surveyed a number of other fish producers and marketers in the UK, including Bluecrest Foods Limited of Grimsby. During the August visit, the 150 million [pounds] Fitch Lovell company, Bluecrest's parent, was the object of a friendly takeover bid by Booker O'Connel.

"We're the largest specialist packer of fish in the UK," informed Carl Briggs, marketing manager of the catering division. It was started only in April of 1989 after management decided the foodservice field held more promise than the highly competitive retail sector, which is dominated by store labels and heavyweight brands. "With others losing their way, we felt that catering deserved our attention," said Briggs.

The company's offerings are wide in scope, ranging from cod and haddock breaded and battered fillets to filled fish such as whole and boneless plaice with prawns and mushrooms, and lemon sole with crab meat.

On the retail side, Bluecrest reckons that it packs 30% of the own label fish fillets in Britain. That is impressive considering that store brands claim 70% of the non-catering market, which in turn represents 60% of the universe.

Still, Bluecrest remains a brand player in its own right, stated Nichola Read, retail brand manager. As a matter of fact, its Lemon Sole Cordon Bleu won first prize for the "Best New Main Course Fish Product" in the 1990 Supermarketing Quality Food Awards competition. Launched last year, the 2.79 [pounds], 400g filled fish item contains smoked ham and cheddar cheese sauce.

Other new retail offerings produced to fit in with a national trend toward adventurous eating are Cod Francaise and Cod Tikka. The former features a spicy garlic coating of herb flavored crumb while the latter is accented with authentic Indian flavors.

The Bluecrest marketing managers told QFFI that while some additional new products can be expected soon, it will be some time before the packer seriously gets involved in exporting. "We just don't have the raw materials right now," said Briggs.

When asked to offer a prediction on which way the UK frozen fish market is headed in the near term, he replied: "This fall and winter prices will go even higher due to shortages. It's likely that records will be set in 1990."

Roger Forder of Faroe Seafoods Co., a Grimsby-based private label packer of fish fillets, confirmed the unwelcome assessment on pricing. "Prices have gone up 50%, but profits have not," he complained.

And if that isn't bad enough, currency exchange rates have also conspired against the exporter. "We were earning money in February and March, but now we're taking losses because the pound went up 7%", said Forder.

Present business conditions notwithstanding, Faroe Seafoods is expanding its factory by 12,000 square feet to give it 50,000 in all. Some 750 additional pallet spaces will be added to the cold store to accommodate finished products.

QFFI's last stop among fish houses in Grimsby was at Icelandic Freezing Plants Corp. Active in the catering field by providing a range of fillets, steaks and shellfish, its core business remains in retail private label production.

While many UK processors have complained about resource shortages, this is apparently not one of them. "We have plenty of fish and continue to get it regularly," advised Mike Allenby, marketing manager.

While these supplies should keep own label output humming, they will also guarantee that the processor's Marico Menu gourmet line of retail cod recipe dishes will not be interrupted. Indeed, Icelandic has begun offering the brand to the French market this year for the first time. Its 240g, 2 Royal Cabillaud aux Crevettes pack has already gone over very well.

Entree Breaded Whitefish Served Up as New Starter

The failure of the spring whitebait fishing season has prompted Dawnfresh Seafoods in the United Kingdom to offer caterers entree breaded whitefish as an alternative. Having the appearance of whitebait, while being less oily, the product is packed in units of 18 x 454g.

"With mussels also in short supply, we have found a ready demand for this item," said John Catherall, marketing and sales director.

PHOTO : The strategy behind offering this non-cod Prime Fish Fingers product is to keep price-sensitive but value-oriented consumers from abandoning the category.

PHOTO : Made of pollock topped with a crunchy coating. Captain's Quarter Pounders from Birds Eye are aimed at the elusive teenager market.

PHOTO : The four varieties in the new Crispy Fish Pancake line from Findus: Cod and Cheese, Haddock and Mushroom, Cod and Creamy Tomato Sauce, and Cod and Barbecue Sauce.

PHOTO : Spicy-flavored crumbs top off the two new breaded fish products from Bluecrest: Cod Francaise and Cod Tikka.

PHOTO : Produced by Icelandic Freezing Plants Corp. in Grimsby, the Marico Menu Gourmet brand is reportedly being warmly received in France. This cod and prawns recipe is said to be particularly popular.
COPYRIGHT 1990 E.W. Williams Publications, Inc.
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Title Annotation:Great Britain
Author:Saulnier, John M.
Publication:Quick Frozen Foods International
Date:Oct 1, 1990
Words:2131
Previous Article:Growing upturn in occupancy rates buoys British cold store operators.
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